Updated 03:14 AM EDT, Thu, Oct 28, 2021

Plummeting Oil Prices Persuades New CEO of Mexico Oil Giant Pemex to Reorganize the Company

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Mexican oil giant Petroleos Mexicanos, or Pemex, is facing reorganization now that a CEO has been put into place.

José Antonio González Anaya, an expert in Mexico's finance, has replaced Emilio Lozoya Austin as the company's CEO, according to Forbes. Lozoya Austin was named CEO in 2012 to supervise the historic reform that ended 76 years of the country's oil monopoly.

In his announcement held in Mexico City, President Enrique Peña Nieto said that the state-owned firm will undergo plenty of changes under the new management.

"I've given instructions to the new director to make the efficiency and profitability of all Pemex's activities his top priority, with an emphasis on its international competitiveness," the Mexican leader said, as quoted in Forbes' report. "It will be necessary to adjust the cost structure, revise the spending program and strengthen the investment processes, making use of the new joint venture and investment schemes provided by the energy reform."

Mexico's Central Bank and the Ministry of Finance, also known as the SHCP, have raised concerns over Pemex's spending and urged Peña Nieto to order reorganization for the firm, the news outlet added.

Mexico's energy reform in 2014 have opened Pemex to private investment and was considered by international investors as the most significant reform over the past decades, Forbes wrote. However, this achievement has not stopped the company from suffering through one of its worst crises as falling international oil prices and high debt plague the country.

Pemex has also faced corruption scandals involving the trade union, as well as allegations of fraud, Forbes noted.

Finance Minister Luis Videgaray said on Monday that there will be budget cuts in Pemex's future. However, Duncan Wood, director of the Woodrow Wilson International Center's Mexico Institute, argued that the oil company will not go through severe changes and that people "will see more of the same" but with "closer coordination with SHCP," the news outlet further reported.

Wood said that González Anaya's background of "effective administrator and technocrat" makes him an "interesting choice" as Pemex's CEO, Forbes added.

He continued, "I expect that coordination with [Mexican Finance Minister] Videgaray will be eased by this move, but there will be some of the same issues that Lozoya had to deal with-he is not an 'energy man' and Pemex's bureaucracy will likely resist his leadership."

Pemex funds majority of the Mexican government's budget through taxes and direct payments, according to Forbes. In the third quarter of 2015, the company lost $10.2 billion, which is almost three times worse than the same period in 2014. Central Bank Governor Agustin Carstens said that Mexico will likely face low oil prices next year as well.

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