Mexico Energy Monitor

Mexico Energy Monitor / July 10th, 2024 


Sheinbaum Appoints New Energy Minister, CFE and Pemex Pending 

  • Mexico President-elect Claudia Sheinbaum announced the nomination of Luz Elena González Escobar to lead the country’s Energy Ministry under her administration. 



  • As energy minister, González Escobar steps into a role fraught with challenges. Mexico’s energy sector is at a crossroads, balancing between traditional fossil fuels and the imperative of transitioning to renewable energy sources. Her background working with Sheinbaum in the Mexico City Environmental ministry suggests she will look more favorably on renewables and cleaner energy than her predecessor. 


  • Along with the Economy Ministry, one of her primary tasks will be to navigate the ongoing energy dispute between Mexico, the United States and Canada under the USMCA. This dispute, centered on Mexico’s energy policies favoring state-owned entities like state-producer PEMEX and public utility CFE, has significant implications for North American energy integration and foreign investment in Mexico’s energy sector. 


  • In addition to the USMCA dispute, González Escobar will oversee the implementation of the Plan Sonora, an ambitious initiative aimed at boosting clean energy production in northern Mexico. The plan includes constructing solar power plants and associated infrastructure, positioning Mexico as a key player in the North American clean energy market. However, the plan has faced criticism for its lack of transparency and detailed roadmap. 


  • González Escobar will also have to balance Sheinbaum’s stated policy to emphasize State control over energy resources and the need to attract foreign investment along with technological expertise essential for modernizing Mexico’s energy infrastructure. The financial situation of PEMEX will also remain a key part of González Escobar’s portfolio moving forward. 


  • President Andrés Manuel López Obrador (AMLO) said in a recent press conference that Claudia Sheinbaum’s administration will determine the future use of nuclear energy in the country. This marks a shift from AMLO’s previous stance against new nuclear plants. AMLO mentioned the feasibility of adding a third reactor at Laguna Verde as Sheinbaum prepares to prioritize sustainable energy policies. 


  • Sheinbaum also appointed Marcelo Ebrard to lead the Economy Ministry, which puts Ebrard at the center of the upcoming review of the USMCA. Right after his nomination, Ebrard assured business leaders that Mexico will welcome private investments in clean energy to meet the goal of adding 20 gigawatts of renewable energy by 2030. 


  • Addressing the concern over current project delays, Ebrard emphasized the necessity for both public and private sector investments to achieve energy targets. He highlighted the strategic importance of energy in driving Mexico’s investment pace and noted the government’s intention to facilitate private sector participation through streamlined approvals and incentives. 


  • Sheinbaum still needs to announce her appointments for both PEMEX and CFE.

Eni Announces New Offshore Discovery 


  • Italian energy company Eni announced a significant oil and gas discovery in the Sureste Basin, offshore Mexico. The successful Yatzil exploration well, located in Block 7, was drilled to a depth of approximately 2,441 meters, encountering about 40 meters of net pay in good quality reservoirs, Eni said in a press release (Eni announces a new discovery offshore Mexico). This discovery is set to enhance Eni’s future development plans in the region, potentially establishing a new production hub. 


  • The Yatzil-1 EXP well marks Eni’s latest success in Mexico, where the company has been active since 2006. This well is part of a broader strategy to expand its presence and production capabilities in the Gulf of Mexico. The Yatzil discovery follows several other successful wells drilled by Eni in the Sureste Basin, reinforcing the area’s potential for substantial hydrocarbon resources.  


  • According to Eni, the Yatzil discovery could be efficiently tied into existing infrastructure, particularly the nearby Amoca field, which is already under development. The proximity to Amoca, Miztón, and Tecoalli fields suggests that the new find can be swiftly integrated into ongoing production operations, optimizing both time and costs. 


  • Looking ahead, Eni plans to conduct further appraisal activities to better delineate the extent of the Yatzil discovery and to determine the most efficient development plan. The company’s strategy involves integrating new discoveries with existing assets to create a synergistic production network that maximizes resource recovery and operational efficiency. 


  • State-producer PEMEX also announced a significant discovery in the sub-salt Los Soldados-1001 well in Las Choapas, revealing over two billion barrels of hydrocarbon potential. The exploratory well, drilled to nearly 4,600 meters, encountered a 400-meter sequence of sandstones and conglomerates with substantial gas and oil indicators, PEMEX said. Leonardo Enrique Aguilera Gómez, PEMEX’s Deputy Director of Exploration, emphasized the discovery’s strategic importance for future terrestrial and marine exploration. 


