Pemex gets approval for $ 30 bn in 2009 spending budget

Nov 14, 2008 01:00 AM

Mexico's lower house has approved the 2009 federal budget that includes pesos 389 bn ($ 30.1 bn) for state oil company Pemex, making up 12.8 % of the total pesos 3.05 tn.
The funds for Pemex are made up of pesos 349 bn of programmable expenses and pesos 40.0 bn of non-programmable expenses. Programmable expenses relate to funds that can be assigned by the firm for certain objectives, while non-programmable expenses relate to existing commitments such as debt payments.

The programmable expenses include pesos 90.3 bn from the stabilization fund for investment in Pemex. The funds will be used to convert Pemex's debt from public infrastructure financing plan Pidiregas into public debt and to create a peso 65.1 bn- program for additional expenses. The additional expenses will include funds for a new Pemex refinery.
"The accumulation of these resources is very important for the crisis coming in 2009, a crisis transmitted to Mexico fundamentally through the reduction of oil prices," the technical secretary of the house's energy committee, Miguel Perez, told. "If we add to that the difficulties Mexico will have in producing the same amount of hydrocarbons, the problem multiplies," Perez said.

The programmable expenses also include pesos 200 bn for the import and resale of crude products. Although Mexico is a net crude exporter, Pemex imports some 40 % of gasoline consumed in the country.
Pemex's funds for 2009 mark a sharp increase on the proposal submitted by finance minister Agustin Carstens. Carstens had proposed pesos 202 bn for Pemex in 2009, up from pesos 191 bn in 2008. The increase is primarily due to the elimination of the Pidiregas plan and the resulting incorporation of planned Pidiregas funds into Pemex's programmable budget, Perez said. The budget assumes an oil price of $ 70/bbl, Perez said.

Energy ministry Sener was given pesos 43.8 bn in the 2009 budget, up from the peso 43.1 bn proposal made by Carstens. The increase in Sener's budget was due to recent energy reformmeasures passed by congress that gave the ministry additional responsibilities, Perez said.
The lower house approved the budget with 436 votes in favour and 44 votes against.

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