Suspension of oil and natural gas bid rounds by Mexico’s next government could lead to missed opportunities and cause drillers to look elsewhere to grow their portfolios, according to a local expert.
Mexico must unlock its deepwater and unconventional hydrocarbon resources to reverse a decade-and-a-half trend of declining output, according to hydrocarbons undersecretary Aldo Flores.
Tax Break or No, Mexico’s Pemex Likely to Require More Government Support, Fitch Says
Mexican state oil company Petróleos Mexicanos (Pemex) would require more government support over the coming years if it wants to increase capital expenditures (capex) without taking on more debt, even if proposed tax breaks for the firm are passed by legislators, according to Fitch Ratings.
Senator Armando Guadiana, a member of President Andrés Manuel López Obrador’s Morena coalition, has introduced a bill that would see heavily indebted Pemex’s profit-sharing duty reduced to 35% from the current effective rate of 58%.
The current rate is scheduled to decrease to 54% in 2021, which would remain the effective rate if Guadiana’s bill fails to pass, said the Fitch analyst team led by Lucas Aristizabal.