Petroleos Mexicanos’ (Pemex) plans last year included joint ventures and higher oil production. For 2016, that’s turned into job cuts and asset sales as it tries to weather the worst downturn in a generation.

In January 2014, chief executive officer Emilio Lozoya was optimistic about 2015. He expected the company’s first joint ventures would reverse nine straight years of declining output. Revenue from oil would rise, he said. This rosy outlook never materialised. Pemex is ending 2015 with total debt that’s set to surpass US$100bil and has accumulated US$22.4bil in quarterly losses this year. Instead of participating in joint ventures, the oil producer might instead sell off pieces.

“Pemex could consider the sale of any of its assets,” Nymia Almeida, senior credit officer at Moody’s Investors Service, said in a telephone interview from Mexico City. “The only thing that Pemex can’t sell are the oil reserves. Everything else is a possibility.”

Pemex has already divested its US$1.3bil stake in a natural gas pipeline and storage operator. It may also look for new operators for its six refineries and announced it will return some oil fields assigned to it by the government. Currently, it has no joint ventures to produce oil.

Last quarter, the company lost 34 billion pesos (US$2bil) from oil refining, Pemex transformation director Alejandro Martinez Sibaja said Dec 9. A day earlier, the Mexican government had announced US$23bil in investments to upgrade its plants – money set to come directly from private investors yet to be announced.

“There is nothing official yet,” interim chief financial officer Rodolfo Campos said in a phone interview Dec 23. “However, it is undoubtedly part of our plans.” Campos said the plan is to find partners for new projects such as reconfigurations of three refineries and have the new investors share profits with Pemex – not necessarily to sell stakes of existing plants.

“In general what we’re looking for is private capital to develop our business plan,” Campos said. The company has repeatedly said refining is no longer a profitable activity and hopes to bring on private partners to operate them. Bloomberg calculated the average utilisation rate among Pemex’s six refineries to be at 63%. That compares with over 91% for US plants this year.

The challenge might be to find anyone who wants a part of this business, according to Almeida. “There is interest in refining but much less,” she said. “It’s far more complicated and difficult, though it is a good moment for the industry because the crude prices are so low.”

A recently announced investment vehicle known as Fibra E could also free up some cash for the oil giant. Mexico’s government announced rule changes in September to allow companies to list shares through what are called master limited-partnerships, a popular format in the US that shelters profits from government taxes.

The new structure would allow the company to monetise part of its infrastructure while continuing to operate it. “We’ve been working on this for some time and the structure is being finalised,” Campos said. Pemex expected to make the first announcements on Fibra E in the first half of 2016, he said.

Another part of the restructure of the struggling company would include job cuts, Campos said. Pemex had more than 153,000 employees at the end of 2014, according to an annual report.

The company’s large payroll has also translated into the largest pension liabilities for any oil and gas company in the world. At US$91bil, it’s almost four times that of Exxon Mobil Corp, which has the second-biggest at US$24.4bil. Last month, Pemex reached an agreement with its union to restructure pension plans and free up capital to boost the state-owned producer’s falling production.

The company’s assets stretch far beyond refineries. “If Pemex was going to sell assets, the thing they could really do is a ‘sale and leaseback’ on their rigs,” Wilbur Matthews, chief executive officer of San Antonio-based Vaquero Global Investment, which oversees more than US$100mil in assets including Pemex bonds, said in a phone interview. “It would be a smart strategy for Pemex to try to sell assets to reduce their debt.” – Bloomberg