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Mexican state oil firm Pemex reports US$4b Q2 losses

Mexican oil company Pemex announced second-quarter losses of more than US$4 billion, as legislation to end the state firm's 75-year monopoly worked its way through Congress.

MEXICO CITY: Mexican oil company Pemex announced second-quarter losses of more than US$4 billion on Friday (25 July), as legislation to end the state firm's 75-year monopoly worked its way through Congress.

The company, which brings in more than one-third of the government's revenues, said the poor performance had been caused by tax increases and the slowing output of some of its assets.

The losses outstripped the US$3.7 billion negative result it registered in the same period last year.

Sales for the period from April to June increased four per cent from the same quarter last year to US$30 billion, Pemex said on its website.

But charges increased by 13 per cent because of rising operational expenses and production costs, it said.

It was the latest in a string of negative results for the company.

In the first quarter, it reported losses of more than US$2.8 billion.

And for 2013 it had annual losses of US$12.8 billion, after turning a US$200-million profit in 2012.

Pemex, the world's seventh-largest oil producer, has had exclusive rights to Mexico's energy resources since it was founded in 1938, but has struggled to modernize its production.

The firm has suffered a sharp decline in output in recent years, from 3.4 million barrels a day a decade ago to 2.5 million today (25 July).

That slide has prompted President Enrique Pena Nieto's government to push a sweeping overhaul of the energy sector that would strip Pemex of its monopoly and open up the oil and gas industries to foreign investment.

The government hopes the reforms will bring in cash to increase production, expand refining capacity and drill for shale gas and deep-water oil deposits, areas where Pemex has made few inroads.

On Monday (21 July) the Mexican Senate passed the last of four packages that would end Pemex's monopoly.

The legislation is now before the Chamber of Deputies.

The leftist opposition has so far proved powerless to stop the reforms, but is pushing for a referendum on the issue.

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