• HISTORIC: Mexico’s state-owned oil company, Pemex, announced Thursday a startling loss of US $23.3 billion for the first quarter, an amount larger than total losses for the entire 2019 (US $14.3 billion) and a blow to President Andrés Manuel López Obrador’s oil-centered governing plan.
• STORM: With huge levels of indebtedness and high operating costs, the bad news for Pemex comes only days after Moody’s credit rating agency reduced the company’s debt to junk status. Moody’s is the second agency to downgrade Pemex debt after Fitch who first did it in 2019.
• FOREX: “It’s important to highlight the issue of the peso depreciation. The Mexican peso depreciated against the US dollar by 27.4 percent from December 2019 to March 2020”, said Alberto Velásquez, Pemex’ CFO during an investors call today to present Q1 2020 results.
• TRIM: Earlier this week, Pemex had already announced that they would be cutting the equivalent of US $1.6 billion from its exploration and production budget, in an effort to counter the drastic decline in oil prices. Today, executives said that exploration and production budget was originally US $ 2 billion.
