Pemex to spend $12 billion in 2004

Petroleum News

The state-owned energy company that provides one-third of Mexico’s revenues racked up a $3.7 billion net loss for 2003. It was the sixth consecutive year Pemex, Mexico’s only oil and gas producer, has reported an operating loss.

Pemex plans to spend a record $12 billion this year, $11 billion of which will “go into long-term infrastructure, or Pidiregas projects in exploration and production,” the company’s Finance Director Juan Jose Suarez said in a March 1 conference call.

Last year, Pemex’s capex budget was $10.7 billion, an investment that resulted in a 6 percent increase in oil production, reversing a four-year trend of declining natural gas production, Suarez said.

By 2006 Pemex, which is the world’s eighth largest integrated oil and gas company, is looking to both increase crude production to 4 million barrels per day and raise its reserve replacement rate to 75 percent from 3.37 million barrels and 45 percent respectively in 2003.

The company’s main source of crude, the Cantarell Gulf oil field, is expected to be in decline by 2014.

Pemex blamed its 2003 loss on a currency write-down of the peso, which slid against the dollar last year.

The company pays 61 percent of its revenues in taxes.