Pemex gets a tax break of $3.6 billion
Fiscal stimulus of 14% will be applied to tax on hydrocarbons
Pemex's debt of $110 billion is the highest of any oil company
By Amy Stillmanand Eric Martin/Bloomberg
Petroleumworld 02 23 2021
Mexico President Andres Manuel Lopez Obrador announced new tax benefits for Pemex as the beleaguered state oil company seeks to reverse long-term production declines and reduce debt.
Petroleos Mexicanos will get an additional 14% credit stimulus to apply to the taxes it pays on hydrocarbons capped at 73.3 billion pesos ($3.6 billion) for this year, according to a presidential decree . The new benefit comes in addition to previous measures that reduced Pemex's profit-sharing duty from 65%, to 58% in 2020 and 54% in 2021, respectively.
Pemex says that it has one of the industry's highest tax burdens, paying about $27 billion in net taxes last year, according to a January presentation . It's debt of $110.3 billion is the highest of any major oil company, and its crude oil output has declined every year since reaching a peak in 2004.
Finance Minister Arturo Herrera said the government will be working on Pemex debt in the coming weeks, in an interview with Bloomberg News on Wednesday. The government will make a capital injection of as much as $1.6 billion into Pemex this year, said a person with knowledge who wasn't authorized to talk publicly about the deliberations.
The oil giant's board is expected to approve the capital injection Monday, the person said, while no market transaction is currently planned for Pemex.
— With assistance by Patrick Gillespie, and Max De Haldevang