Pemex CEO: Mexico needs energy industry reform
- 16:54 - 17/04/2013
Mexico City, Apr 17 (EFE).- The CEO of Petroleos Mexicanos, or Pemex, said steps to reduce the company's heavy tax burden would be insufficient on their own and that a thorough energy overhaul is needed to pave the way for new investment and allow the state-owned company to modernize and become more profitable.
"From the financial point of view, tax reform would not give Pemex the necessary ability to generate greater value for society," Pemex CEO Emilio Lozoya said Tuesday at the "Mexico: Opportunity and Growth" forum.
A tax overhaul plan to be unveiled soon by President Enrique Peña Nieto's administration could have an impact on Pemex and its operations, since the company pays nearly 60 percent of its gross revenues into the Mexican treasury, representing around 40 percent of the government's income.
It's time to shatter the myth that "a fiscal reform is what could lend much greater viability, value generation, to Pemex," Lozoya said.
Pemex, which enjoys a monopoly in Mexico, takes in more than $100 billion a year in revenue and invests roughly $28 billion annually.
The company is constitutionally barred from entering into joint ventures with private companies that would give them ownership rights over any oil they produced.
But analysts say such arrangements are crucial to boosting sagging production and, in particular, developing promising deepwater reserves in the Gulf of Mexico.
The energy company has 10 years' worth of proved reserves and 30 years' worth of 3P (proved, probable and possible) reserves, Lozoya said.
The Pemex CEO did not answer questions from journalists after addressing the forum.