• FOCUS A continuing fall in the price of oil could potentially put more pressure on Mexico’s state oil company Pemex particularly when combined with higher production costs which -according to the firm’s own numbers- increased 26% between 2017 and 2018.
• EXPERT “The lower the production of Pemex there will be greater cost increases per barrel and given that much of its portfolio is mature this is a trend that we’ll continue to see,” says Pablo Medina, vice president for research at Welligence Energy Analytics.
• CONTEXT The world’s most indebted oil company, Pemex presented in July a long awaited business plan that fail to convince rating agencies insisting that the Mexican Government should significantly increase its financial support; Pemex business plan expects oil prices at USD 55 a barrel.
• HEARD ON THE STREET Per press reports quoting unnamed sources, the Mexican Government is in the process of deciding whether to go with and beginning to implement an annual hedge to protect its oil production against falling oil prices; in 2019, Mexico locked prices at USD 55 a barrel.
