High oil prices trigger record US$6bn Q1 profit for Pemex

Mexico's national oil company Pemex credited the rise in global oil prices for its highest net income since at least 2004 at 122bn pesos (US$5.98bn) in 1Q22, compared to a 37.4bn-peso loss in the first quarter 2021.

“The most important variables that explain this situation are the recovery of prices worldwide and, to a lesser extent, the volumes sold,” the NOC said in its results report.

Spurred by the war in Ukraine, the Mexican mix jumped to an average of US$88.91/b in 1Q22, compared to US$56.49/b in the same quarter 2021.

Pemex reported revenue up 59.6% year-on-year in Q1 at 507bn pesos, with crude exports rising 68.5% and domestic sales of refined fuels increasing 51.3%. 

PRIORITY FIELDS 

Speaking at the company’s quarterly results call Monday, CEO Octavio Romero Oropeza reported a 2.3% year-on-year rise in crude output to 1.76Mb/d.

Romero said the strengthened investment strategy at E&P unit PEP had allowed “sustained increases in production since the second half of 2020.”

PEP’s priority development of 30 mostly shallow water and some onshore fields “contributed in a major way to these results,” Romero said, adding these fields increased output by 54,000b/d in Q1 with production reaching 355,000b/d by March 31. 

The CEO singled out solid Q1 production at two onshore developments: 132,330b/d at Quesqui with 11 wells in Tabasco state; and 33,100b/d at Ixachi’s 11 wells in Veracruz state. 

REFINING

Pemex’s refining unit PTI reported processing 822,000b/d in Q1, about 10% higher than 747,000b/d in the same quarter last year, helped by ongoing refurbishing and rehabilitation projects at PTI’s six domestic refineries. 

PTI head Reinaldo Wences told the call that for the remainder of 2022 the rehab program would “continue to focus on restoring the mechanical integrity of the processing plants, primary services and storage.” 

Wences also reported gasoline production at 273,000b/d, up from 239,000 in 1Q21 and diesel output at 150,000b/d in the first quarter, increasing from 125,000b/d a year earlier.

DEBT UPDATE 

The company confirmed its debt at US$107bn as of March 31, adding it is set to pay US$5.1bn in 2022. 

Acting CFO Antonio López Velarde confirmed the company may be able to cover its own amortizations “with respect to debt maturing in 2022 and 2023” thanks to the “much improved cash flow outlook in the current year.” 

López said the requirement for federal government support is “completely dynamic” with the sovereign potentially stepping in to help at any time. However, for now “the plan is that much of these maturities can be paid with our own resources.”