Pemex Gets New Tax Benefits of as Much as $3.6 Billion

Mexico President Andres Manuel Lopez Obrador announced new tax benefits for Pemex as the beleaguered state oil company seeks to reverse long-term production declines and reduce debt, Bloomberg News reported. Petroleos Mexicanos will get an additional 14% credit stimulus to apply to the taxes it pays on hydrocarbons capped at 73.3 billion pesos ($3.6 billion) for this year, according to a presidential decree. The new benefit comes in addition to previous measures that reduced Pemex’s profit-sharing duty from 65%, to 58% in 2020 and 54% in 2021, respectively. Pemex says that it has one of the industry’s highest tax burdens, paying about $27 billion in net taxes last year, according to a January presentation. It’s debt of $110.3 billion is the highest of any major oil company, and its crude oil output has declined every year since reaching a peak in 2004. Finance Minister Arturo Herrera said that the government will be working on Pemex debt in the coming weeks. The government will make a capital injection of as much as $1.6 billion into Pemex this year, said a person with knowledge who wasn’t authorized to talk publicly about the deliberations. Read more.