Pemex profits at risk due to clean energy push – El Sol de México

DUBAI. Some 28 petrostates, including Mexico with Pemex, risk losing more than half of their expected revenue from fossil fuels by 2040 as the energy transition progresses, with a drop in prices that will leave a significant hole in public finances, published by the organization Carbon Tracker.

Pemex (Mexico), Roseneft (Russia) and Ecopetrol (Colombia) are expected to suffer the largest revenue losses, as 50 percent or more of new projects are “unnecessary in a moderate transition,” according to the study of the organism.

You may be interested: The US has a solid case against Mexico for energy controversy

Currently, Pemex reported a net profit for the second consecutive year in the first nine months of the year. Between January and September 2023, the oil company had a profit of three billion pesos. This gain is 98.5 percent lower than that observed in the same period of 2022 (195.6 billion pesos). Only in the July-September period, the company had a loss of 79.1 billion pesos.

Governments and businesses may be planning for “a slow transition and anticipating flat investments,” but even a moderately paced energy transition could have a “dramatic” impact on their finances, according to the London-based organization.

He added that by 2040, oil and gas revenues from 40 oil-producing countries could go from the planned $17 trillion to just $9 trillion in a transition compatible with limiting global warming to 1.8 oC.

This report, published during the second day of the COP28 Climate Summit in Dubai, predicts that demand for oil and gas will increasingly decline towards the end of the decade, and that the fall in prices will be worsened by the excess supply.

For this reason, the organization, which has specialists who specialize in climate risk in financial markets, warns that, in many producing countries, this will leave “a significant hole in public finances, limiting their ability to provide public services and threatening the stability”.

The United Arab Emirates (UAE) relies on oil and gas for 40 percent of government revenue, but production revenue could be 60 percent lower than expected, a similar situation to Saudi Arabia, the largest oil exporter in the world.

At least six African states are very vulnerable, with more than 60% of their total budget at risk: Nigeria, with 215 million inhabitants, Angola, Chad, Congo, Equatorial Guinea and Gabon.

But one of the “highest risk” countries, according to Carbon Tracker, is Venezuela given that public finances depend “totally on oil and gas revenues, and these could be more than 80 percent lower than expected.” .

LEADERS INTERVENE

A host of world political leaders spoke at the climate summit from the lectern in the main auditorium with promises of financial support for the newly created loss and damage fund.

Many, like Spanish Prime Minister Pedro Sánchez, promised money for the loss and damage fund, $21.7 million. For her part, the Italian president Giorgia Meloni raised the figure to 109 million dollars.

The European Union called for greater global ambition against the climate crisis and asked to “reduce as soon as possible” CO2 emissions, which must decrease from 2025.

➡️ Subscribe to our Newsletter and receive the most relevant notes in your email

At COP28, Chile and Germany launched the Climate Club, an intergovernmental body to accelerate compliance with the objectives established in the Paris Agreement.

The program proposes mechanisms that help achieve climate neutrality in 2050 by appealing to “a radical change” in decarbonization, especially in the industrial sectors that are most difficult to abandon, starting with steel and cement, the Ministry of Foreign Affairs pointed out.

2023-12-02 08:00:00
#Pemex #profits #risk #due #clean #energy #push #Sol #México