Mexico’s state oil company Pemex posted a $2.12 billion quarterly loss as crude production plummeted to its lowest level in nearly five decades, deepening a financial crisis at the world’s most indebted energy company.
Current oil output stands at 1.71 million barrels per day as of February, the lowest since 1979, while January exports by Pemex fell 44% from the previous year to 532,404 barrels daily — the weakest monthly total since recordkeeping began in 1990.
The company posted the quarterly loss while its debt burden grew to $101.1 billion, amid an 11.3% drop in crude and condensate output. Pemex received $3.9 billion in government support during the first quarter, funds primarily used to pay down debt.
President Claudia Sheinbaum pledged to raise oil production to 1.8 million barrels per day, but the company faces headwinds from aging oil fields and delayed supplier payments that have disrupted operations.
Pemex faces $9 billion in bond obligations in 2025, part of a debt burden that has grown from $97.6 billion in late 2024. The company received $3.9 billion in government support during the first quarter alone.
“Pemex’s issues with debt payments to suppliers aggravated the whole picture as the company was already struggling with aging fields,” Joao Lopes, a senior downstream analyst with S&P Global, told Bloomberg. “The lack of significant new discoveries also casts a shadow over long-term production.”
Recent data shows exports dropped further to 529,000 barrels per day in June, according to shipping reports, as Mexico diverts more crude to domestic refineries in pursuit of energy self-sufficiency.
The company has delayed roughly $20 billion in payments to suppliers, leading to contract suspensions and protests in oil-dependent towns. These payment delays have hampered drilling operations and maintenance work, creating operational setbacks.
Pemex’s domestic refineries handled 936,000 barrels daily in the first quarter, a 5% decline from the same period last year. Revenue dropped 395.59 billion pesos during the January-March period due to lower crude oil sales volumes.
The debt crisis reflects deeper structural challenges in Mexico’s oil sector. The country’s confirmed oil reserves dropped from more than 10 billion barrels in 2014 to under 6 billion barrels by 2023, according to industry data.
The decline stems largely from the depletion of the giant Cantarell field in the Gulf of Mexico, which peaked at 3.9 million barrels per day in 2004. The most recent EIA data says that more than 80% of Mexico’s remaining reserves are located in the Sureste Basin.
Recent discoveries have failed to offset the natural decline. The Zama oil field, with an estimated 800 million barrels, represents a significant find but falls short of the scale needed to reverse production trends.
Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
One Response
‘Gulf of Mexico’? Bet you still say ‘dainty’, too…