Mexico’s energy ideology forecast to crash by 2030
The International Energy Agency (IEA) published its annual global outlook on crude and refined products through 2030, analyzing trends for the largest industry players and their interactions in the international arena. “Global oil markets have so far had a turbulent 2025. Heightened trade tensions and uncertainty have weighed on the world economy and, by extension, oil demand growth”, notes the report’s presentation, released this month (notably, before the Israel-Iran conflict briefly ignited global crude oil concerns).
Volatile and challenging as the international arena might be, the IEA sees Mexico’s outlook as mired in its own set of issues. The agency forecasts continued declines in Mexico’s crude and oil condensates production over the next five years, pushing the country to become a net crude importer by 2030 for the first time in decades.
While Mexico has sporadically imported crude in its recent history, it has been for different reasons. Specifically, in the last months of the Peña Nieto administration, Pemex imported light crude as part of a test to improve efficiency at its refineries, not because of a lack of domestic capacity. Nonetheless, Andres Manuel López Obrador made frequent references to the episode, characterizing it as “absurd”. AMLO’s own energy strategy rejected the plan, promising instead that the country would become self-sufficient.
Fast forward to seven years later, the IEA is warning that Mexico is on the path to import crude, not to boost refineries’ efficiency but to cover a forecast crude deficit of 500k b/d by 2030. The country is expected to lose 680,000 b/d by then. “Looking forward, challenges remain with Pemex carrying a high debt load and only one major project slated to see first oil by 2030,” said the IEA. The company lost around 160,000 b/d in the first half of 2025 compared to the same period of 2024, according to the report, adding that Pemex had large unpaid liabilities with its suppliers. Moreover, upstream budget cuts have seen oil rigs slashed from 50 in October 2024 to fewer than 20 in less than six months.
Reading between lines, the report implies that, should trends persist, by late 2026 or early 2027, Pemex could start needing to import crude to feed refineries including Dos Bocas, which will be (hopefully) fully running. Meanwhile, Pemex’s crude output would keep falling to around 1.3m b/d, with small production coming from the private sector.
Mexico’s most promising projects are Trion, from Australian company Woodside, that could bring online some 100,000 b/d by 2028, while shallow-water field Zama —shared by Pemex and a private-sector conglomerate— is still awaiting a final investment decision, said the report. “Yet the window to see production from these two developments before the end of our forecast is closing”, it added.
The IEA also highlights that Pemex “severely” curtailed its investments during the pandemic, with former President Andres Manuel Lopez Obrador pushing the state oil company to focus on quick crude growth from onshore and shallow-water fields and leave deepwater projects, which required higher investments but also held larger reserves. “As of 2024, over half of Pemex’s production came from just seven of its 240 fields,” according to the report.
Somewhat more optimistically, the report expects downstream improvements in the coming months. “The much-delayed 340,000 bpd Olmeca refinery in Dos Bocas on the Gulf of Mexico is currently ramping up, and expected to reach full operations in 2026. The first 170,000 bpd phase started in late 2024, with the second tranche expected to be running later this year.”
Pemex is also working on an overhaul program for its six refineries and upgrading units at Tula, Salina Cruz, and Salamanca, with an estimated capex of US$8 bn. In fact, the increase in Pemex’s downstream capacity partly drives the forecast of Mexico becoming a net crude importer.
Interestingly, the report does not mention Mexico’s recent overhaul of the energy sector and the multiple modifications to the legal framework. The Sheinbaum administration has promised these changes should allow Mexico’s crude production to remain at 1.8m b/d by 2030, her last year in office.
Waiting for contracts as doubts remain
Officials from the Energy Ministry (Sener) and Pemex are said to be working “day and night” to sign the first dozen mixed contracts to partner up with Pemex. While terms so far have kept most private-sector players on the sidelines, officials suspect that some of them would ultimately agree to them because they fully rely on Pemex, and must therefore lower their expectations. With both sides waiting for the other to blink, no contracts have been signed yet. According to sources, Sener met with oil-service companies to present the first projects under the mixed contracts, mostly including mature fields owned by Pemex.
