This year, during each working day, Pemex has been producing 7.1 percent less crude oil than in 2018. Per day, it is also producing some 497,000 barrels less than what it promised during the presidential transition. This is equivalent to producing only 77.3% of what he promised President López Obrador and the people of Mexico. The shortfall is now worth $49.8 million a day, or $18 billion a year.
At today’s prices, we are talking about an annual gap in Pemex’s income of more than 350,000 million pesos. Already converted to taxes, there are about 200,000 million pesos per year that the Mexican Public Treasury will no longer receive; just over 5% of total tax revenue. To put it in perspective, if Pemex had complied, President López Obrador would not only have enough to pay for the Dos Bocas refinery without having to take resources from other budget items. He would afford him, lavishly, for a Dos Bocas per year.
Of course, the president, who has rhetorical remedies for any occasion, says that all this is on purpose. According to him, at some point he turned 180 degrees and gave the instruction so that Pemex only produces what he is going to refine at the end of his six-year term. From then on, according to his rhetoric, he feels satisfied with Pemex producing a fraction of what he recently promised. The president who promised to restore the greatness of Pemex now tells us that it was always in his plan that the Pemex of his Administration produce much less oil than that of the Peña Nieto Administration, which he criticized so much. The president who criticizes so much the speculation of investors who, according to him, do not invest, perhaps he will have invested more in Pemex. But he will have produced much less. How much sense can that make? Was this really his plan?
To be honest, it rather seems that the president fell flat. I do not blame him. When the tactic of other data was barely invented here, Pemex had been perfecting it for decades.
To Zedillo and Fox, Pemex promised to extend Cantarell’s peak if only investments were increased. What ended up happening is that, with the aggressive techniques implemented, their decline accelerated. Pemex promised Calderón glory with Chicontepec. But he never managed to produce more than 20% of what he promised. Thus billions of dollars were wasted and repeated promises of restored oil greatness struck out.
Peña Nieto also fell. He famously promised a production of 2.5 million barrels per day by the end of his Administration. Hence, Pemex (with and without partners) would represent almost 90% of its production. But when 2018 rolled around, Pemex was only producing 1.8 million barrels a day. It had fallen short by about 500,000 barrels a day. He was producing only 78.2 percent of what he promised.
It is tempting to remain in the comparison with this Administration. Here the difference with respect to the promises reached, in absolute terms, to equal levels faster. That is to say, this Administration is doing worse. In percentage terms, the negative variation with respect to its goal is even more pronounced. Again: worse.
But there is a much more important point. It is true that many decades ago Pemex gave us the pride of feeling like leaders in the oil world. Does that give you an eternal right to overpromise all of our presidents and end up letting them down? Maybe at some point they know and collude, but what about the rest of the Mexicans? How long will we allow Pemex to continue living off its past, at the expense of our present and future?
@pzarater
Consultant
Beyond Cantarell