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Private oil companies that partner with Mexico’s state-owned Pemex will be taxed at rates similar to those in Brazil and Colombia, according to a Mexican government official.

Brazil’s Petrobras paid $17.91 dollars a barrel for its crude production during the first half of 2013.

The new tax legislation in Mexico will be introduced in early September.

With new production taxes on foreign partners, Mexico will reduce oil-drilling royalties paid by Pemex, according to finance official Miguel Messmacher.

Pemex is the world’s fifth-largest crude oil producer.

It’s had nine consecutive years of output declines.

Oil production accounts for about a third of Mexico’s budget.

Finance Minister Luis Videgaray said it’s time to give Pemex a new tax regime. A decision would be made whether the largest remaining resources are reinvested in the company or if a part is transferred to the Treasury as a dividend.

Source: Bloomberg