S&P: Pemex unchanged

Standard & Poor's said the changes to Pemex Exploracion y Produccion's (PEP) tax regime that were recently approved by the Mexican Congress do not merit a change in Petroleos Mexicanos' (Pemex; local currency A-/stable, foreign currency: BBB/stable) ratings or outlook.

"The bill is subject to President Fox's signature and would go into effect in January 2006. In our opinion, the bill will not make a significant impact on the issuer's short-term financial and operating performance. Nevertheless, we view it as an encouraging sign that the Mexican political leadership is recognizing the long-term issues faced by Pemex," said S&P credit analyst Jose Coballasi.

The proposal approved by the lower house could lead to $2 billion per year in additional resources, at current oil prices and production, for Pemex relative to the existing tax regime, S&P added.

The new tax regime is also designed to maintain current government revenues in the case of a downside scenario in oil prices, but should allow Pemex to increase its investment program in times of high oil prices, the agency said.

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