In a recent development, Schlumberger (SLB), the world’s largest oil services company, announced that it has successfully recovered $560 million of the $1.015 billion owed to it by Pemex, Mexico’s state-owned oil company. This recovery comes after SLB took action via a financial institution that had loaned money to Pemex.
SLB, as stated in its 2023 annual report, highlighted Pemex as its “primary customer in Mexico,” accounting for 13% of its accounts receivable. To guarantee payment, SLB issued a credit default swap (CDS) to the bank involved, with the CDS’s notional amount increased from $275 million to $560 million in January 2024. The CDS is set to reduce on a monthly basis over its 26-month term.
Despite the recovery, neither Pemex nor SLB has immediately responded to requests for additional comment on the matter.
Pemex has been grappling with a significant financial debt, surpassing $105 billion, primarily in the form of widely held bonds and additional provider debt amounting to 17.220 billion, according to the company’s own data. This mounting debt has raised concerns about its impact on production, investment, and the viability of its suppliers.
Under the government of President Andres Manuel Lopez Obrador, Pemex has received substantial financial support, including capitalizations, debt amortizations, rebates, and tax benefits, totaling tens of billions of dollars. Despite these efforts, Pemex has struggled to prevent a decline in its crude oil and condensate production, which currently stands at approximately 1.9 million barrels per day.
The recovery of $560 million by SLB represents a significant step in addressing Pemex’s financial obligations to its suppliers. However, the broader implications of Pemex’s debt and its impact on the oil industry in Mexico remain a topic of concern for both the company and its stakeholders.
(Source: Gary McWilliams | Ana Isabel Martinez | Stephen Coates | Reuters)
