& Tobago

Very usefull links


News links




Dow Jones

Oil price



Views and News




Pemex gets a $7.4 billion boost, but half is for AMLO's controversial refinery

Susana Gonzalez/Bloomberg

- State-owned company posts its five-year business plan online
- No drilling funds after 2020, but tax breaks for added output

By Amy Stillman / Bloomberg

Petroleumworld 07 18 2019

Mexico President Andres Manuel Lopez Obrador is planning a $7.4 billion cash injection for Petroleos Mexicanos over the next three years. But there's a catch: More than half will go to his pet refinery project.

Pemex will get a $3.5 billion capital boost in 2020, with an undefined amount for exploration and production. But in the two years after that, its E&P unit won't get a single peso from the government. By then, the company should have a “financial balance surplus” to be used for investment, according to a five-year business plan published online .

While Pemex won't get added funds to drill in 2021 and 2022, it will get as much as $3.9 billion for the Dos Bocas refinery, to be built in Lopez Obrador's home state of Tabasco. Investors have complained the project could keep Pemex from reversing output declines and reducing its $106.5 billion debt load, the largest among oil companies.
“Of special relevance will be the capitalization destined to finance the new Dos Bocas refinery, which will not put pressure on the investment requirements of the company since this work is included among the strategic projects of the federal government,” Pemex stated in its business plan.

The plan also includes about $6.7 billion in tax breaks for 2020 and 2021, depending on the company's production. While Pemex aims to boost production in shallow-water and onshore fields, the government has canceled bid rounds that would have enabled the state-owned driller to share the cost of developing resource-rich deep-water areas with private partners.

Pemex's answer to the previous administration's joint-venture agreements with private companies in oil fields are drilling service agreement, known as CSIEEs. They are expected to contribute $5.7 billion over four years, which is not nearly enough to move the needle, analysts have said.

More government support is needed for Pemex to meet its 2024 oil production goal of 2.7 million barrels a day, up from 1.66 million daily barrels in May, with no increase in net debt, Moody's Investors Service said in a report on Wednesday.

“This amounts to far more support from the government than the specific commitments outlined to date,” according to the report.

— With assistance by Eric Martin


Copyright© 1999-2019 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions as the source.

Other stories you have to get authorization by its authors. Internet web links to are appreciated.

Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article.

Write to

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to:

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Twitter: @petroleumworld1



Editor & Publisher: Elio Ohep/
Contact Email:

CopyRight © 1999-2019, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2019, Petroleumworld ™  / Elio Ohep - All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.