Emilio Lozoya, General Director of Mexico’s oil company, Pemex , said oil production for Mexico continues to be profitable bbecause it only costs US$23 to produce each barrel. He talked to El Financiero daily in Mexico. This is an abbreviated run of that interview:
According to Lozoya, in the last five months, the oil industry changed. The offer of oil hiked up by 5 to 7 million daily barrels. These barrels are mainly being produced in the United State and Canada. This combined with a loweroil demand in the world is having an impacton Pemex. Fortunately, it won’t have an impact on our state finances for 2015 because we have insurance.
For our internal work, it definitely affects our income in Pemex. The good thing is that now we have a number of options that we did not have before the energy reforms. We can associate ourselves, and find alternative investment that is not ours. We are trying to be counter-cycle, that is to say that we need to follow our investment, even if we cut expenses in other areas, but we need to be prepared to produce 1.6 million barrels when the price goes up and for that we need to invest now.
Pemex is one of the most important players in the oil business. We invested a lot of money in equipment. Now that the price goes down, we have a lot of equipment and personnel available, more than we need. However, Pemex has some of the most competitive production prices.