Pemex: model, it is destiny

This August 5 (2025), President Claudia Sheinbaum will mark the financial destiny of her government.

He will present the Strategic Plan for the Strengthening of Petróleos Mexicanos 2025-2035.

He will outline the roadmap for Pemex's next decade.

Not only the fate of the oil company, but also the country's public and financial resources will depend on its design.

This is no exaggeration. The Mexican government's credit rating and its greater or lesser scope for fiscal action depend on the proposed operating and financial model and its success or failure.

The context is very clear.

The radical change that led from the imminent opening to national and international private investment to a mixed contract system with majority government participation.

From deepwater oil exploration and exploitation to a focus on onshore and shallow water reservoirs.

During López Obrador's six-year term, the refining model was prioritized, with the aim of achieving fuel self-sufficiency.

The results of the previous government reflect a critical condition at Pemex.

Pemex remains the most indebted oil company in the world.

Its gross financial debt, although reduced, amounts to $98.8 billion as of the second quarter of this year.

Supplier debt is $22.8 billion by the first half of 2025.

The previous administration's strategy for oil exploration and exploitation sought to strengthen Pemex, increase production to 2.4 million barrels of oil per day, and achieve energy sovereignty.

However, oil production fell to 1.5 million barrels per day by the end of 2024, and self-sufficiency was not achieved.

During that period, the federal government allocated a total of 2.1 trillion pesos, representing approximately 6.1% of the Gross Domestic Product, in support of Pemex.

Direct transfers totaling 1.14 trillion pesos and tax exemptions were made, with the Shared Utility Tax (DUC) being reduced by almost one trillion pesos.

Despite the capital injections and tax exemptions, Pemex accumulated losses of 1.3 trillion pesos in the manufacturing sector.

The bet was on the refining model. And it was precisely in this area where Pemex recorded its greatest losses.

Priority was given to projects such as the Olmeca refinery (Dos Bocas), the purchase of Deer Park, and the modernization of the National Refining System.

From 2018 to 2024, Pemex recorded a total of 1.34 trillion pesos in refining losses.

This strategy did not achieve fuel self-sufficiency.

Gasoline and diesel imports will account for 50% of demand by 2024.

During her administration, Claudia Sheinbaum has basically maintained the same approach based on promoting refining, rejecting energy liberalization, and increasing government participation.

In November 2024, it announced a new tax regime for Pemex and introduced the Oil Welfare Tax, with a rate of 30% for oil and 11.63% for associated gas.

Its intention is to simplify taxation, capture productive and operational efficiencies, and allow Pemex to use more of its revenues for strategic functions.

He emphasized strengthening Pemex as a strategic state enterprise without compromising national sovereignty and proposed joint ventures that would benefit indigenous communities.

We're likely to hear news about these mixed contracts today, which Pemex and the government say are generating high expectations and interest from domestic investors.

The 2025-2030 Work Plan was presented last February.

The plan is to achieve oil production of 1.8 million barrels per day during the six-year term; guarantee the supply of gasoline and diesel at affordable prices, without increases above inflation; strengthen the refining system; and continue budgetary support for Pemex.

In recent days, the Treasury, headed by Edgar Amador, secured the placement of $12 billion in pre-capitalized structured notes for amortizations and bank loans, which was well received by the Fitch rating agency.

Pemex's operating model is unlikely to change, given the provisions of the Pemex Work Plan 2025-2030. However, we'll have to wait and see what changes.

The plan to be presented for Pemex's next decade will determine not only its strengthening or further weakening, but also, implicitly, the country's economy. We'll see.