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Latin America’s state-run oil giants are struggling

[2019.07.12, Fri 01:18] Five years after the oil price crashed, output remains depressed in much of the region, even as the industry as a whole faces unprecedented disruption. In Guyana, the region's youngest petrostate, production is about to boom following a discovery in 2015 by ExxonMobil, but the country has yet to create its own oil company. As oil prices plummeted, Latin America's oil companies racked up long-term liabilities of more than $400bn, or 8.5% of their countries' combined GDP, according to data from the Natural Resource Governance Institute, a think-tank. Between August 2014 and February 2016 the company's market capitalisation shrivelled by $115bn, or 80%. Only some of that was down to the collapsing oil price; ExxonMobil's stock dipped by 18% in the period. The government rushed to calm the market, announcing the auction of several oil refineries and a price increase only slightly lower than planned. Pemex has overtaken Petrobras as the world's most indebted oil company, with long-term liabilities equivalent to 15% of Mexico's GDP. On June 6th Fitch Ratings stripped it of its investment grade. Even the world's oil colossus, Saudi Aramco, is making a bet on petrochemicals and refining, demand for which should remain robust even if a global carbon price one day depressed that for crude. Google the news >>

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