Mexico’s Pemex plans to cut 3,000 jobs as part of a restructuring move aimed at reducing its expenses, Bloomberg has reported, citing a company document.
The restructuring should lead to savings to the tune of $540 million, the document showed, by transferring over $300 million from Pemex’s personnel budget to its exploration and production department and help increase oil and gas output.
The drive will also result in a more simplified corporate structure with the closure of three sub-directorates and nine management areas to streamline operations, according to the document that Bloomberg cited.
Pemex reported a loss of $2 billion for the first quarter of this year. Although bad, the result was a marked improvement on the final quarter of 2024, for which the Mexican state energy major booked a loss of as much as $9 billion. Both figures compared to a positive net result for the respective year-ago periods, highlighting the struggle that Pemex is engaged in to remain in the black.
The company has attributed its negative results on declining production and sales, with production falling by 10% over the course of 2024 and operating costs rising while asset valuations declined. In a recent bid to reverse the decline in production and improve financial performance, the company recently said it planned to reopen old wells.
Pemex has more than 31,000 wells across the country, onshore and offshore. Of these, about a third are idled. Some 4,800 are classed as operational, meaning they can be restarted—at a cost. Yet the production decline needs to be reversed because it is affecting exports. In January this year alone, exports of crude fell by 44%, which was the lowest export rate since 1990.
This year, Pemex expects production at 1.58 million barrels daily. That would be down from 1.65 million bpd at the end of 2024. The Mexican government wants this to rise to 1.8 million barrels daily.
By Charles Kennedy for Oilprice.com
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