Pemex eyes menu of funding options ahead of historic reforms
NEW YORK, July 21 (IFR) - Green bonds, debut local loan syndications and Samurais are some of the financing options on the table for Mexican state-run oil company Pemex as it seeks to become a more profitable entity in the wake of the country's historic reforms.
Several bills passed by the Mexican Senate this weekend put the country one step closer to opening up an energy sector closed to foreign investment for decades, while chipping away at Pemex's oil exploration and production monopoly.
The new legislation also gives Pemex more budgetary independence and a new tax regime as it tries to boost oil production to three million barrels per day by 2018.
"Our mandate will change little by little," said Rodolfo Campos, the company's treasurer. "We will be more like a company instead of a government agency. We are changing DNA so that success will be measured by our ability to generate value."
Part of the process requires Pemex to change the way it allocates capital expenditures as it focuses on what it thinks are its most productive assets.
Depending on the ultimate wording of the secondary laws currently moving through the lower house, and foreign investors' response to them, the frequent issuer could feel some added financial pressures as it rushes to increase investments, at least initially.
Once Pemex's chosen assets have been approved by government authorities in "round zero" later this year, the quasi-sovereign then has a relatively short three-year window to make them productive - with an additional two-year extension if required. Otherwise it risks loses them.
"At the beginning could exert pressure to keep those assets in the portfolio," said Campos. "We have to invest in all of them, and that is something we didn't used to do."
On the other hand, financing needs may ease somewhat as foreign investors bid and fund the assets that Pemex decided to discard. Continuación...