- Cotemar contracts cut as part of Pemex budget reductions
- Service company has no new contracts with Pemex this year
Petroleos Mexicanos’ woes are hitting home for suppliers that less than two years back were preparing for an oil boom.
Cotemar, one of Mexico’s largest oil service providers, will lay off as many as 2,000 workers after Pemex suspended two of the company’s contracts amid massive budget reductions, according to a company official, asking not to be named because of company policy.
Pemex is slashing 100 billion pesos ($5.7 billion) of spending and freezing several exploration and production projects as it struggles with the collapse of oil prices, declining output and ballooning debt. The austerity is a stark contrast to the tens of billions of dollars in annual investment anticipated when President Enrique Pena Nieto formally opened the state-controlled energy industry to private investment in 2014.
Cotemar, which provides services to platforms owned by Cyprus-based Prosafe SE, had contracts suspended on the Safe Lancia and Safe Regency rigs in the Gulf of Mexico, the official said. Both vessels are likely to be demobilized and moved to a lay-up location, according to a March 7 statement from Prosafe.
Pemex, which owes service providers about $7 billion, has continued to pay Cotemar in a timely manner for its activities, the official said. Pemex plans to pay around 90 percent of the service providers with outstanding debts in the coming weeks, Chief Executive Officer Jose Antonio Gonzalez Anaya said this week.
With the cuts, Cotemar’s staff will be reduced to between 4,500 to 5,000 employees, the official said. Cotemar, which will continue to provide services to Pemex, does not have any new contracts that will come online with the state-owned oil company this year.