Exploration & Production

Pemex to pay more taxes

MEXICO CITY

Mexico’s new leftist president has pledged to revive the fortunes of state oil company Pemex with a bigger budget next year - while proposing the oil giant pay even more in taxes.

The former monopoly oil producer, officially known as Petroleos Mexicanos, is due to contribute more revenue to the federal government than lawmakers are scheduled to grant the company for its spending.

"The Pemex tax burden is punitive, it’s extremely high and it doesn’t allow Pemex to reinvest," said John Padilla, a Bogota-based consultant with IPD Latin America.

President Andres Manuel Lopez Obrador, who won office in July vowing to rescue Pemex from years of decline, has proposed increasing the firm’s discretionary budget by 14 per cent from 2018 to some $23.4 billion (464.6 billion pesos).

But the same budget proposal estimates total tax revenue from Pemex at about $26.4 billion (524.3 billion pesos), up about 11 per cent.

The finance ministry did not reply to requests for comment.

Characterizing Pemex as a "piggy bank" for successive governments, Padilla said it was more heavily taxed than state-run peers including Brazil’s Petrobras and Colombia’s Ecopetrol.




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