1697196391 The specter of a crude oil donation to Cuba widens

The specter of a crude oil donation to Cuba widens Pemex’s gap even further

One of the Pemex platforms near the coast of Ciudad del Carmen in Campeche.One of the Pemex platforms near the coast of Ciudad del Carmen, in Campeche.Cuartoscuro

An alleged donation from the parastatal Petróleos Mexicanos (Pemex) to the Cuban government has triggered a series of reactions that make the company, the world’s most indebted oil company, even more vulnerable. Not only has this cost him the loss of a loan, but it is also complicating his investment prospects, analysts agree.

In recent weeks, media reports have emerged that the Mexican company, citing information from seaports, sent two crude oil ships, one in June and one in July, carrying shipments of crude worth $77 million. Separately, a columnist from the newspaper Milenio assured that the US export and import bank (Eximbank) denied Pemex an $800 million loan in August because it had “donated” barrels of crude oil to Cuba. The situation caused difficulties for Mexican Foreign Minister Alicia Bárcena, who assured that Mexico was looking for a mechanism so that Cuba could pay for this crude oil.

Days later, a Florida representative in the U.S. Congress, María Elvira Salazar, sent a letter to the president of Eximbank congratulating the bank for “upholding human rights” by denying Mexico a loan and arguing that Cuba was a dictatorship. On Monday, Pemex General Manager Octavio Romero appeared before the Mexican Congress and responded to a question from a representative on the issue by denying that the oil had been donated. “Petróleos Mexicanos have not donated fuel to any foreign government,” he said. “I’m not lying,” he said.

Under the Helms-Burton Act in the United States, also known as Libertad, the United States can take legal action against companies that have any economic or commercial connection with the Cuban dictatorship, explains Diego Marroquín, academic and researcher specializes in relations with Mexico. -USA “From this perspective, if a Mexican parastatal has a commercial connection to the Cuban dictatorship, it undermines investment in the country,” says Marroquín. “It becomes much less reliable. An investor or someone who could lend money to Pemex is aware that the company could be prosecuted because of these connections and it is much more difficult for him to borrow money,” says the specialist.

In 2021, President Andrés Manuel López Obrador announced that Mexico would send ships loaded with diesel fuel to Cuba as an “independent nation” at a critical moment for the island’s government when unusual protests broke out. The Caribbean country has benefited from various trading programs in exchange for crude oil, including buying oil at preferential prices and even paying for the services of doctors abroad.

“Mexico has always supported Cuba and the countries of the Central American isthmus,” recalls Ignacio Martínez, an economist specializing in trade and a researcher at the National Autonomous University of Mexico (UNAM). “Mexico is not obliged to determine the sale of crude oil to this or that country based on an international price. That depends on each oil company. In this case, this is what the Mexican government is seeking in order not to harm its interests vis-à-vis Washington,” adds Martínez.

This will worsen Mexico’s financial situation, says Marroquín. The federal budget for next year envisages an increase in debt to 4.9% of gross domestic product (GDP). In this context, Marroquín asks: “The obligatory question is what is the most indebted parastatal oil company in the world doing to give away oil to another country when that same country next year will face the largest budget deficit in recent years? “Two decades?”

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