Mexico's government is slashing financial ******* istance for the state energy major by as much as 70% despite Pemex's continued struggle to pay down debt and boost production. The decision rests on expectations that the company will benefit from the oil and gas price rally spurred by the U.S. and Israeli war against Iran.
Per a Bloomberg report from this week, the government of Mexico sees Pemex posting a rare cash surplus of some 95 billion pesos, or around $5.63 billion, as a result of the oil price rally. Based on those expectations, the Scheinbaum government stipulated financial help of just 81 billion pesos for the company in next year's budget, equivalent to some $4.8 billion. This was down by 70% from this year.
"We said that by 2027, support for Pemex would be very limited, and that's indeed the case," President Sheinbaum told media this week. "Pemex now receives very little support from the Mexican government, and its own finances will sustain its development."
Mexico's energy major is the most indebted company in the world, with a load of some $105 billion as of mid-2025, of which some $20 billion is in unpaid bills to suppliers. Since then, the company has managed to reduce the debt pile to some $79 billion as of the end of the first quarter of this year. The company said in a news release at the time that this was the lowest its debt has been since 2014.
Meanwhile, however, boosting refining output has turned out to be a challenge, and issues with crude quality—including high water content—have alienated key buyers over the past couple of years. The previous administration of Mexico focused on supporting the company by turning it back into a monopoly on the Mexican energy market. The Scheinbaum government, on the other hand, moved to open up the Mexican oil industry to other players as well, launching a new contract framework for joint ventures, the so-called mixed contracts. In mixed development allocations, Pemex can enter into an agreement with one or more private firms.
#PEMEX #government #scheinbaum #since
Per a Bloomberg report from this week, the government of Mexico sees Pemex posting a rare cash surplus of some 95 billion pesos, or around $5.63 billion, as a result of the oil price rally. Based on those expectations, the Scheinbaum government stipulated financial help of just 81 billion pesos for the company in next year's budget, equivalent to some $4.8 billion. This was down by 70% from this year.
"We said that by 2027, support for Pemex would be very limited, and that's indeed the case," President Sheinbaum told media this week. "Pemex now receives very little support from the Mexican government, and its own finances will sustain its development."
Mexico's energy major is the most indebted company in the world, with a load of some $105 billion as of mid-2025, of which some $20 billion is in unpaid bills to suppliers. Since then, the company has managed to reduce the debt pile to some $79 billion as of the end of the first quarter of this year. The company said in a news release at the time that this was the lowest its debt has been since 2014.
Meanwhile, however, boosting refining output has turned out to be a challenge, and issues with crude quality—including high water content—have alienated key buyers over the past couple of years. The previous administration of Mexico focused on supporting the company by turning it back into a monopoly on the Mexican energy market. The Scheinbaum government, on the other hand, moved to open up the Mexican oil industry to other players as well, launching a new contract framework for joint ventures, the so-called mixed contracts. In mixed development allocations, Pemex can enter into an agreement with one or more private firms.
#PEMEX #government #scheinbaum #since
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