Pemex Reports 11th Straight Loss as Accidents Cripple Output

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Petroleos Mexicanos posted its 11th consecutive quarterly loss as a series of accidents combined with a collapse in oil prices to batter the state-run producer’s earnings.

The company’s net loss widened to 84.6 billion pesos ($5.2 billion) in the second quarter from 53 billion pesos a year earlier, Pemex, as the Mexico City-based producer in known, said in a statement Thursday. Sales slid 24 percent to 308.9 billion pesos as output fell to the lowest level in 24 years.

Pemex’s earnings were crimped after U.S. benchmark oil prices fell an average 44 percent from 2014 and production slid following three offshore accidents in as many months. Production averaged 2.23 million barrels a day in the quarter, a 9.8 percent decrease from a year earlier, and has declined for 10 straight years since reaching 3.3 million in 2004.

“We continue to face the effects of the accident at Abkatun along the entire value chain,” Chief Financial Officer Mario Beauregard said on an earnings call. At the end of the quarter, “there were still 20,000 barrels per day pending incorporation into production,” he said.

Pemex’s light crude production fell 8.4 percent in the quarter due in large part to the April 1 accident at the Abkatun platform, which killed seven workers and injured 45, according to a presentation that accompanied the earnings call. The cause of the accident is yet to be determined.

‘Adverse Environment’

Pemex, which imports gasoline from the U.S., booked a charge of 28.7 billion pesos stemming from the depreciation of the currency in the quarter, Beauregard said. The Mexican peso lost 3 percent against the U.S. dollar in the period.

The company “faces an adverse environment from the supply and demand standpoint in the oil market, as well as a strong U.S. dollar,” Beauregard said.

Pemex is counting on forming alliances with private producers in 10 fields to generate new investment and boost daily output to as much a 2.4 million barrels by the end of the year. Mexico’s landmark energy industry opening, which allows foreign producers to explore for hydrocarbons, began in disappointing fashion this month after only two of 14 shallow water fields up for auction received qualifying bids.

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