Pemex: time for turnaround

Mexico’s state oil company is in terrible shape, but is far from a lost cause

HOW does a company lose $70bn over 14 consecutive quarters? Spend some time scouring through Pemex’s finances and you’ll find that declining oil production, rising debt-servicing costs and a crushing tax burden will do the trick. Mexico’s state oil company hasn’t seen a profitable quarter since mid-2012 and the losing streak has plunged the company into crisis. Most importantly, it hasn’t had the cash it needs to maintain production. Since January 2014, oil output has fallen by 12%, from 2.85m barrels a day to just 2.51m b/d in March. It means Mexico has shed more than 300,000 b/d – not far off the entire output of Opec member Ecuador. Combine that slumping output with a price rout and total