Mexico`s state oil company Pemex needs more fiscal and managerial autonomy to improve its financial situation and take advantage of high oil prices, Pemex CEO Luis Ramírez Corzo told congress as part of the Fox administration`s fifth annual report.
Greater autonomy would allow Pemex to be more flexible in terms of operations, administration and financial activity to reach international standards in terms of productivity, competitiveness and transparency, he said.
Fox recently vetoed a proposal to reform Pemex`s tax regime and sent nine groups of observations back to congress for further consideration.
However, Pemex should not intervene in the formulation of energy policy because this is the responsibility of the executive and legislative branches, Ramírez Corzo said.
Pemex faces the challenge of improving its financial situation and reversing a historical tendency of declining investments, but the company has invested more in the four years of the Fox administration than in the 1980s and 1990s, he said.
Pemex invested US$10.9bn in 2004 for a fourth place ranking in terms of investment among the oil sector`s leading firms, Ramírez Corzo told congress.
In the four years from 2001-2005 Pemex has increased its investments reaching an average US$9bn a year, the highest level in history and double the amount invested annually in the 1990s.
Pemex`s crude output has risen 13% to about 3.4 million barrels a day in 2005 compared to 2000, he added.
However, Ramírez Corzo warned that the increasing frequency of accidents affecting Pemex infrastructure in recent months is due to the lack of funds for the maintenance and replacement of obsolete machinery in past years.
Pemex has invested a total US$4.5bn in oil exploration in the last four years, with most of that financing coming from the Pidiregas scheme, he said.
Pemex has added 54 billion barrels of estimated crude reserves in this period, more than the country`s actual proven reserves, he added.
Investments by Pemex`s refining, gas and petrochemicals subsidiaries have also increased but there are !great opportunities! to reduce fuel, natural gas and petrochemicals imports.
Pemex launched a 40bn-peso environmental and safety program five months ago, which has had positive results in terms of reducing the number of work-related accidents but still has a long way to eliminate accidents completely, Ramírez Corzo said.
Copyright (c) 2005, Shipnoil Corporation.