Mexico’s President Andres Manuel Lopez Obrador announced to raise state-owned oil company Petroleos Mexicanos’ (Pemex’s) 2022 spending plan to $32bn, in a move to boost oil production. The budget proposal sees an increase of 17% in operational spending and 26% in exploration and production investment, to which $18bn will be allocated. The Finance Ministry estimates that Pemex’s oil production will reach 1.826mn barrels a day in 2022, up 4.2% YTD.

Additionally, the government decreased Pemex’s profit-sharing duty to 40% for 2022 from 54% in 2021. Mexico also began a debt refinancing process of Pemex after receiving around $12bn from the International Monetary Fund (IMF). Pemex set the objective to end this year with a daily production average of 1.8mn barrels, up from an average of 1.685mn barrels a day with partners in the first two quarters of this year.

Pemex´s dollar bonds were trading stable with its 6.625% 2035 trading at 99.355, yielding 6.7%.

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