Pemex sharply reduces losses as oil prices rise

MEXICO CITY, Feb 27 (Reuters) – Mexican state-owned oil company Pemex on Monday reported a much smaller fourth-quarter loss, due in large part to higher crude prices.

The loss narrowed to $1.58 billion (32.6 billion pesos) from $9.8 billion a year earlier.

“Pemex’s finances are today stable with positive trends; however, we believe there is certainly room for improvement,” Chief Financial Officer Juan Pablo Newman said on a conference call with analysts.

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Revenue at the company officially known as Petroleos Mexicanos rose more than 20 per cent to $15.67 billion, according to a filing to the Mexican stock exchange.

The price of Mexico’s crude oil export mix jumped by 22 per cent during the quarter to average nearly $41 per barrel.

Still, Pemex has not posted a quarterly profit since 2012.

Long used as a cash cow for the nation’s government, Pemex now contributes less than a fifth of federal revenue, down from more than a third a few years ago.

The Mexican government is implementing an energy industry revamp finalized in 2014. It ended the decades-long production monopoly enjoyed by Pemex, which led to the first-ever competitiveoil auctions and joint venture partnerships.

Crude production in 2016 fell 5 per cent to 2.154 million barrels per day, while fourth-quarter output dropped 9 per cent to an average 2.07 million b/d from a year earlier.

Pemex’s crude production has steadily declined from a peak of 3.4 million b/d in 2004.

The government has said it expects crude output to average 1.94 million b/d this year and between 1.9 million to 2.0 million b/d in 2018.

Natural gas production was down nearly 10 per cent in 2016 to average nearly 5.8 million cubic feet per day.

Crude oil processing was down about 12 per cent in 2016 to average 933,000 b/d, while it dipped to just 784,000 b/d during the fourth quarter.

Meanwhile, Pemex exported 1.194 million b/d last year, up nearly 2 per cent from 2015, while shipments for the quarter were up nearly 7 per cent.

($1 = 20.64 pesos at the end of December)

(Reporting by David Alire Garcia; Editing by Lisa Von Ahn)