Mexican state-run oil company Pemex said on Monday it would put billions of dollars worth of projects on hold to help it cope with a financial squeeze caused by a prolonged decline in oil prices, which it expects to worsen in the near term.
Pemex has been battered by the oil price slump, and will soon faced increased competition at home as a major energy sector opening aimed at trying to reverse a decade-long slide in crude output takes hold.
The company expects no quick relief.
Chief Executive Officer José Antonio González Anaya told a conference call he saw international oil prices averaging around US$25 per barrel in 2016 - about US$10 below current levels.
Pemex aimed to save nearly 29 billion pesos (US$1.6 billion) via efficiencies and around 60 billion pesos through deferred investments, González told the call.
Some 46.8 billion pesos worth of projects would be suspended because they are not profitable at US$25 per barrel, he said.
Part of the deferrals involved 10 billion pesos worth of investment Pemex had lined up for deep water projects, he added.
"Pemex is facing a liquidity problem, not a solvency one. These adjustments retool and reconfigure Pemex in its new role as a productive state-run firm in the context of the energy reform," González said in his presentation for the call.
González, a former deputy finance minister and ex-head of the country's social security agency, took the helm earlier this month with orders to cut spending.
Pemex has suffered 11 consecutive years of declining crude output and a record US$10.2 billion loss in the third quarter of 2015.
The company's debt is set to exceed US$100 billion this year, while its credit rating was downgraded one notch by ratings agency Moody's in late November to its third-lowest investment grade.
Yet the company has had no problem accessing credit markets, as its latest bond issue in January was three and half times oversubscribed after officials said the government would prop up the firm if needed.