It is easy to fall into the trap of referring to the announcements of Pemex’s quarterly results as “repetitive”. Every three months of this last year, it has become an easily predictable endeavor to come across more or less the same sets of reactions to Pemex’s reported losses. These reactions are built around preconceived attitudes concerning the coming energy reform: supporters of energy reform will declare these new losses to be yet another example of the urgent need for a complete overhaul of Pemex, while detractors will be quick to declare the losses minor when considered as a direct result of Pemex’s infamous tax burden (in fact, many anti-reform activists will even lionize Pemex as one of the few companies in the world that could report such “small” losses after handing over such enormous figures to the taxman; this will fit into their larger narrative of Pemex as the über-NOC that so many “greedy transnationals” are only too willing to “dismantle” and “keep for themselves”).
Of course, these perspectives don’t really amount to analysis; they have much more to do with the increasingly polarized feelings surrounding the energy reform debate than with any actual point of view regarding the current state of Pemex. In fact, the whole notion of viewing these announcements as “repetitive” could blind us to some interesting developments. Not all losses are created equal; although Pemex’s 3Q13 results do reflect certain ongoing processes that were a part of their 1Q13 and 2Q13 results as well (an increase in technological investments to satisfy the long term needs of deepwater development, an increase in tax demands to prepare for the coming uncertainty of the fiscal reform, etc…), certain details do stand out in this particular instance of apparently familiar news.
For example, the slight decrease in crude processing and refining (down from 1,298 Mbd in processing and 1,460 Mbd in production of refined products in 2Q13 to 1,196 Mbd in processing and 1,353 Mbd in production of refined products in 3Q13) could be viewed as the fateful beginning of a larger trend that will express itself over the coming months as a result of Pemex’s expected losses in refining of 100,000 million pesos by the end of the year (announced by Pemex CEO Emilio Lozoya Austin this week during the XI Business Summit in the city of Guadalajara). These losses will, to some degree, be supported or exacerbated by a recent accident at the “Miguel Hidalgo” refinery in Tula, Hidalgo (whose renovation through a cooperative contract with ICA Fluor is only now beginning and will probably not start bearing fruit until 2016) and Pemex’s decision to sell several petrochemical facilities in the last month (which affects the workflow of refineries by changing the organizational structure of Pemex’s downstream sector).
This is only an example (an entire entry could be dedicated to the increase in gas processing and dry gas production in the context of Pemex’s decision to declare void the Ramones pipeline phase II tender); the important point to make here is that Pemex’s quarterly losses are not monolithic or “repetitive”; they are much more than a reflection of energy reform-derived fluctuations, and they must be interpreted outside of some dogmatic understanding of the relationship between politics and economics.