ravenhawk10 t1_j8jwt6d wrote on February 14, 2023 at 9:14 PM

Reply to comment by studude765 in [OC] New Mexico Now Produces More Oil Than Mexico & Venezuela by latinometrics

My point was that they have managed to operate successfully well before their IPO and associated reporting requirements. They seem to be following best practices and hiring professionals for operations. Then again, aren't these professionals essentially government employees?
Regarding the BOD, do note there are two government ministers sitting on the BOD. The BOD must retain a close relationship with the government, as the government is its only shareholder that matters. The government also has a big impact on the company's profits as its responsible for OPEC negotiations.

studude765 t1_j8nmryx wrote on February 15, 2023 at 5:15 PM

>My point was that they have managed to operate successfully well before their IPO and associated reporting requirements.

They were profitable, but were they as profitable as they could have been? Did they generate as high of an ROIC as they could have? Also the fundamental difference in Saudi Aramco and Venezuela's oil company is that Saudi Aramco is run as a business with little to no direction from the Saudi family (though they do enjoy all of the dividend benefits)...in Venezuela the government directly makes business decisions for the oil company and that has led to poor capital allocation decisions...this is also somewhat true for PEMEX as well.

>They seem to be following best practices and hiring professionals for operations. Then again, aren't these professionals essentially government employees?

Again, the company does not get directly dictated what to do by the government, as does tend to happen in Venezuela and somewhat with PEMEX as well.

>Regarding the BOD, do note there are two government ministers sitting on the BOD.

Out of how many BOD members though? with Venezuela you have pretty much 100% government control and with PEMEX still more government control than 2 BOD members.