Pemex Changes Contracts, Says Providers Can Now Pay Their Debt

Petroleos Mexicanos said rig operators including Perforadora Latina, Oro Negro and Grupo R can make their bond payments after the state oil company renegotiated contracts.

Pemex, as the company is known, reviewed 53 rig leasing agreements, according to an e-mailed statement in response to questions from Bloomberg News. Over the next 12 months, Pemex will pay a 29 percent lower day rate on 20 rigs while suspending 20 others for an average length of one year. Another 13 rig contracts were canceled.

Strained finances due to weak oil prices have caused Pemex to cut its total budget by 21 percent to about $20.2 billion, hurting the balance sheets of its service providers.

The new agreements “will allow the companies to continue to receive cash flow, maintain their liquidity and have the financial resources to meet their bond obligations and keep their jobs,” said a Pemex press official who could not be identified because of company policy. Pemex did not disclose its rig rates, but said it will impose the same fees for similar equipment regardless of the provider.

After sinking to a record low of 29.5 cents on the dollar last month, Grupo R’s Offshore Drilling Holding SA’s $950 million in dollar debt surged by 7.23 cents to a three week high on Thursday, according to TRACE pricing.

Oro Negro defaulted on its debt in the last year after Pemex cut rig rates. Dollar bonds issued by a unit of Perforadora Latina were unchanged today and have fallen by 27 percent this year.

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