Pemex must trim executive perks - lawmaker

Pemex must apply austerity measures to the perks and privileges afforded its executives amid falling oil prices, output and revenue, according to an opposition senator.

In the wake of its 62bn-peso (US$4.16bn) 2015 budget cut, the slump in oil prices and falling oil production, which has led to declining oil revenue for the country, the state oil firm must adopt austerity measures to cut costs, according to PAN party senator Francisco Búrquez Valenzuela.

The original 540bn-peso budget was based on an average oil price of US$79/b, a third of which was to be channeled to operations, salaries and pensions; and two thirds, or 366bn pesos, to investments.

Mexico's oil revenue declined by 46% in the first two months of the year due to falling output, lower exports and the slump in global prices, the finance ministry (SHCP) reported in late March. Oil prices have fallen 53% since June 2014.

Pemex's expenditure in January-February totaled 116.6bn pesos, up from 96.4bn pesos in the same period of 2014.

Last year, the state-run firm spent 6.3mn pesos on credit cards for 92 of its executives, Búrquez Valenzuela said, citing media reports. The total number of cards issued by the firm to executives in the corporate, refining, petrochemicals, E&P and internal departments was reportedly 108.

Since the budget cut, Pemex has announced a series of belt-tightening measure. The company has said its workforce could shrink by around 24,000, mainly through the early retirement of staff over the age of 55 or with more than 25 years' experience in the firm.

However, the firm's outlay for executives has increased 56.7% since 2011 to 1.03bn pesos, despite the number of posts increasing by just 50, or 12%, according to El Economista newspaper. The firm's CEO received a 35% pay hike in 2012 to 3.18mn (US$208,669) from a 2.34mn-peso annual salary in 2011.

The senator's proposal has been submitted to the upper house's energy commission.

BNamericas will host its 3rd Mexico Oil & Gas Summit on April 15-16, and its 3rd Mexico Electric Power Summit on May 13-14, both in Mexico City.