MEXICO CITY (Reuters) – Mexico’s government will inject between $1.3 billion and $1.6 billion into state oil company Petroleos Mexicanos (Pemex) this year and offer a tax break of 75 billion Mexican pesos ($3.68 billion), a senior official told Reuters on Thursday.
The world’s most indebted oil company, Pemex had more than $110 billion in financial debt at the end of the third quarter last year, while its liabilities far exceeded its assets.
In the past two years, the government of President Andres Manuel Lopez Obrador has injected billions of dollars in capital in the loss-making company and reduced its tax burden.
The source, who has direct knowledge of the matter but declined to be identified, said the tax reduction will be applied on a monthly basis and be separate from the already reduced profit sharing rate (DUC) from 58% to 54% for this year.
Neither Pemex nor the finance ministry immediately responded to a request for comment. Earlier on Thursday, Lopez Obrador said a new agreement will come into force to further reduce the tax burden on Pemex, but he gave no details.
Last year, the government reduced the DUC, the largest payment Pemex makes to state coffers, from 65% to 58%.
The source also said the first of several capital injections, scheduled within the next two weeks, will be used to pay down debt, and that it is unlikely Pemex will issue bonds on the international market this year.
Pemex has carried out liability management of different types, including bond refinancing and bank line extensions, totaling more than $30 billion between 2019 and 2020.
Luis Gonzali, co-director of investments at Franklin Templeton Investments in Mexico, said the $5 billion will “enter and leave, without any major impact” on the company’s long-term prospects.
“Lowering taxes and capitalizing in small amounts does not solve the underlying problem: lack of infrastructure, capital supporting unprofitable projects, lack of exploration,” he said. “But it will help it survive more comfortably throughout the year.”
(Reporting by Ana Isabel Martinez in Mexico City; Writing and additional reporting by Stefanie Eschenbacher; Editing by Frank Jack Daniel, Matthew Lewis and Lincoln Feast for Reuters).
more recommended stories
Mexico’s Covid Tzar Hugo Lopez-Gatell calls mask-wearers “egotistical”
MEXICO CITY (AP) — The Mexican.
Mexico’s corn imports are on track to break annual record
Mexico’s imports of corn, mostly from.
SEDENA awards contract to presidential aide’s firm
Mexico’s Ministry of Defense awarded last.
In the middle of the night, a man drowned at the Chelem Ría in Progreso, Yucatan
Progreso, Yucatán, (October 16, 2021).- Due.
“Asociación de Cantineros” emerges strong in Merida
As a response to what they.
8-year-old girl suffers burns in Uayma, Yucatán and is urgently taken to a Texas hospital
Michou and Mau Foundation helps with.
Spectacular Blood Moon will be visible in Yucatan on October 20th
MÉRIDA, Yucatán, (October 16, 2021).- The.
Inclusive Entrepreneurship Fair will be held in December at Mérida´s ADO CAME former bus station
MÉRIDA, Yucatán, (October 16, 2021).- Work for.
Shooting at the Mexico City International Airport, 1 dead and 2 injured
Eduardo Beaven was preparing to make.
La Palma volcano unleashes ‘lava tsunami’
6,800 people evacuated as eruption becomes.