Mexico's Pemex to slash down jobs in 2016
Mexico oil giant Petroleos Mexicanos (Pemex) is planning to trim its headcount in 2016. The State-run company has suffered a record loss, while its production is declining to 25-year low. Pemex has taken up a restructuring exercise to bring back profitability to the company.
The current headcount stands over 153,000. The oil production at Pemex in 2015 fell to lowest since 1990. A series of accidents and budget controls restricted the production levels.
Mexican economy is opening up for overseas companies. Pemex's interim Chief Financial Officer Rodolfo Campos said that restructuring plan to synchronize the company to industry standards. Pemex may anytime announce job cuts, reported byBloomberg.
The decline in oil production and opening of economy are posing major challenges to Pemex. The liberalization of Mexico's oil sector will see the country buying more gasoline from US refiners as well. Pemex needs to enhance its operational efficiency to withstand the competition from the US refiners.
Campos said: "This is an addition to other tools to slowly align the company to industry metrics. The company had over 153,000 employees by end of 2014." However, he didn't specify how many jobs would be cut.
As part of the restructuring plan, Pemex is charting a strategy of forming partnerships along the production chain. Pemex is considering a proposal to tap private capital for implementing business plan. The capital spending for 2016 has been reduced by 73 billion pesos ($4.4 billion) to 293 billion pesos, the lowest since 2007, as reported by World Oil.
Pemex is primarily focusing on upstream partnerships to enhance production in mature fields. The oil company hopes to finalize the joint ventures in 2016. The company is in the process of re-designing the entire proposal owing to market conditions.
According to a report by Oil & Gas Financial Journal, Pemex's debt is reaching $100 billion. The company has posted $10.2 billion loss for the third quarter. The $10.2 billion loss was a record level for the oil company. The gap between actual oil production and output forecast has been widening from 2013 onwards.
Mario Beauregard stepped down from CFO position on 13 November 2015 after Pemex reporting the record losses. Juan Pablo Newman, the adjunct financial director at Mexico's Nacional Financiera development bank (Nafinsa), will succeed him and assume charge on 1 January 2016.
US is not only bordering country, but also witnessing surplus oil production. So far, Pemex was enjoying its monopoly and its refining business was unchallenged in the market. Pemex's processing in 2015 is expected to be 1.091 million barrels per day (bpd) indicating lowest since 1990.