Mexican President Carlos Salinas de Gortari soon will send a legislative proposal to Congress that splits state owned Petroleos Mexicanos into four subsidiaries.
Pemex functions will be divided into Pemex Exploration & Production, Pemex Refining, Pemex Gas & Basic Petrochemicals, and Pemex Secondary Chemicals. An earlier report said the company would be split into seven units (OGJ, June 15, Newsletter).
Each of the four new operating companies will be an independent business unit with a separate board of directors and its own staff and support functions.
The Mexican government said, "The companies' commercial and financial transactions will be conducted on an arm's length basis, including transaction with sister companies, to ensure financial accountability.
"Pemex itself will provide strategic direction and overall management for the group, including operations, setting functional guidelines, allocating resources, and managing the overall capital structure of the group.
"The government will provide input and control over Pemex's operations through its current representation on the Pemex board of directors, plus its appointment of directors to the boards of the newly formed operating subsidiaries."
WHO IS TO DO WHAT
Under the plan, Pemex Exploration & Production will manage all E&P activities in Mexico as well as all field gathering pipelines and crude export facilities.
Pemex Refining will handle supply and marketing of all refined products in Mexico. It will own and operate Pemex's six refineries, more than 85 refined products distribution terminals, and all crude and products pipelines.
Pemex Gas & Basic Petrochemicals will manage supply and marketing of LPG, natural gas, and basic petrochemicals in Mexico. It will own and operate Pemex's gas processing plants, LPG pipelines and distribution terminals, natural gas transmission pipelines, and all basic petrochemical plants.
Pemex Secondary Petrochemicals will own and operate all of Pemex's chemical units that are not part of the activities exclusively reserved to the state and will market their products to Mexico's private sector.
Pemex International, the international products market representative since 1989, will continue to manage foreign holdings, market crude oil exports, and manage natural gas, oil products, and chemicals activities.
PEMEX GOALS
Pemex said the restructuring will explicitly focus Pemex management on economic, value oriented objectives instead of the historical focus on volumetric or self-sufficiency goals."
The changes will "increase management's accountability for Pemex's economic performance and for the satisfaction of Pemex's obligations to consumers, the public, and its workers, such as compliance with all environmental and safety regulations.
"And (they will) improve responsiveness of Pemex to its customers and the general public."
Pemex stressed the restructuring will not affect its existing contractual obligations.
The government said, "Pemex and the government reaffirmed Mexico's sovereignty over its hydrocarbon reserves. Pemex and its new subsidiaries will continue to be wholly owned by the state and operate within the current basic legal framework. Their scope is defined in terms of the constitutional mandate regarding oil industry activities."
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