Energy Secretary Pedro Joaquin Coldwell said this week that no layoffs were expected as part of the sector opening, but analysts said they thought such remarks aimed to avoid antagonizing the union during debate on the proposal.
“To get anything close to what they ended up proposing, they had to have the union on board,” said Jeremy Martin, the director of the energy program at the Institute of the Americas, a La Jolla, Calif., body that promotes regional cooperation.
Inevitably, experts said, Pemex will have to slim down its payroll.
“The challenge is: How do you keep your top talent and shed people who are dead weight?” Padilla said. As global companies enter Mexico, recruiters will shop for Mexican engineers. “They’ll be extremely valuable in the private sector.”
Among the structural problems Pemex faces, in addition to seeing the central government siphon off its cash, are massive unfunded pension liabilities, which the Research Center for Development has estimated at $104 billion.
“It’s about 10 percent of Mexico’s GDP, or one year’s worth of gross revenues of Pemex,” Padilla said.
Pemex employees, a league apart among Mexican government workers, contribute nothing to their pension plans. They retire after 30 years of service, receiving 100 percent or more of their final salaries until the day they die. Many begin working in the fields at age 18.
The union boss at Pemex, Carlos Romero Deschamps, has assets to match his power, including a massive yacht, waterfront condominiums for his children and him in Cancun and Miami, and a gold Swiss Audemars Piguet wristwatch worth the annual salary of many Pemex employees. His daughter posted Facebook photos last year of her trip to Europe. She and her three pet English bulldogs – Keiko, Boli and Morgancita – stayed in some of Europe’s most expensive hotels.
Corruption is also a problem in the upper ranks of Pemex. Dozens of managers have been sanctioned or have open cases against them for kickbacks or rigging bids, especially in the overseas trading division, according to the company’s latest annual report to the U.S. Securities and Exchange Commission.
If Mexico’s Congress approves the plan to open the doors to foreign oil companies partnering with Pemex to explore for and produce oil, the company will be forced to adopt greater global efficiencies and practices, analysts said.
“Partnerships of Pemex with international oil companies will help to curb corruption,” Pardinas said. “It’s going to be a very complicated process inside the company.”
A massive explosion ripped through the Pemex headquarters Jan. 31, killing 37 people. Some Mexicans questioned whether a probe exploring the cause of the blast could be believed. That distrust has come to symbolize the opacity of the company. It took investigators six months to cite a buildup of gas and to declare definitively that no foul play was involved.
Pena Nieto seems to have one eye fixed on strategies to clean up the company. One key aspect of the reorganization, he said this week, would be to improve “conditions of transparency and accountability” in Pemex.
Even as Pena Nieto’s team has yet to show its full hand on plans for the company, the problems Pemex confronts put the company in a weak position to resist change.
“There hasn’t been another (national oil company) that’s walked into . . . a situation like this in such a weakened state,” Padilla said. When Brazil and Colombia overhauled their state oil companies in decades past, the companies “were not burdened with the kind of debt or obligations that Pemex has right now.”