Pemex Misses 2020 Target

(Bloomberg) -- Petroleos Mexicanos’s crude production fell last year and failed to reach its target, thwarting the government’s plans to reverse more than a decade of output declines.

The state-owned company’s oil output reached 1.61 million barrels a day in 2020, 103,000 barrels a day less than its goal, according to data published by the National Hydrocarbons Commission, or CNH, on Monday. Pemex’s output fell 1.8% compared to the previous year, the data showed. Overall output reached 1.66 million barrels a day last year, with private companies accounting for almost 54,000 daily barrels.

It’s the 16th consecutive year of oil declines for the state-owned driller.

Pemex expects to produce 1.94 million daily barrels on average in 2021, though it hasn’t provided a clear strategy of how it will meet that target. It has struggled under one of the heaviest tax burdens in the industry and its financial debt of $110.3 billion is the highest of any major oil company. For years, Pemex has failed to invest in new fields, resulting in dwindling reserves and sinking production that has sparked the downgrade of its bonds into junk territory.

Mexico President Andres Manuel Lopez Obrador swept into power in late 2018 promising to return Pemex to its former glory by ramping up production at less costly fields in shallow-waters and onshore areas, while scaling back investment in more promising deep-water areas. His nationalist agenda has seen farm-out opportunities with Pemex halted, preventing it from finding partners to help develop more expensive and technically-complex areas that could enable it to boost output over the long term.

--With assistance from Dale Quinn.

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