(Bloomberg) -- Mexican state oil company Petroleos Mexicanos is putting a freeze on new contracts with service providers as the company works to pay off the roughly $20 billion it owes suppliers.
The temporary halt by Pemex’s exploration and production arm applies to new agreements with contractors that haven’t been previously formalized, according to an internal company document seen by Bloomberg.
The freeze follows the publication of Mexico’s draft 2025 budget, which allocates less money for Pemex’s exploration and production, according to the document, dated Nov. 25 and signed by Nestor Rodriguez Romero, the company’s head of exploration and production. Pemex may approve select contracts it deems necessary, the document said.
Pemex said in a statement Thursday the company wasn’t “freezing” contracts but rather temporarily suspending them while it performed an analysis of pending deals coming due before year-end. The analysis is being carried out in tandem with Mexico’s 2025 budget guidance and evaluations of the contracts would not compromise the company’s operations next year, according to the statement.
Mexico’s finance ministry is preparing to enlist a group of banks to provide Pemex with financing to pay off the company’s debts to service providers, the company’s CEO said last week. Pemex owes contractors as much as $20.5 billion in back payments for oil field work and other services.
(Updates with Pemex statement in fourth paragraph)
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