  • Meanwhile, Mexico hydrocarbon regulator CNH approved PEMEX’s request to drill the exploratory well Nanik-1EXP in shallow waters off Veracruz and Tabasco. Part of exploration plan AE-0148-3M-UCHUKIL, the well aims to discover hydrocarbons in Lower Pliocene and Upper Miocene levels, reaching a total depth of 4,290 meters. Expected to find light oil, the well has prospective resources of 4.1 MMboe in the Pliocene and 7.95 MMboe in the Miocene, with geological success probabilities of 38% and 30%, respectively. Drilling starts July 29th, 2024, spanning 104 days. 


Energy Transition Will Impact PEMEX Segments According to Climate Risks Report 


  • State-producer PEMEX recently released its 2024 Climate Risks Report, outlining the significant challenges and strategic responses as it navigates the global energy transition. informe_riesgos_climaticos_2024.pdf ( The report underscores the urgency of addressing climate risks, driven by increasing global pressures to reduce carbon emissions and transition to sustainable energy sources. 


  • The report identifies several key climate risks, including regulatory changes, physical climate impacts, and market shifts toward cleaner energy. Regulatory risks arise from stringent climate policies and international agreements aimed at reducing greenhouse gas emissions, the report reads. These regulations could impose additional costs and operational constraints on PEMEX, affecting its profitability and competitiveness. 


  • The physical risks pertain to the direct impact of climate change on PEMEX’s infrastructure and operations, including extreme weather events, rising sea levels, and temperature fluctuations, which could disrupt production and damage assets. Market risks involve the global shift towards renewable energy, potentially decreasing demand for fossil fuels and impacting PEMEX’s market share and revenue. 


  • In response to these risks, PEMEX said that it is developing a comprehensive climate strategy focusing on emissions reduction, energy efficiency, and investment in renewable energy projects. The company aims to achieve a 25% reduction in greenhouse gas emissions by 2030, aligning with Mexico’s national climate goals and international commitments under the Paris Agreement. PEMEX plans to enhance its operational efficiency by upgrading existing facilities, implementing advanced technologies, and optimizing processes to minimize emissions and energy consumption. 


  • A cornerstone of PEMEX’s strategy is its commitment to renewable energy, the report reads. The company is investing in solar, wind, and bioenergy projects, leveraging Mexico’s abundant natural resources to diversify its energy portfolio. These investments are expected to not only reduce PEMEX’s carbon footprint but also position the company as a leader in the renewable energy sector, attracting potential investors and partners interested in sustainable energy solutions. 


  • Moreover, PEMEX is focusing on improving its climate resilience by enhancing its infrastructure to withstand extreme weather conditions and other climate-related impacts. This includes upgrading facilities, reinforcing critical infrastructure, and implementing robust monitoring and response systems to mitigate the effects of climate change on its operations. 


  • The report highlights PEMEX’s efforts to engage with stakeholders, including government agencies, investors, and the public, to promote transparency and accountability in its climate actions. 


  • Recently, President-elect Claudia Sheinbaum said that renewable energy production and cogeneration projects could be strategic in improving state-producer PEMEX’s position to refinance its debt. PEMEX recently released a sustainability plan that seems to correlate with Sheinbaum’s expectations of the firm’s future. Under this plan, PEMEX will prioritize environmental, social and governance (ESG) factors in its analysis of new investments as well as to consider electric mobility and green hydrogen projects. 



Mexico Reaches Record High US Natural Gas Imports 

In the first four months of 2024, Mexico’s imports of US natural gas reached a historic high, with daily imports averaging 6,004 million cubic feet (mcf), according to the US Energy Information Administration (EIA). This marks an 8.25% increase from the same period in 2023, the largest jump in three years. Most of the imported gas is used for electricity generation, with the rest serving the petroleum, industrial, and other sectors. 

The availability of relatively inexpensive natural gas from the US has shifted Mexico’s natural gas supply mix. Mexico’s current natural gas production levels are nowhere near sufficient to meet its increasing domestic need. 

In 2022, gas demand in Mexico reached 8,397 million cubic feet per day (MMcf/d), of which only 32% was met with domestic production. The remainder of that demand was met with imports comprised almost exclusively of piped gas from the US. In Mexico, the electric power sector has been leading growth in natural gas consumption in recent years.  


Mexico’s Electricity Generation per Fuel