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Pemex Reached Its Production Goal in 2017

Source: www.gulfoilandgas.com 2/26/2018, Location: South America

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Petroleos Mexicanos [PEMEX] announced its financial and operating results as of the closing of 2017. Pemex showed significant operating improvements throughout the year, reflected in the company’s cash flow generation, operating profits and the reduction of net debt, in accordance with the terms of the 2017 – 2021 Business Plan.

Petroleos Mexicanos met its financial balance goal of 94 billion pesos. Sales increased by 30% in 2017 as compared to sales in 2016, while the corresponding sales costs increased 15% (without considering fixed asset wear and tear). Operating profit reached 107 billion pesos. The EBITDA 1/ margin was 30% for 2017, higher than the margin recorded for 2016, which was only 23%. Net debt incurred in 2017 was also lower than the limit approved by the Mexican Congress of the Union and reached 72.4 billion pesos.

It must be pointed out, however, that despite operating and financial improvements achieved throughout the year, Pemex still had net losses for 333 billion pesos. These losses are explained mostly by the application of International Financial Reporting Standards (IFRS) under the “fixed asset wear and tear” item. This item does not represent cash flow.

In 2017, Pemex protected its financial balance from possible drops in oil prices by acquiring oil protection policies. The company will continue this practice during 2018, which covers the price of the Mexican Blend of crude oil at 48.5 U.S. dollars per barrel, according to the price established in the Federation’s Expenditure Budget.

Thanks to the instruments provided by the Energy Reform and in accordance with the 2017 – 2021 Business Plan, Pemex continues to materialize its strategic partnership with a growing portfolio of partners that considerably facilitates the adoption of the best international business practices.

Through these kinds of actions, Pemex reaffirms its commitment to consolidate its finances by focusing on strategic and profitable activities, within the new context of the national energy industry and that of its 2017 – 2021 Business Plan.

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