3 days ago
Exclusive: Frustrated by Mexico's Pemex, Hokchi Energy pushed to change who buys its oil, sources say
MEXICO CITY, June 11 (Reuters) - Mexico's Hokchi Energy, frustrated by months of delayed payments for its oil and gas from state company Pemex, has sought to change its contract so it can do business directly with the company's commercial arm, PMI Comercio Internacional, three sources familiar with the matter said.
Hokchi Energy's bid to change who buys its production highlights the challenges of doing business with Pemex, even as the government wants to attract private investment to help the state company increase output.
PMI, which exports crude oil and imports refined fuels such as gasoline and diesel, is widely seen as a more reliable business partner than Pemex, one source said.
The attempt to change the contract is the latest twist in a long-running saga of Pemex's delayed payments to Hokchi Energy, one of Mexico's largest oil and gas producers, which is among a growing number of companies reluctant to work with Pemex, the world's most indebted energy company. One source said Pemex owes Hokchi Energy over $300 million.
Under the proposed new contract, Hokchi Energy would sell directly to PMI, in the same way as if it were selling to any global trader, the sources said. Under the existing contract, Hokchi Energy sells its production to Pemex and is dependent on getting paid by Pemex, which can use the production in its own refineries or sell it via PMI to buyers worldwide.
The sources said that Hokchi Energy had already tried twice to change terms of the contract, making its second attempt earlier this year in hopes Mexico's new government would be more inclined to accommodate the request, but the request was denied.
All sources spoke on the condition of anonymity because the matter is commercially sensitive.
Mexican Energy Minister Luz Elena Gonzalez denied the request this year, according to the other two sources. Neither the energy ministry nor Pemex responded to a request for comment.
Hokchi Energy operates the shallow-water Hokchi field in the Salina del Istmo basin in the Gulf of Mexico, secured through the 2014 landmark energy reform that opened the country up to private investment.
The field produces some 23,000 barrels of oil equivalent per day.
Hokchi Energy said in a statement that "our dialogue with Pemex is constant and productive" and "our operations have been maintained."
Harbour Energy, which also has a stake in the field, declined to comment.
The total debt Pemex owes to Hokchi Energy amounts to around $380 million, said the second source, adding that the exact value fluctuates because it is for crude, which is priced daily.
Pemex itself disclosed debts invoiced to the company of $92.41 million in 2024 and $88.66 million this year, official data from March showed. The source said the real debt is higher than disclosed because some outstanding invoices have not been included.
In 2023, Hokchi Energy took legal action against Pemex to demand it pay the money it owed. Hokchi Energy filed another lawsuit in recent months, the second source added.
Pemex has for years struggled to pay providers for everything from hydrocarbon productions to services and infrastructure, according to interviews with dozens of separate sources across the sector.
In dire need of new investment and technology, Pemex's production has been declining as older fields are being depleted and newer discoveries have largely disappointed.
Reuters reported last month that Pemex planned to open old wells in a bid to boost output.
Pemex also owes some $20 billion to service providers like Baker Hughes, Halliburton and SLB, official filings show, as well as smaller Mexican companies, some of which have warned that they could go bankrupt as a result of Pemex not paying.
Even when owed substantial amounts, companies are reluctant to speak out or take legal action for fear of being penalized by the state behemoth that dominates the energy market, the industry sources said.
Mexican President Claudia Sheinbaum has repeatedly said that her government was working on various payment mechanisms to address the issue.
Despite unprecedented support from her predecessor and political mentor, energy nationalist President Andres Manuel Lopez Obrador, Pemex still has a financial debt of some $101 billion.
