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 Business News | April 2008 
Mexico Pemex to Issue 5 Bln Pesos of Citizens' Debt
 Cyntia Barrera Diaz & Lizbeth Salazar - Reuters
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Mexico City - Mexico's oil state giant Pemex would initially issue around 5 billion pesos of citizens' bonds under a government reform plan, Energy Minister Georgina Kessel said Wednesday.
Mexico's government handed Congress on Tuesday a compromise energy reform plant that could attract foreign companies to a hunt for new oil reserves to rescue falling output in the world's No. 5 crude producer.
The initiative would allow citizens to invest in Pemex by purchasing debt bonds whose yields will relate to the monopoly's performance.
"We are proposing that in the first stage we could issue up to 3 percent of Pemex's outstanding debt, which is around 5 billion pesos ($474 million)," Kessel told broadcaster Televisa.
Any Mexican will be able to buy the bonds but Kessel said banks and other financial institutions would also be allowed to participate.
"We are also proposing that Afores (pension funds) can invest," she said.
To avoid extremely wealthy individuals to corner the market on the bonds, Kessel said Mexico's Finance Ministry will issue rules to curb the amounts that each person can purchase.
"We are establishing limits so that the bonds can be purchased by as many Mexicans as possible," she said. ($1 = 10.55 pesos)
(Editing by John Picinich)
FACTBOX-Mexico's Oil Industry
Jason Lange and Catherine Bremer - Reuters
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Following are some facts about Mexico's energy sector as the government presented a sector reform proposal on Tuesday:
• Mexico is the world's No. 5 producer of crude oil by volume and a top three supplier to the United States.
• The industry is in a critical situation with yields at Cantarell - a sprawling offshore field discovered in 1971 when a fisherman noticed oily bubbles in the Gulf of Mexico - slipping fast and a lack of new production to make up for the shortfall.
• Mexico nationalized its oil industry in 1938 and created state-run monopoly Pemex. Mexico has some of the tightest restrictions on private investment in energy in the world, with stricter rules than Cuba, China and Russia.
• Mexico's oil reserves are declining due to years of low investment under seven decades of one-party rule until 2000. Today, Pemex discovers only one new barrel of oil for every two it extracts.
• A refining shortfall means Mexico imports 40 percent of its gasoline. It also imports some natural gas.
• Taxes on oil exports fund nearly 40 percent of government spending, but having to hand over more than half its total revenues has held back Pemex's spending on exploration and new refineries. Two recent tax cuts slightly eased Pemex's burden.
• Mexico produces about 3 million barrels of crude per day, down from a peak of 3.4 million bpd in 2004, and exports about 1.5 million bpd, making it the world's No. 9 oil exporter.
(Editing by Carol Bishopric) |
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