Mexico's Sheinbaum Says Her Pemex Debt Refinancing Plan Includes New Ventures

Petroleos Mexicano’s debt refinancing should go hand-in-hand with a plan for the state oil company to venture into new kinds of energy projects and boost certainty about the state oil firm’s future, said presidential candidate Claudia Sheinbaum.

The candidate for the ruling Morena party said the company’s expansion of renewable energy production and forays into cogeneration could be part of Mexico’s contribution to reducing world greenhouse gas emissions, expanding on her potential plans for the world’s most-indebted oil company if she wins the Mexican election in June.

“We have a plan for Pemex. I know many of you have it on your minds, and it has to do with a refinancing of the debt associated with a long-term plan for Pemex,” Sheinbaum said at an event hosted by the Council of the Americas in Mexico City on Monday. “In the face of climate change, Pemex has to enter new markets.” Natural gas and oil would still remain “indispensable” for the company, said the former Mexico City mayor, but plans for expanding the firm’s kinds of production would aid with the debt refinancing.

As of Monday, Sheinbaum had 59% of voters’ support and a 25-point-lead over her closest rival, Xochitl Galvez in the Bloomberg Polling Tracker. Pemex bonds due 2047 rose as much as 3.7 cents on the dollar Monday to around 67 cents on the dollar, their highest in almost two weeks. Sheinbaum’s comments seems to resonate on the positive side with investors, said William Snead, an analyst at Banco Bilbao Vizcaya Argentaria in New York. “There are two things here. We see Mexico’s commitment to support Pemex, and secondly, there is an effort to make Pemex more efficient in different ways, which could be more interesting in the long-term profile of the company,” he said.

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