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LatinNews Daily - 17 July 2019

In brief: New plan for Pemex in Mexico

* The general director of Mexico’s state-owned oil company Petróleos Mexicanos (Pemex), Octavio Romero, has unveiled a new business plan for 2019-2023 to address the company’s high tax burden, debt and low investment, focusing on low-cost and easy to access on-shore and shallow water fields. Romero has vowed that the plan will raise Pemex's production and improve its financial balance for 2021. He states that the main objective is to get the federal government to support Pemex in the first three years in the transition process, “so that later it will be Pemex which supports the government to finance the development and economic growth of the country”. He announced that a fiscal benefit in the payment of oil production rights should generate some M$30bn (US$1.57bn) for the company this year. He added that the federal government also plans to reduce Pemex’s taxes and duties by seven percentage points in 2020 and four percentage points in 2021, bringing its current tax rate of 65% down to 54% in 2021. The announcement of the new plan failed to reassure the markets however; on 16 July the peso fell by 0.4%.