Pemex Says $8 Billion More in Government Aid Could Be on Its Way

  • Mexico's oil producer posted a $3.6 billion first-quarter loss
  • Aid would add to financial support this month to pay debt

Mexico is doing everything it can to salvage its cash cow, and the next step may be to reimburse the oil giant for $8 billion in pension liability savings.

Petroleos Mexicanos, grappling with the collapse of oil prices, might receive a second dose of government support this year, according to Chief Financial Officer Juan Pablo Newman. The newly announced aid package, which is under revision from the finance ministry, comes on the heels of a $4.2 billion capital injection announced earlier this month.

"These measures represent clear progress that guarantees the sustainability of the company," Newman said on the company’s first-quarter earnings call on Thursday.

The plan is further affirmation that the government is behind its state-owned producer, which has seen crude output decline 11 straight years and owes more than $185 billion in debt and pension liabilities. The aid would be a form of compensating Pemex for reducing government payments to the company’s pensioners after the producer increased the retirement age in an overhaul last year, Newman said.

"It is not explicitly said that it has to be in a liquid form,” Newman said of the potential cash injection. The aid could amount to as much as 136 billion pesos ($7.9 billion), he said.

Pemex posted a 14th consecutive quarterly loss of 62 billion pesos, less than the 100.5 billion pesos from a year earlier. The company has posted losses totaling more than $58 billion since 2012.

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