The International Monetary Fund (IMF) has called on the Mexican government to sell assets of state oil company Pemex, reduce the company’s investments in loss-making activities and improve corporate governance.
While welcoming President Claudia Sheinbaum’s strategy to strengthen Pemex’s financial health, the IMF said her plans need to be supported by strong commercial objectives, including selling non-core assets and scaling back investments in unprofitable areas.
Pemex has US$100 billion (bn) in financial debt and owes US$28bn to its suppliers.
Sheinbaum’s administration has provided more than US$50bn of financial support to the company so far this year. Her government has also established new mechanisms for Pemex to partner with private investors.
In a staff report publishedon Tuesday, the IMF said strengthening the financial health and profitability of Pemex was essential to lowering Mexico’s debt-to-GDP ratio.
“Transparent and judicious implementation of these plans will be key for public finances as financial operations to support Pemex are creating contingent liabilities for the sovereign,” the fund said.
The IMF also said strengthening transparency and accountability and improving corporate governance at Pemex were crucial to building investor and public trust.
Loss
On Monday, Pemex reporteda net loss of US$3.3bn for the third quarter.
In recent years, the company has invested heavily in loss-making refining as part of a government strategy to reduce Mexico’s reliance on gasoline, diesel and jet fuel imports from the US.
Meanwhile, Pemex’s crude oil production has fallen to about 1.6 million barrels per day (Mb/d), less than half the record high of 3.4Mb/d reached in 2004.
(The original version of this content was written in English