Petroleos Mexicanos is negotiating with Goldman Sachs Group Inc. and JPMorgan Chase & Co. to raise at least $1 billion in financing as the loss-making, debt-laden oil scrambles for cash amid collapsing production.
Pemex is in talks with Goldman Sachs for guaranteed financing for its crude, and with JPMorgan for financing tied to its gasoline sales in Mexico, according to people familiar with the transactions. The two deals this year could raise well over $1 billion, said the people, who spoke on condition of anonymity because they are not authorized to discuss the private talks.
Representatives for Pemex and the Finance Ministry did not respond to a request for comment. Goldman Sachs and JPMorgan declined to comment.
The plan to offer collateralized debt is indicative of the liquidity crisis facing the world’s most indebted oil driller. It comes after Pemex issued $2 billion in 10-year bonds in January that were among the most expensive new debt of the year. While the high cost can be partially explained by current global credit conditions, the fact that the driller has tapped international capital markets underscores its problems.
The company has $105 billion in outstanding debt, with about $8 billion due this year, Moody’s Investors Service said in a Jan. 31 note. Its bonds due 2033 fell to 96.15 cents on the dollar on Tuesday from 96.86 cents on Friday, according to Trace prices.
Pemex has been asking banks since last year for innovative solutions to help manage its mountain of debt. Bloomberg previously reported that Pemex has been in talks with Goldman Sachs and HSBC Holdings Plc for financing tied to reducing greenhouse gas emissions.
Crude output has been declining for more than a decade and a half, and the company posted losses in the third quarter, even as its global peers raked in billions of dollars in profits. Pemex has focused on expanding its refining capacity as part of a government bid to make Mexico self-sufficient in fuel generation, undermining its core drilling business.
President Andrés Manuel López Obrador has said that the Ministry of Finance will help Pemex if it cannot pay its debt. But the government would prefer Pemex to cover its own debt repayments as it faces budget constraints. It has already provided Pemex with about $45 billion in tax breaks, capitalization and other financing since 2019.
–With the assistance of Maya Averbuch.
