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Mexico Plans $6 Billion Support for Pemex From 2025 Budget
Mexico’s government is considering carving out $6 billion from the 2025 budget to support the near-term debt obligations of its heavily indebted state oil giant Pemex, Bloomberg reports, citing sources with knowledge of the plans.
The government is expected to unveil its draft 2025 budget later this week.
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Mexico’s new President Claudia Sheinbaum has vowed to continue supporting the world’s most indebted oil company as her predecessor, Andres Manuel Lopez Obrador, did.
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Pemex has around $9 billion in debt maturing next year, and another $13 billion in debt obligations in 2026, which will see peak maturities on the company’s debt. Pemex’s total debt is about $100 billion.
The former president, Lopez Obrador, attempted – and failed – to turn the fortunes of the state oil giant.
Pemex’s oil production continued to drop under Lopez Obrador, despite his insistence and preference for stronger government support for the national oil company.
Despite Lopez Obrador’s efforts, the state firm’s oil production has been falling. Crude oil output averaged below 1.5 million barrels per day (bpd) in August, as Pemex’s crude production has hit this year the lowest level in more than 40 years. Mexico’s crude oil output peaked at about 3.4 million bpd 20 years ago.
Pemex now plans to raise its oil and gas reserves, including via intensified deepwater exploration and the creation of new business models to attract outside investments.
Last month, Mexico moved to give the president, who is now Sheinbaum, more control over Pemex and the country’s power utility, CFE.
Sheinbaum has vowed to continue the policy of government support to the state oil firm.
But continued support for Pemex remains a key challenge for Mexico’s new administration, Fitch Ratings said after Sheinbaum won the presidential election in June.
“Pemex’s debt, equivalent to almost 6% of GDP, remains a material contingent liability for the sovereign,” the credit rating agency noted.
By Tsvetana Paraskova for Oilprice.com
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