Next year, and for the first time in its history, Pemex will receive more public resources than it generates, reversing a historical trend and its vocation as a state oil company. Claudia Sheinbaum’s government hastily implemented an ambitious plan to revive hydrocarbon production, involving large injections of resources and attracting private investors to help save and operate the wells. However, the “company of all Mexicans” has not yet managed to ensure the long-awaited recovery.
This year the Executive presented a proposal to attract operators to inactive and complex fields from a technical point of view, albeit with a certain level of prospecting, through mixed development contracts: associations with Pemex, which must maintain at least 40% control. However, the offer is proving to be a tough sell. Only a dozen companies have confirmed their interest in the face of what oil industry sources describe as deals tilted disproportionately in Pemex’s favor. The scheme stipulates that private individuals must shoulder the entire investment, although the oil company will receive a portion of the profits as the majority shareholder. In addition, there are tax obligations for companies of up to 30% of the proceeds from the exploitation of crude oil and 12% of gas, in addition to regular taxes for exploration and production destined for the United States, a person with access to the proposal explained to EL PAÍS. Víctor Rodríguez, general director of the oil company, also recently admitted that the terms of remuneration are being reviewed, with the aim of setting them by the end of the year.
“You need to have a great appetite for risk to enter these companies, because Pemex essentially says: invest, come and produce, save the well and once active I will pay you”, said the person who asked to reserve his name due to his relations with the Public Administration.
Additionally, the Secretariats of Energy and Finance are promoting a strategy to reactivate and improve the productivity of around 400 wells with the support of private utility companies, many of which may have to accept less favorable terms to ensure the state company corrects outstanding bills. Pemex recorded red numbers – albeit with smaller losses – in the third quarter of the year, with a debt balance towards suppliers 37% higher than the previous year, rising to $28 billion. This figure is expected to reduce in the next quarter thanks to the activation of a fund at a state bank which has started to make some disbursements, essential to avoid declines. The country reports pumping 1.6 million barrels per day of crude oil and condensate.
And while the complexities of hydrocarbon production and the finances of oil companies have remained a topic for energy experts, their relationship with the pockets of Mexicans has never been more palpable than now. “The fact that Pemex contributes less and less, or even no longer contributes, to the public finances for the following year, implies that the fiscal effort that taxpayers, as well as companies, are making has no direct impact on improving public services. It collects more and more, but this will not finance more spending on health, education, security, welfare, but rather will provide financing for Pemex to remain solvent or even to pay the federal government’s debt and that of Pemex. This it is the critical point to take into consideration,” says Jorge Cano, a researcher at México Evalúa, a center that analyzes public policies.
His statement comes from analysis of the 2026 Economic Package, which increases tax revenues by 5.8 trillion pesos, supported by tightened supervision in a context of very modest economic growth. In a context in which neither video games nor Coca-Cola will be able to avoid tax increases, budgets project that each taxpayer will pay an average of 2,000 pesos more in taxes than in 2025, with most of that amount going to tax aid for Pemex.
Growing markets
The Mexican president says he is thinking long-term with his 10-year bailout plan. Pemex’s decline has been underway for decades and is linked to its quasi-monopolistic nature, which reduces its agility. In 2014, the government of Enrique Peña Nieto attempted an energy sector reform that for the first time included the participation of private oil companies such as Shell or BP. On paper, the framework would help modernize the “white elephant,” but even then it met significant resistance. Finally, in 2018, with the triumph of Andrés López Obrador, the reform was destroyed and replaced by a policy of “energy sovereignty” that privileges Pemex’s power over the entire hydrocarbon chain, a decision that was also criticized by the United States, Mexico’s main trading partner with large interests in the energy sector.
Sheinbaum, true to his pragmatic style, seems to lean towards a middle ground between the policies of his predecessors. Despite having shown openness to private capital, the country is far from oil liberalization. He didn’t even adopt the model of joint ventures –joint investments between companies– that other state-owned companies use to make their operations more efficient.
“In the Mexican model, the partner is subject to a government that tells you every day that Pemex comes first, that decides who and how it will operate,” summarizes Rosanety Barrios, an independent energy sector analyst. Barrios objects that the policy of direct appropriations by the public treasury, which already exceeds 20 billion dollars a year, together with the enormous debt issuance and buyback, is what the company – and the taxpayers – really need.
“Preference is given to an inefficient company, and without creating incentives for it to be efficient, freeing it from competition regulation, establishing asymmetric regulation for anyone who may be interested in participating in the same market, reducing its tax obligations and also imposing price controls for the sale of gasoline. This is appease inefficiency and pay the costs,” he abandons.
However, the government managed to gain some advantages in the process. According to a count of BloombergThis year alone, Mexico has issued at least $41 billion in bonds, in part to help the oil company’s $100 billion debt. This assistance was interpreted by risk rating agencies as proactive management of public debt, which improved their credit perception. 10-year government bonds have rallied close to 2% over the past month, while Pemex’s benchmark bond, due in 2027, has gained nearly 7% of its value in three months.
“There was no possibility in the Head of any Government defaultear to Pemex (fall into debt default). So we, as Mexicans, have no choice but to pay the dues, because the company has no possibility of refinancing,” concludes the expert.
