Pemex posts massive Q3 losses amid ongoing peso depreciation

Pemex reported a net loss of 161.33 billion pesos (US $8.04 billion) in the third quarter of 2024, mainly due to a decline in the value of the Mexican peso against the U.S. dollar.

In better news, the state oil company’s refining output increased compared to the July-September period of 2023 and its debt declined to an eight-year low.

The state oil company reported its third-quarter results in a filing with the Mexican Stock Exchange and in a statement posted to its website.

Here is the key information:

Losses

• Pemex said that it recorded an exchange loss of 130 billion pesos (US $6.47 billion) due to its “passive position in foreign currency.” The company said that the loss was caused by a 6.8% depreciation of the peso against the dollar.
• Pemex also reported a “deterioration of assets” to the tune of more than 30 billion pesos.
• The 161-billion-peso loss is more than double the 79.13-billion-peso loss Pemex reported in the third quarter of 2024. However, the peso weakened more than 13% against the dollar in the past year, according to data from the London Stock Exchange.
• Pemex said that neither the foreign exchange loss nor the deterioration of assets represented “cash outflows.”
• During former president Andrés Manuel López Obrador’s six-year term (2018-24), Pemex’s losses totaled 1.3 trillion pesos (US $64.6 billion).

Revenue 

• Pemex’s revenue declined 7.7% annually in Q3 to 426.12 billion pesos (US $21.24 billion). The main cause of the decline was lower crude export sales. Mexico is exporting less crude in order to supply more to local refineries as it seeks to reach self-sufficiency for fuel.

Production

• Pemex said it produced an average of 1.76 million barrels per day (bpd) of crude oil and condensate in the third quarter of 2024. It said that 31% of that quantity came from “new developments.”
• That figure represents a decline of 5.7% compared to a year earlier.

Refining 

• Pemex said the six refineries of Mexico’s National Refining System refined an average of 962,000 bpd of crude during Q3. Including the state oil company’s refinery in Texas, refining output was just under 1.26 million bpd between July and September, Pemex said.
• Pemex said the total refining output was 18% higher than in Q3 of 2023.
• Pemex began refining at its new refinery on the Tabasco coast in Q3, but output remains low.

Debt 

• Pemex said that its debt on Sept. 30, 2024, was US $97.3 billion. The company said that was its lowest level of debt since 2016. It attributed the decline in debt to “federal government support.”
• Compared to the end of 2023, Pemex’s debt declined by almost US $9 billion, according to the company’s stock exchange filing.

Government assistance 

• Pemex said it received 145 billion pesos (US $7.2 billion) in government assistance in the three months between July and September.

A new direction for Pemex? 

An internal Pemex document seen by the Reuters news agency last week indicated that the state oil company will develop new business models to attract investment during Sheinbaum’s 2024-30 administration.

The document also shows that Pemex will ramp up deepwater oil exploration, and that the company is aiming to increase its hydrocarbon reserves and ensure their restitution during the coming years.

With reports from Reforma and Reuters