Fitch Ratings announced a revision of its credit rating on Petróleos Mexicanos (Pemex), lowering it to B+ from BB-.
This decision is due to operational struggles and significant financial demands the state-run firm is experiencing.
Fitch also put the rating on negative watch, expressing uncertainty about the Mexican government’s ability to enhance Pemex’s liquidity and capital structure within the next two years without creditors’ concessions.
Fitch anticipates Pemex will increase its financial liability for the government over the rating period.
Additionally, the rating reflects environmental and social consequences from numerous accidents at Pemex’s facilities since February 2023.
These accidents, which caused casualties, injuries, and damage to vital infrastructure, raise questions about operational management and infrastructure maintenance.
Pemex’s financial state has worsened recently due to continual funds transfers to the Mexican government amid declining crude oil production.
This situation has led to potential downgrade threats from global rating agencies if the company’s financial situation doesn’t improve.