Friday, June 14, 2024

Government ‘cleans up’ Pemex International; mass exodus of senior officials

The replacement of the general manager and 10 executives at the Pemex division that sets and monitors petroleum prices is intended to end questionable practices that date back decades, President López Obrador said on Thursday.

“A complete renewal was carried out at Pemex International [PMI]. There was an instruction to clean Pemex International,” López Obrador said.

“Some people had been there for almost 30 years. It was converted into a limited partnership. Imagine, a company that . . . buys and sells petroleum . . . a million barrels a day, they fix the prices through formulas and decide who to sell to . . . and they were completely removed from the government.”

The president said the executives used their own technical expertise as an excuse for making decisions without any input or supervision from the government.

Pemex “is a very important company that we want to keep very close to the government,” López Obrador said. “It shouldn’t be so separate, so unattached . . .”

The state oil company announced last Friday that Ulises Hernández, a former official at Pemex Exploration and Production, would replace Raúl Enrique Galicia as the head of PMI.

Among the other new appointments announced was Armando Mejía Sánchez as head of crude trading.

His predecessor, Víctor Briones, as well as the vice presidents of crude trading and crude analysis, Carlos Islas and Alfonso Mendoza, took the decision to leave PMI, people with knowledge of the matter told the news agency Bloomberg.

The departures came after a disagreement between the former PMI executives and the new leadership team of Pemex led by CEO Octavio Romero.

Sources told Bloomberg that the clash was over an external review ordered by Romero to look at new formulas that were created to set prices for Mexican oil sold to refineries in the United States and other countries.

It came as a result of questions the Pemex chief had about how Mexico’s crude was being marketed by the management team at PMI, according to two people who spoke with Bloomberg. The review, which was opposed by Galicia, has caused delays in presenting oil prices to customers.

Pemex, the world’s most indebted oil company, has seen a decline in its output every year for the past decade and a half.

The government announced a US $5.5-billion rescue plan for the public utility in February but financial institutions described it as insufficient and disappointing and the ratings agency Fitch downgraded Pemex to junk status in June.

López Obrador remains adamant that his administration can revive the fortunes of the beleaguered company and has increased its funding for 2020 by 9%.

The government intends to upgrade the country’s six oil refineries and build a new one on the Tabasco coast.

Source: Notimex (sp), Bloomberg (sp) 

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