MOSCOW (MRC) -- Mexican state energy producer Pemex reported a smaller Q3 comprehensive loss because of a decline in pension costs as well as favourable exchange rates and a rise in income from financial derivatives, said producer.
The three were more than enough to offset a decline in revenue, which fell faster than costs. The following table shows the financial performance of the company.
If pensions and conversion effects are excluded, then Pemex would have reported a Q3 net income of Ps1.41bn, up from a net loss of Ps87.9bn. The conversion effects lower the value of Pemex's peso investments in subsidiary companies. Although Pemex reported a net income under this measure, its gross profit still fell by 44%, reflecting a drop in sales.
Revenue fell because of a drop in oil exports caused by the coronavirus and a decline in global prices for hydrocarbons. Oil production fell because a collision with the Olympic Future tanker triggered an emergency shutdown in Pemex's floating production, storage, and offloading (FPSO) system.
The shutdown lowered oil production by 59,000 bbl/day in July. In August, oil production fell by 9,000 bbl/day because of what Pemex called a sanitary contingency that was caused by the coronavirus.
Oil production is important for Mexico's petrochemical industry because its crackers rely on ethane as a feedstock for its crackers. The majority of Mexico's ethane is extracted from the associated gas produced from its oil wells.
Third-quarter production of ethane and other natural gas liquids (NGLs) fell to 208,000 bbl/day, the lowest since at least the third quarter of 2008. For comparison, Pemex produced nearly 400,000 bbl/day in 2010.
Because Mexico relies so heavily on ethane as a feedstock for its crackers, it is especially dependent on refineries to provide its petrochemical industry with domestic sources of propylene, benzene, toluene and mixed xylenes (MX).
As MRC informed earlier, Pemex is advancing a refinery rehabilitation program that will enable it to process 1.2 million b/d of crude oil by the end of 2020 and evaluating a reconfiguration of its petrochemical facility at Cangrejera, Mexico, into what would be its eighth refinery.
We also remind that in 2016, Pemex shut its steam cracker at its Cangrejera complex for maintenance on February 15. The cracker was idle for about 14 days. The conducted repairs at the cracker were a part of planned maintenance.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
MRC