Pemex to Seek $8B-$10B Financing for 2010 Investments

In a conference call with analysts Friday, Pemex's Chief Financial Officer Esteban Levin noted that the Mexican oil major will most likely borrow between $8 billion and $10 billion during 2010 to help finance its investment plans.

Levin confirmed that Pemex's investment budget is tagged at $18-$20 billion, with the final amount to be determined following the outcome of the government's budget discussions.

Such borrowing will increase Pemex's net debt by some $3 billion or $4 billion; at the end of the third quarter 2009, the state-owned company's net debt was nearly $37 billion, with total debt close to $51 billion.

According to Levin, the company has already prefunded for the upcoming year, however, more investments are sought from financing sources, such as capital markets, banks and export-import banks.

Pemex has accelerated its investment plans to fund more exploration measures in Mexico as an attempt to curtain production from its waning Cantarell oil fields, which are the primary source of oil for the Latin American country. Mexico's production output is anticipated to be around 2.5 million in 2010.