Pemex 'needs to wait' on IPO, says CFO
Pemex CFO and treasurer say the firm has enough to concentrate on as Mexico’s energy sector opens to the private sector, before the state oil firm can think about going public
An IPO of Mexico's national oil company offers benefits but is
unlikely for perhaps a decade, Pemex's chief financial officer
Mario Beauregard has told LatinFinance, as the firm
evaluates the sweeping range of new opportunities and capital
raising options open to it as Mexico's energy reforms take
||Hot sector: a Pemex oil refinery in
Texas. Photo: Roy Luck
Under Round Zero of Mexico's energy reforms, Pemex has asked
to maintain rights to over 90% of fields in production, as well
as most of the less developed fields. Partly as a result, its
funding needs are growing. Capital expenditure is set to
increase to $29bn in 2015, from $27bn this year.
At the same time, three of the firm's six oil refineries
need rehabilitating. "If we are successful in revamping those
refineries, we will be able to increase profits, but in the
initial stage, you need to fund those investments to get those
profits," said Beauregard.
"We need to invest a lot of money, and here you are talking
billions of dollars," he said.
With the reform, said treasurer Rodolfo Campos, the private
sector will provide more investment, particularly in deep-water
fields, which will "reduce the pressure" on Pemex, including
its tax obligations. But that will take time-legislators are
still debating the final details.
"In the future there will be a lot of pressure to invest
more and more," said Campos.
Beauregard said a listing of Pemex or specific projects
could help the firm fund that investment. But he said it would
be unlikely in the short term, and perhaps for as much as 10
"This is a sensitive issue here in Mexico, especially when
we are approving the energy reform, ending 76 years of a
monopoly. We need to wait," he told LatinFinance in a
recent interview in Mexico City.
Campos said the firm has sufficient opportunities and "so
many things to solve" before it embarks on an IPO, including
putting Pemex's balance sheet on a more sustainable footing.
"You have to clean up the house first, take advantage of all
the opportunities", before thinking of the possibility of an
IPO - "maybe in a couple of decades or more", said Campos.
Sales of petrochemicals, distribution, storage or pipeline
assets -no longer strategic to the firm - are more likely
measures to bolster capital, said Beauregard. Such divestments
were not allowed under previous legislation.
Working with private companies, through licensing or profit
or production sharing schemes, would also alleviate funding
pressures, he said.