Mexico’s government hedged oil exports for next year at an average $49/bbl, locking in protection against low crude prices, the nation’s Finance Ministry said.

Mexico spent $1.09 billion for the put options, which give it the right to sell 212 MMbbl at the hedged prices, the ministry said on its website. The ministry said the options, purchased in 44 transactions between June 9 and Aug. 14, will cover the portion of next year’s budget that is vulnerable to lower crude prices. The government is due to send its full budget proposal to Congress by Sept. 8.

The price Mexico negotiated for 2016 is 36% lower than the $76.40/bbl hedge obtained for this year, reflecting a Mexican Maya crude mix that has fallen 58% in the past year. Bloomberg reported last month that Mexico had begun the annual program.

Mexico has annually hedged about 200 MMbbl over the past several years. Finance Minister Luis Videgaray said in April that the country planned to hedge exports again for 2016.

“Certainly, it will not be a hedge at the price we were able to get for this year’s hedge, but we’ll take what the market gives us,” Videgaray said in an interview at the time.

The government, which depends on oil for about a third of its revenue, paid $773 million for its 2015 hedges.

Source: - Mexico Bloomberg - World Oil -