Mexico president says will reduce Pemex’s fiscal burden

MEXICO CITY (Reuters) – Mexico’s President Andres Manuel Lopez Obrador said on Tuesday that his government will soon announce extraordinary measures to support Pemex, aiming to reduce the fiscal burden on the state oil company.

“We’re going to reduce Pemex’s fiscal burden like never before,” he told a morning news conference. “This will mean fewer resources for the government but we’re sure we’ll make up for that lack of income.”

New York-based Fitch downgraded debt issued by Pemex by two steps last week, sending the peso weaker and stoking fears that it could significantly raise the oil company’s financing costs.

Last Wednesday, Lopez Obrador brushed off the credit downgrade to Pemex, saying corruption was being eliminated from its ranks and the state oil company was stronger than it has been in 30 years. He complained that in the past, Fitch had given the firm positive reviews despite its problems.

Pemex holds some $106 billion in financial debt.

Rival ratings agency Moody’s said last week it would maintain the company’s credit rating in the first half of the year, while monitoring how it performs under Lopez Obrador.

“This government is coming with a very strong mandate to reduce expenses … just what the company needs,” Moody’s Senior Vice President Nymia Almeida said at an energy conference in Mexico City on Wednesday, according to local media reports.

“We won’t take any action until seeing the first half-year.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.