Mexico City — Mexico’s state-owned oil company Pemex again recorded eye-watering losses as increased tax payments ate into profits during third quarter, according to the company’s financial results for the period.
Pemex’s income tax payments rose 37% to 103.95 billion pesos ($5.24 billion) in third quarter.
The oil giant reported a loss of 52 billion pesos ($2.62 billion) from July to September due in large part to income tax payments, according to a document sent to the Mexican Stock Exchange (BMV). However, the figure represents a decrease of 25.2 billion pesos ($1.27 billion) in losses, compared to third-quarter 2021 results.
During the quarter, the company’s revenues were 195.61 billion ($9.88 billion) compared with a third-quarter 2021 loss of 100.23 billion pesos ($5.06 billion) due to the rise in global oil prices that oscillated around the $100-per-barrel mark during the third quarter of this year.
Pemex’s revenues increased from the previous quarter by 56%, but were diluted by the cost of sales, which soared 82%.
The cost increase is due to rising prices for “gasoline, diesel, jet fuel and natural gas, as well as the increase in sales volume of regular gasoline, premium gasoline, diesel and jet fuel,” Pemex said in a filing to the Mexican stock exchange.
Windfall for US oil majors
Pemex’s results were released on the same day that US oil giants Exxon Mobil Corp. and Chevron Corp. reported that they amassed more than $30 billion in combined net income last quarter amid high prices for crude and natural gas.
Other energy majors including Shell Plc and TotalEnergies SE reported record or near-record earnings this week, spurring additional cash returns to shareholders via enhanced dividends and stock buybacks.
But unlike those companies, Pemex’s role as government-controlled national champion limits its ability to fully capitalize on the global squeeze on energy supplies. Although Mexican President Andrés Manuel López Obrador has promised to rescue the company by restoring much of its former monopoly in the oil sector, he’s also diverting its resources into ramping up an unprofitable refining business with a goal of making Mexico self-sufficient in fuel.
At the same time, Pemex is importing more gasoline and diesel. Older technology and a lack of maintenance means the company’s existing refineries are mostly producing fuel oil. Pemex reported a negative refining margin -- meaning it lost money on making fuel -- in the third quarter on lower crude prices and competition from refineries worldwide boosting their processing rates.
Output from giant onshore fields Ixachi and Quesqui has helped boost sales of natural gas and condensate, which is similar to very light crude. Even so, Pemex’s flagship oil for export continues to decline.
Pemex’s construction of the Olmeca, or Dos Bocas, refinery in Tabasco state and its purchase of the Deer Park refinery in Texas have resulted in cost overruns. With the highest debt of any oil company, Pemex has struggled to pay the billions of dollars it owes to its offshore oil suppliers and contractors.
Pemex is seeking about $1 billion in financing from HSBC and Goldman Sachs Group Inc. in a deal that will tie funds to reducing greenhouse gas emissions, Bloomberg reported last month. The company has said in a presentation that it is looking for new financing schemes to monetize receivables for gasoline and diesel.
With information from Bloomberg.com
