Pemex sees crude production dip 3% in October

Mexican national oil company Pemex produced nearly 3% less crude in October compared with the previous month, as the heavily indebted firm struggles to reverse a prolonged production slump.

Output averaged 1.66 million barrels per day (bpd) last month, or about 50,000 barrels less than in September.

Compared the same month last year, Pemex’s October oil output was down 5.5%.

The company produced 3.4 million bpd in 2004, but production has steadily declined every year since then. Pemex debt has grown dramatically to just under $100 billion as of the end the third quarter.

Pemex Chief Executive Octavio Romero has at times this year announced that the company’s oil output has stabilized, while predicting that it should be producing around 1.8 million bpd by the end of this year.

Pemex’s press office did not immediately respond to a request for comment.

President Andres Manuel Lopez Obrador, who appoints the Pemex chief and has made the company’s revival a top priority, has said the firm’s oil output will reach some 2.7 million bpd when his six-year term ends in 2024.

Lopez Obrador, a leftist resource nationalist, has suspended competitive oil auctions open to private and foreign oil companies. He has also canceled auctions to pick joint venture partners for Pemex, a common industry practice designed to share the rewards and risks of complex oil and gas developments.

Both decisions have been sharply criticized by industry analysts as well as credit ratings agencies.

The company’s taxes contribute about a fifth of federal government revenue. (Reporting by Ana Isable Martinez; Writing by David Alire Garcia; Editing by Steve Orlofsky)