Pemex Struggles to Meet $20B Investment Target

Mexican oil giant Petroleos Mexicanos is struggling to meet an ambitious $20 billion investment plan for this year after it nearly quadrupled capital expenditures over the past decade.

Pemex, as the state-run company is known, needs to find new pools of oil to replace traditional fields that are running dry. Pemex said on Wednesday it spent 88 billion pesos ($6.4 billion) during the first half of the year, or 38% of its $16.9 billion exploration and production investment budget.

Pemex’s output has fallen by a fifth since peaking in 2004, and tumbled 7.9% during the first five months of 2009 from the year-ago period.

The company invested $15 billion in exploration and production in 2008, the same as oil majors BP PLC (BP) and Petrobras (PBR), according to a recent Pemex presentation.

Pemex’s total investments, including refining, reached $18 billion last year, up from just $5.1 billion in 1998. This year a combination of a weaker local currency and government revenue shortfalls make it difficult to keep up the pace.

Rigzone