Pemex Moves to 2026 with Operational Challenges, Maintains Government Backing

Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)

---

Summary

Pemex's fails to stop production declines as it receives financial government support. Meanwhile, the Dos Bocas refinery fails to reach full capacity.

---

Pemex Struggles with Production, Refining

Pemex, the Mexican state company, continues to face structural production challenges and is struggling to reach full processing capacity at Dos Bocas. However, the government of Claudia Sheinbaum continues to back the company.

Oil production has remained a key challenge. From January through October, Pemex maintained oil production of 1.61 million barrels per day (BBL/d) of crude oil, according to Pemex's institutional database.

Including liquid hydrocarbons obtained through processing gas, a nomenclature added to Pemex's monthly reports, production would reach 1.75 million BBL/d during that same period.

In reality, however, Pemex has been struggling to stop production declines for over two decades due in part to maturing oil fields. Pemex recorded highs of 3.4 million BBL/d in 2004.

The previous government of Andres Manuel Lopez Obrador briefly stabilized oil production, starting at 1.70 million BBL/d in 2020 and rising to 1.87 million BBL/d in 2023.

Sheinbaum wants to leverage private investment into Pemex's operations to maintain production at 1.8 million BBL/d during her term, which ends in 2030. In related news, the state company awarded its first mixed contracts with C5M, Geolis, CESIGSA and Petrolera Miahupan for the development of five assets, Reuters reported. Only five of 11 planned contracts were awarded.

The absence of major international oil companies sheds light on the lack of desire to work with Pemex.

Downstream Setbacks

In the downstream sector, the company has also struggled to reach full processing capacity at its 340,000-BBL/d Dos Bocas Olmeca refinery. Initially representing a new start for Pemex's downstream, the asset has processed 118,000 BBL/d from January to October, according to Pemex's data. The best operational month was September, when it reached 195,000 BBL/d.

The new refinery has been affected by delays and operational failures, which have impacted its operations.

Combining crude processing rates of the remaining six Pemex refineries in Mexico, the company reached a pace of 983,000 BBL/d, less than 50% of its 1.98 million BBL/d domestic capacity.

With processing rates from its domestic refineries rising, Pemex's crude exports are expected to keep shrinking. The United States, Mexico's largest importer, has seen its crude and petroleum products imports drop from 1.66 million BBL/d in 2004 to 626,000 BBL/d in 2024, according to the U.S. Energy Information Administration. Between January and September this year, flows have been even lower at 502,000 BBL/d.

Government Backing

Despite the operational situation, Sheinbaum's government has supported Pemex and is expected to continue doing so. Earlier this year, the Mexican Ministry of Finance backed Pemex's financing package, including a bond buyback of US$12 billion and its issuance of bonds for US$13.8 billion.

In the past, the previous administration also granted tax cuts to Pemex to alleviate its financial burdens. Still, by the end of the third quarter, Pemex's debt stood at US$100 billion.

Key Takeaways

• Pemex's crude production between January and October was at 1.61 million BBL/d.
• Only five of the 11 mixed production contracts were awarded, according to Reuters.
• The Olmeca refinery has processed crude at a pace of 118,000 BBL/d so far this year.

---

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).