The Energy Reform is the second largest change to the energy sector in the last 100 years. And according to José Antonio González Anaya, General Manager of the state company Petróleos Mexicanos (Pemex), Pemex has played a fundamental role in this change.
He added that Pemex is facing a major contextual challenge linked to financial aspects, which has different causes. One of these causes is oil prices: they dropped from 100 to 20 dollars and are now at 40 dollars per barrel.
PEMEX is now solvent and shows extraordinary potential
These financial circumstances are both a big challenge and a big opportunity, i.e. an in-depth and wide-ranging Energy Reform. Anaya stated that the changes which have been made would have been unthinkable five years ago, and that there are currently investment opportunities.
He stressed that "I am sure that although Pemex was facing hard financial problems and major short-term liquidity problems," it is now solvent and shows extraordinary potential.
The cut of 132 billion pesos resulted in a 100 billion budget cut for Pemex. At this point, Pemex's investment program was reconsidered and investment was postponed. Pemex is no longer exploiting deep waters; instead it is approaching investors, reducing risks and opening new paths for increasing oil production.
Energy reform and PEMEX at BBVA Bancomer.
The Energy Reform makes this possible. Pemex was also the recipient of support from the federal government: a cash injection, a bond and a cash injection totaling 73 billion pesos. These resources are being used to pay suppliers: 90 billion pesos have already been paid and another 30 billion are scheduled to be paid.
Pemex's General Manager also mentioned that an adjustment to the tax burden will allow Pemex to reduce its debt by 50 billion pesos and commit to maintaining a solid and solvent financial profile. And, in this way, harness the opportunities offered by the Energy Reform in relation to private associations.
He concluded by saying that the Energy Reform will change competitiveness in Mexico and the country's future economy.
In turn, César Emiliano Hernández, Deputy Minister of Electricity, said that the reform is wide-ranging and it does not apply solely to the state energy companies Pemex and Comisión Federal de Electricidad (CFE). The latter are now more flexible since they benefit from simpler tendering conditions and an easier path to more advanced corporate governance.
These reforms have been implemented with a sense of urgency and in a very short time instead of within three or four years as it happened in other countries.
Raúl Mijares, Energy Business Director at Grupo Alfa, pointed out that it is necessary to plan to be able to compete in a context of oversupply. The best model consists in redefining licensing rounds, increasing the size of oilfields and encouraging the exploration of new resources.