Mexico’s state-run oil company Pemex reported a steep third-quarter loss on Wednesday of 167.5 billion pesos ($9.9 billion), well over double the 60 billion pesos loss in the same period last year, hurt by low oil prices and a weaker Mexican peso. It was Pemex’s 12th consecutive quarter in the red. Accumulated losses during the first nine months totaled 352.6 billion pesos ($20.8 billion), more than double the loss for the same period the previous year. Pemex said crude output for the quarter was down 5.5 percent, and natural gas production dropped nearly 1.7 percent.
Crude exports jumped 10 percent from a year earlier to total 1.206 million bpd, but higher export volume was offset by the crash in crude prices. The average price of Mexico’s mix of crude exports for the quarter was $41.75 per barrel, down nearly 54 percent from $90.42 a barrel during the same quarter last year. Total sales for the July to September period were 313 billion pesos, with earnings before earnings before interest, tax, depreciation, and amortization (EBITDA) 119 billion pesos, Pemex said in a statement.
Pemex said it had reached a deal with its union to reduce the company’s massive pension liability, much of which the government will absorb. The company did not detail how it will reform pension benefits for current and future employees, a condition set by the energy reform finalized last year. It said specifics would be announced in the next few days. Pemex, struggling to turn around a decade-long slump in crude oil output, said production totaled 2.26 million barrels a day.
Pemex imports about half the gasoline consumed in Mexico, and the weakening Mexican currency added to those peso costs. Mexico’s peso depreciated 26 percent from 13.4235 pesos per U.S. dollar at the end of the third quarter last year to 16.933 pesos per dollar this year. Pemex expects crude oil production next year to remain near current levels, at between 2.2 million and 2.3 million barrels per day (bpd) in 2016, Deputy Energy Minister Lourdes Melgar said last month.
Output has dropped nearly a third since hitting peak production of 3.4 million bpd in 2004. A slump in oil output this year has weighed on growth in Latin America’s second-largest economy. The energy policy overhaul approved by Mexico’s Congress last year ended the decades-long monopoly enjoyed by Pemex and opened the sector to private producers in the hopes of luring new investment into the flagging sector. ($1 = 16.933 pesos at end-September)