Mexico’s President-elect Claudia Sheinbaum appointed power economist Victor Rodriguez Padilla to guide state-owned oil driller and refiner Petroleos Mexicanos as her administration appears to revive the corporate’s flagging manufacturing and trim its practically $100 billion debt burden.
Sheinbaum tapped Rodriguez, a professor on the Nationwide Autonomous College of Mexico, for the job to spice up Pemex’s profitability and rescue the corporate from ballooning debt and recurring accidents as she seeks to leap begin Mexico’s inexperienced power transition.
“He has 42 years of expertise within the power sector and naturally he’s been a defender of the power corporations of the nation,” Sheinbaum mentioned when she introduced the appointment throughout a information convention Monday. “Victor is aware of Pemex.”
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Rodriguez will face the gargantuan process of turning round manufacturing that has slumped to about half its peak 20 years in the past. The corporate’s debt burden stands at about $99.4 billion, making it the world’s most indebted oil producer. It’s been saddled with lethal fires, oil spills and methane leaks lately as its infrastructure crumbles. It depends closely on authorities handouts to remain afloat.
“Pemex just isn’t a useless firm — neither is it as dangerous as they assume,” Rodriguez mentioned throughout the information convention. “We have to keep the power base of the financial system, which continues to be oil and gasoline, whereas we stock out the power transition.”
Mexico will keep crude manufacturing at round 1.8 million barrels per day, however all new power demand might be met by way of renewable sources, Rodriguez mentioned. It’s a purpose that Sheinbaum, an environmental engineer, repeatedly touted throughout her marketing campaign.
“Pemex just isn’t going to restrict itself to creating oil and gasoline condensate because it has at all times completed,” Rodriguez mentioned. “We must make a giant effort to develop renewable sources of power of every kind, and Pemex could have a elementary function.”
He cited photo voltaic and off-shore wind energy power as potential choices.
Rodriguez, who has co-authored a number of educational and opinion articles with Sheinbaum, holds a doctorate in power economics from Pierre Mendès-France College. He has spent nearly all of his profession at Nationwide Autonomous College of Mexico, the place he acquired levels in physics and engineering.
Having a tutorial on the helm of Pemex may result in higher collaboration between the corporate and Mexico’s power and finance ministries, Bradesco analyst Rodolfo Ramos wrote in a observe to purchasers. He additionally famous that Rodriguez’s willingness to accomplice with the non-public sector may assist the corporate’s backside line.
Returning Pemex to profitability might be a monumental process. Final quarter, the corporate posted its worst loss because the world pandemic emerged greater than 4 years in the past, largely because of a slide within the worth of the peso in latest months.
To remain afloat, the corporate has relied on authorities handouts. President Andres Manuel Lopez Obrador has showered it with capital injections and tax reduction totaling as a lot as $80 billion, although the infusions have completed little to enhance oil output.
Pemex can be dealing with billions in late funds to service suppliers. Repeat accidents lately have led many buyers involved with environmental, social and governance metrics to flee.
Rodriguez will take the helm when Sheinbaum assumes workplace Oct. 1. Pemex’s outgoing CEO, Octavio Romero, will stay within the authorities, Sheinbaum mentioned, with out specifying his function.
Sheinbaum says she envisions Pemex taking part in a task in Mexico’s transition to cleaner sources of power and has promised to increase it into inexperienced applied sciences, together with hydrogen, lithium extraction and electric-vehicle infrastructure. The corporate printed its first sustainability plan in March after a few of its collectors threatened to divest from the corporate if it didn’t clear up its ESG file.
One other main query is how Pemex will work with the non-public sector to show round manufacturing, reminiscent of the corporate’s latest deal to farm out a few of its offshore manufacturing to non-public drillers. Sheinbaum has vowed to maintain state-owned enterprises on the heart of Mexico’s power sector, echoing a place taken by AMLO.
Sheinbaum has additionally mentioned she expects to refinance the corporate’s bonds earlier than giant maturities come due in 2025. The corporate has greater than $7 billion in bonds maturing subsequent 12 months, in keeping with the most recent firm knowledge.
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