Fitch Ratings Inc. has downgraded Petroleos Mexicanos deeper into junk, saying it doesn’t expect the company’s oil production to grow and that recent accidents have called into question its operational capacity amid mounting debt.
(Bloomberg) — Fitch Ratings Inc. has downgraded Petroleos Mexicanos deeper into junk, saying it doesn’t expect the company’s oil production to grow and that recent accidents have called into question its operational capacity amid mounting debt.
Pemex’s long-term issuer default rating was downgraded by Fitch to B+ from BB-, and its ratings outlook was changed to negative from stable. “The downgrades reflect Pemex’s continued weak operating performance,” Fitch said in a statement.
The agency lowered the company’s ESG score to reflect “the environmental and social impact associated with multiple accidents at Pemex’s operating facilities since February 2023.” An explosion at a Pemex natural gas platform earlier this month left two people dead.
Pemex Says Blast Impacted 700,000 Barrels of Oil Output (1)
Fitch was the first major ratings agency to downgrade Pemex’s bonds to junk in 2019. In 2021, Pemex terminated its $350,000 contract with Fitch to cut costs. Fitch, meanwhile, said it will maintain ratings and research on the debt-laden Mexican oil giant for the foreseeable future as a service to investors.
Fitch said that Pemex’s poor safety record will hinder financing from banks, investors, and suppliers at a time when Pemex is facing a liquidity crunch. The company has $107.4 billion of debt, the most of any major oil firm, and Fitch anticipated that production will remain flat at 1.8 million barrels of oil equivalent a day.
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