President López Obrador presented Pemex's Business Plan stating that it has performed well in rescuing the oil industry and that "seeding oil" is the strategy to continue its recovery.

Photo: Notimex

After months of waiting and a previous presentation, Petróleos Mexicanos published its 2019-2023 business plan.

The plan is divided into three parts: the first deals with the company's context, environmental analysis, diagnosis, national energy policy and the strategic framework.

The second focuses on the institutional strategic approach and alignment with the National Development Plan 2019-2024. The third section focuses on business opportunities and large-scale projects, resource requirements and financing alternatives, changes to the tax regime and government support, prospective and operational results, strategic risks, performance indicators and goals, as well as final reflections.

The objective of the draft bill is to solve three priority problems: the high tax burden, the debt and the low amounts of investment in activities that "trapped Pemex in a vicious circle".

There are 11 strategic goals, of which 9 correspond to business goals and two are focused on improving the efficiency of its corporate functions within the company, these are the following:

1. Fortalecer la situación financiera de la empresa. 2. Acelerar la incorporación de reservas para asegurar la sostenibilidad de la empresa. 3. Incrementar la producción de hidrocarburos. 4. Adecuar y modernizar la infraestructura de producción. 5. Aumentar la confiabilidad y seguridad de las operaciones. 6. Proveer de servicios de coordinación y soporte al negocio de manera eficiente y oportuna. 7. Crecer la producción de combustibles y petroquímicos. 8. Reforzar la comercialización y contribuir a garantizar el abasto de productos de manera eficiente y oportuna. 9. Fortalecer las competencias para incrementar la eficiencia de las actividades operativas y administrativas. 10. Impulsar el enfoque de responsabilidad social, minimizar el impacto ambiental y mejorar la eficiencia energética. 11. Asegurar la integridad física de las instalaciones y sistemas de información.

The Business Plan proposes a reform to the hydrocarbons tax law to reduce the tax burden of the Shared Profit Right (DUC) tax. With this reduction, it is expected that there will be a decrease in the tax burden for Petróleos Mexicanos of 128 billion pesos by 2021.

Pemex's CEO, Octavio Romero, added that the plan outlines the company's openness to business schemes with the private sector under strict care of its interests, fair and transparent agreements.

"The objective is for the Mexican government to support Pemex during the first three years of the administration, so that in the second half of the administration it will be Pemex that supports the federal government in financing the development and economic growth of our country.

The federal government will continue to strengthen its strategy against tax evasion in order to obtain higher tax revenues.

Prepared by CAINTRA, with information from El Financiero, Forbes, Milenio and El Economista.