Mexico: new president lifts Pemex budget by $3.7 bn

Mexico: new president lifts Pemex budget by $3.7 bn

Mexico: new president lifts Pemex budget by $3.7 bn

/ Financial News / Tuesday, 11 December 2018 07:56

Mexico's new President Andres Manuel Lopez Obrador said he would reverse shrinking investment in the state oil company by pouring $3.7 billion into Pemex in 2019, in a bid to boost crude and refined products' output.

“We are going to increase investment in Pemex by 75 billion pesos from what was authorized for 2018,” the leftist president said in a speech in his home state of Tabasco.

The state oil giant has seen a drop in its production since 2004, when it extracted some 3.4 million barrels per day. Last October, the company produced just 1.7 million barrels of crude.

The new government wants Pemex to produce some 2.4 million barrels per day by 2024.

Lopez Obrador, who took office December 1, also pointed out that the energy industry was going through “a complex situation, difficult and not an ideological issue.”

AMLO, as he is called by his initials, always was a harsh critic of the pro-market reforms introduced by his predecessor Enrique Pena Nieto, who allowed the private sector to take part in the industry for the first time in seven decades.

Pemex's wealth present and future long was touted as the wealth of all Mexicans -- and over time it became a political pillar to which leftists and populists appealed.

AMLO said Pena Nieto's reforms were brandished as a great fix-all, and in the end, output only declined.

At the moment Mexico has to import gasoline for the next three years, a situation AMLO said would change under his plan.

His new project involves updating six existing refineries in Mexico -- which currently operate at less than capacity -- and building another one in Dos Bocas, Tabasco.

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