translated from Spanish: Moody’s rules out changes in qualification of Pemex

Moody’s said it will give “the benefit of the doubt” to the current federal Government on actions carried out at Petroleos Mexicanos (Pemex), by which, at least in the first half of the year will not make changes to the credit rating of the productive enterprise of the State.
The Senior Vice President of Moody’s Investor Service, Nymia Almeida, said that during this time the oil company must demonstrate its profitability, which will invest twice in exploration and production, among other actions, that will encourage better results.
“We want to give you the benefit because this Government comes with a very strong reduction of expenses, costs, mandate and that is just what you need the company. If it has not reached you the money to invest, to stabilize production, is because he has spent more than it should on projects that cost cheaper elsewhere in the world,”said.
In an interview at the end of their participation in the Expo & Congress Energy Mexico 2019, he recalled that Pemex by Moody’s current rating is BAA3 with stable perspective, and not deliver positive results “it will be more difficult, but we will not do any action until you see the first half”.
He argued that they will analyze the actions of Pemex in connection with investments, the delivery of operating results that “give hope”, costs and expenses, new contracts and services with third parties, among others.
“A number of things that could occur if you work very hard and those signals in the first half might give hope to deliver a stabilization or decrease of production, reserves.” Our point of view now is that the rating is correct,”he said.
He insisted on austerity in expenditure through compliance with the objective of the present Government, since “it is not impossible and will need”.
At the same Expo, the managing partner of quasar Capital, Carlos Sales, mentioned that after lowering the rating of Pemex by Fitch Ratings, that is reflection of a delicate situation, requires “major surgery”, a comprehensive intervention business plan , corporate governance, financing, loss, relationship with the Union, among others.
“If you see numbers from Pemex, deficiencies, the debt per employee, by reservation, I don’t think that this fix with a little more investment or with lower taxes. I think it’s better to have a comprehensive plan,”argued.
On the construction of the refinery in Dos Bocas, Tabasco, the specialist felt it would be a very expensive work, and that if you take out “don’t see how they can financially be profitable”.
Nymia Almeida recalled that in Latin America several similar projects, have been made as in the case of Colombia, where the expansion of the refinery in Cartagena cost double the estimate of three thousand to nearly six billion dollars.
While in Brazil, a similar project came out five times more expensive and took 10 years to build with a capacity of 110 million barrels, half of the estimated; and in Ecuador, with a project considered for 300 thousand barrels, similar to the Dos Bocas and with an investment of 11 billion dollars, you have not got the financing, among other problems.
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Original source in Spanish