MercoPress. South Atlantic News Agency

Mexico's oil company Pemex reports massive loss in 2008

Mexico's government owned oil and gas company Pemex reported a fourth-quarter net loss of 115 billion pesos (8.3 billion US dollars) on Friday, 254% more than in the year-ago period on declining crude exports, low oil prices and currency losses.

Pemex, which is taxed heavily to provide more than a third of the Mexican government's fiscal income, said in a statement to the stock exchange its sales fell to 264 billion pesos in the quarter, down 17% over the year-ago period. The company said that a steep slump in the peso in the fourth quarter led to an exchange rate loss of 68 billion pesos. Last Friday the Mexican peso closed at 15.22 to the US dollar, having lost 50% of its value since July 2008 (10 pesos/US dollar). Pemex also said its tax bill last year rose 13.9% to 772 billion pesos. The company also suffered from a drop in prices in the fourth quarter, when Mexico's export blend fetched an average of 45.6 USD per barrel, down 41% from the year-ago period. Doubts are growing that Mexico can halt a four-year decline in crude oil production after its January oil output slumped to a more than 13-year low. In January, crude output in Mexico, a top US supplier, dropped 9.2% year-on-year to 2.685 million barrels per day, its lowest level since November 1995 and just below state oil company Pemex's 2009 target of 2.7 to 2.8 million bpd. Average exports amounted to 1.4 million bpd. The huge Cantarell oil field was Mexico's crown jewel for years, pumping more than 60% of the country's oil. But output has slumped by nearly two thirds since a 2004 peak of just over 2 million bpd. New projects aimed at making up the gap are moving slowly. At the end of 2008 Pemex liabilities stood at the equivalent of 88.6 billion US dollars.