Mexico Hedges 2011 Oil Income At $63/Barrel Avg

Mexico Hedges 2011 Oil Income At $63/Barrel Avg
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Πεμ, 16 Δεκεμβρίου 2010 - 19:24
Mexico's government has purchased put options to hedge most of its 2011 oil revenue at an average price of $63 per barrel, the Finance Ministry said Wednesday.
Mexico's government has purchased put options to hedge most of its 2011 oil revenue at an average price of $63 per barrel, the Finance Ministry said Wednesday.

Income from oil produced by state-run monopoly Petroleos Mexicanos, or Pemex, typically provides about a third of
Mexico 's public-sector income. The revenue law for the 2011 budget assumes an average price of $65.40 a barrel for Mexican crude.

"The hedges acquired, along with resources from the Oil Stabilization Fund, will compensate for any drop in the oil price," the Finance Ministry said in a statement, noting that it bought the options on international financial markets.

The budget proposal sent to Congress by President Felipe Calderon had assumed Mexican oil would fetch $63 per barrel in 2011, but the Senate increased that price before signing off on the revenue portion of the budget.

Mexico hedged its 2010 oil revenue at an average price of $57 a barrel, paying $1.17 billion to buy the put options. The Finance Ministry didn't say how much it paid for the options this year.

The ministry added that it has pre-financed all of its upcoming debt payments for 2011 and 2012 after issuing debt six times on foreign markets this year to take advantage of low interest rates. Among this year's placements was a $1 billion century bond, the country's first ever, as well as euro- and yen-denominated bonds.

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