Restructuring / Turnaround Strategies Case Study

PEMEX: The Mexican Oil Giant's Restructuring Strategies

Abstract:
Petroleos Mexicanos (PEMEX) is the national oil company of Mexico, and seventh largest oil producer and tenth largest gas producer in the world. PEMEX accounts for one-third of the Mexican government's revenues and 7% of its export earnings. But due to rampant corruption, lack of investment and political exploitation, PEMEX started losing its financial stability since 2000, despite the record-high energy prices and increasing world appetite for oil. To revive its fortunes, in mid-2003, PEMEX implemented several restructuring strategies. But the company's future is still uncertain due to its falling output, increasing debt and costs.

Pedagogical Objectives:

• To provide insights into the troubles faced by PEMEX and the restructuring strategies undertaken to overcome them
• To discuss the efficacy of PEMEX’s restructuring strategies and its future.

Keywords : Petroleos Mexicanos (PEMEX); Restructuring strategies; Corruption, privatisation, liberalisation; Investment, joint venture, partnership; Reserve Replacement Ratio (RRR); Loss making debts and costs; Restructuring / Turnaround Strategies Case Study; Crude oil production refining transport; Natural gas, oil and gas reserves; Political posturing; Incompetent managers and poor decisions; Financial stability, lack of investment; Troubled times declining revenues; Mexico’s natural oil company; Taxation and economic reforms; Mexican debt crisis, Pemexgate