Mexico’s Pemex swings to Q2 loss on higher costrs, lower prices

27 July 2012 20:11  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Higher expenditures, lower crude values and other factors helped to drive Petroleos Mexicanos (Pemex) into a second-quarter loss of pesos (Ps) 25.9bn ($1.9bn, €1.6bn) from a Ps16bn profit in the same quarter of 2011, the Mexican energy company said on Friday.

Second-quarter profits were hurt by an increase in capital expenditures, a weaker peso and lower prices for Mexican crude, the state-run oil company said.

Second–quarter revenue increased 3.2% to Ps406bn from Ps393bn a year earlier, mainly resulting from higher prices for domestic products, Pemex said.

Petrochemical production in the second quarter decreased by 20.1% year on year to about 1.2bn tonnes, the company said.

Pemex said that the cut in petrochemical output was caused by a temporary shutdown of the aromatics chain as a result of the incorporation of a new continuous catalytic regeneration (CCR) platforming plant in the Cangrejera Petrochemical Complex.

Stabilisation of the Cangrejera complex is expected to take place in the third quarter, the company added.

Industry reform that would tackle rising costs and flagging output was a key issue in the run-up to the Mexican elections that were held on 1 July.

Pemex declined on Friday to speculate on the possibility of opening up the company to more private investment.

Mexico’s president-elect Enrique Pena Nieto has floated the idea of changing the constitution to facilitate more private investment in Pemex.

However, Pena Nieto’s Institutional Revolutionary Party (PRI) fell short of a majority in both houses of Congress making reform more difficult.

“It’s too early to have these discussions,” said Pemex CFO Ignacio Quesada Morales. “We’re still going through the formal and legal aspects of the election,” he said.

Pena Nieto is scheduled to take office on 1 December.

($1 = Ps13.4) ($1 = €0.81)

By: Simon West

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