By Juan Montes / Wall Street Journal
Mexico’s government said Wednesday it will support troubled state-oil firm Petróleos Mexicanos, or Pemex, with $4.2 billion in fresh capital and money to make this year’s pension payments, a step some analysts saw as insufficient if oil prices remain low.
Depressed oil prices and declining oil production have led to a liquidity crunch in recent months for Pemex, Mexico’s largest company by sales and the world’s eighth-largest oil producer. The move was widely expected after the government repeatedly said it would provide financial support to Pemex, which contributes nearly 20 percent of the federal budget.
But some observers were expecting a bolder recapitalization, given that Pemex owes about $6.9 billion in overdue payments to suppliers and the firm’s total unfunded pension-liabilities amount to $86 billion.
“This is not a long-term solution, but rather a bandage to ease Pemex’s short-term cash problem,” said Antonio Juárez, an energy consultant and former Energy Ministry official. He said more support could come if oil prices don’t rebound significantly or if Pemex fails to deliver on spending cuts to which it has committed.