Mexico’s Pemex Resumes Payments to Suppliers, Prioritizing Big Service Providers
Mexican National Oil Company Pemex Pays Off Overdue Debts to Large Oilfield Service Companies
Last year, Mexican national oil company Pemex partially resumed paying down what it owes to suppliers, prioritizing large oilfield service companies over upstart private producers. Pemex has not publicly disclosed the balance of its debts to suppliers since last October, when it said it owed some $5.6 billion, not including other related liabilities, including litigation costs and taxes. At the end of last year’s third quarter, Pemex said it owed suppliers $17.4 billion. The delayed payments to Pemex’s key partners are a longstanding problem that could disrupt operations if not resolved.
Pemex’s Efforts to Settle Debts to Key Partners
Despite the challenges, Pemex has made efforts to prioritize payments to its key partners. The payments to providers restarted after some of Pemex’s major service contractors last December publicly criticized the state-run company for its failure to pay up, arguing it put them in a critical situation. A letter from private oil companies was sent to Mexico’s finance minister outlining similar gripes. While it was not made public, a copy was seen by Reuters.
Private Producers Face Payment Delays
Private oil companies that deliver all their crude and gas production to Pemex are experiencing an average six-month delay on payments. This delay has raised concerns about the fairness of Pemex’s payment strategy, with some sources describing it as discriminatory against the private producers.
Response from Major Service Providers
Major service providers such as SLB, Weatherford, Halliburton, and Baker Hughes have been impacted by Pemex’s delayed payments. However, some of these companies have reported receiving significant payments from Pemex, while others have declined to comment on the issue. Pemex is expected to provide an update on the delinquent payments when it reports its fourth-quarter results next week.
Pemex’s Future Plans
Last year through September, Pemex reported that it had paid contractors close to $17.6 billion. A Pemex source said the company intends to “improve” payments over the next quarter, using part of a recent tax cut to partially settle the debts.
