How Pemex plans to tackle supplier obligations
On Friday, executives said a revival of an investment-style vehicle to clear supplier balances is being hashed out in partnership with the country's state development lender, mirroring last year's Banobras arrangement. Accounting Director Rene Orozco put the approach in two steps: "The strategy we have is to first pay suppliers with our own resources," he said. "We're working on a scheme similar to the one we used last year to grant liquidity to suppliers."
By quarter three's close, the filing shows about 23 billion dollars in outstanding supplier invoices. Even so, Pemex has disbursed about 19.6 billion dollars to suppliers so far this year. In 2023, Banobras arranged around 13 billion dollars in financing to accelerate supplier payments as part of a broader government rescue effort.
The quarter by the numbers
For the three months through September 30, Pemex posted a net loss of 10.8 billion pesos, or 573 million dollars, versus a 3 billion dollar loss in the same period a year earlier. Management cited heavier tax and duty outlays, higher costs tied to derivatives, and foreign exchange losses as factors behind the shortfall.
The breakdown includes a 16.4 billion dollar loss from the peso's slide against the dollar and nearly 9 billion dollars in expenses linked to derivatives, including currency swaps and oil options. Financial borrowings totaled 77.6 billion dollars at quarter end. A company presentation shows that headline debt is the lowest in at least 12 years, though that figure excludes revolving credit and other liabilities.
Operations and the market backdrop
Production remains stuck despite years of state aid. Crude and condensate averaged 1.64 million barrels a day, down 0.4% year over year, while natural gas output climbed nearly 8%. Crude runs rose almost 14% as the company sent more barrels to domestic refineries. Management describes Pemex as the most indebted oil producer globally, with output roughly halved over two decades as aging fields lag investment and refineries that struggle to turn a profit keep the company reliant on state support.
Domestic fuel sales were more than 13% higher than a year earlier, reaching the strongest level since 2018, the company said. Exports in September were 389,000 barrels a day, up more than 40% from August.
When companies reshuffle financing, informed investors can benefit from smarter decision tools. We're hosting our first ever investor livestream on 11/17 to show you how to use ChatGPT and Claude to invest like a pro, hosted by Briefs Finance CEO Jaspreet Singh. Save your seat.
Global peers with big refining footprints are riding strong quarters. Average crude prices hovered near 90 dollars a barrel during Q3, roughly one third higher than a year earlier, and refinery margins widened as conflicts in the Middle East and Russia's war in Ukraine disrupted capacity. By contrast, the state-run company has not operated like typical majors in this cycle, cutting exports and directing more crude to local plants as part of President Claudia Sheinbaum's energy policy.
The bottom line for investors
Sheinbaum has funneled about 50 billion dollars into Pemex during her two years in office to push for self-sufficiency next year. That push is constrained because backing Pemex has become a drag on Mexico's sovereign credit rating. Looking ahead, 4.8 billion dollars is earmarked for the company in 2027, roughly 70% below this year's level, and near term the company faces a lighter schedule of debt payments.
For portfolios exposed to Mexico's credit and energy complex, the through-line is clear: cash is being steered to suppliers and to keep refineries running, while leverage remains high and dependent on public backing. The revived supplier-financing plan and Q3 scorecard frame the near-term liquidity playbook and the administration's stated goal of achieving self-sufficiency next year.
Knowing how to use new tools can help investors find clearer opportunities. On 11/17, our CEO Jaspreet Singh goes live for our first ever investor livestream on how to use ChatGPT and Claude to invest like a pro. Register to join him.