Under the proposed terms, Pemex would own 40% of the crude production and would not have to provide cash upfront to finance the development. The scheme would work much like the current exploration and production service contracts, known as CSIEEs, though under the new mixed contracts, partners would be paid with crude production and not with a fixed fee per crude barrel extracted.
The projects individually are said to be unattractive for most of the participants; however, oil-service operators will likely try to strike multiple deals with the state-owned company. Also, most of those companies are already Pemex’s suppliers so they might take the risk to enter in these new deals as the state-owned company is its most significant or only client in Mexico, as explained above. Companies will still need to sell its crude production share through Pemex though payments would be secured by a trust created for each contract, thus alleviating concerns around delays on payments under each contract.
Once Pemex’s Board approves the deals, Sener must also greenlight the operation, as under the new legal framework, the ministry has the last word on this process. Pemex and Sener have jointly worked on the deal over the last few months, and they are understood to want to start striking the first contracts over the next few days.
Pemex’s management previously said that the company aimed to sign 17 deals under the new mixed contract model this year, as it seeks fresh capital to offset a reduced capex budget in the coming quarters. As of the end of the first quarter, Pemex had spent MXN 69.2bn (US$3.5 bn) of its MXN 97.8bn exploration and production budget — about 70% of its full-year allocation.
In other energy news…
- Pemex’s suppliers could stop providing services as early as July due to mounting unpaid invoices, according to Amespac, the largest oilfield service provider trade group. “We are currently experiencing an unprecedented crisis because of the lack of payment for our services and a deep budget cut,” Amespac said. Pemex owes MXN 50bn (~US$2.6 bn) for work already performed to suppliers affiliated to Amespac. Some of the unpaid work was done over a year ago, the group said.
- Mexico’s authorities found a clandestine refinery with over 500,000 liters of crude in the state of Veracruz. Authorities found seven large-capacity mobile tanks, four vertical tanks, and infrastructure used for fuel production. The area is known to have presence from criminal cells including the Jalisco New Generation Cartel, the Gulf Cartel, La Barredora, and Los Zetas, all of which are linked to fuel theft and extortion.
- Mexico’s crude production from contracts awarded from 2015–2018 rose by 3% in March from a year earlier, rebounding from a sharp drop earlier this year, according to the latest Mexican Petroleum Fund (FMP) data. Crude output from contracts rose to 181,750 bpd in March from 176,920 bpd a year prior. Condensate output from contracts fell by 33% to 1,710 bpd in March from a year prior but rose by 5% from February. Natural gas production was 166.4m cubic feet daily, down by 26% and 1% lower from February.
- Mexico’s new energy regulator has filled some key positions with former officials from Sener, the extinct energy regulatory commission (CRE) and Mexico City’s government. The new head of the National Energy Commission (CNE), Juan Carlos Solís Ávila, has appointed new heads for the hydrocarbon, electricity, finance, legal and verification units.
- The new technical secretary, the second-highest rank position inside the new regulator, is Pedro Lara Lastra, who formerly served in a similar position in the previous regulator. Lara also worked in Pemex; however, most of his career as a public official took place in the Mexico City government.
- Gilberto Lepe is the new head of the hydrocarbon unit. Lepe, an academic from UNAM, worked for almost a decade in the Regulatory Improvement Commission (CONAMER), which is in charge of analyzing the cost-benefit of all regulation created by federal entities.
- The new head of the electricity sector is Héctor Beltrán, who previously worked in the now-extinct Energy Regulatory Commission for over 11 years.
- Darío Hinojosa will lead the verification unit. Before this position, Hinojosa worked for almost three years at renewables company Tuto Power, and before that for four years at the extinct CRE.
- María Guadalupe Hernández Rodríguez will lead the legal department at the new CNE. Hernández briefly worked in the legal team at CRE, and four years in the refined products unit at Sener.
- Rafael Hernández Alarcon, a former official in the Mexico City government, will head the financial unit at the new commission. Hernández briefly worked at CRE before making the transition to the CNE.
- Mónica López Aguilar is the new head of the strategy and the liaison among units at the new regulator. López worked for three years at the National Water Commission and for more than six years at the environmental and safety regulator in the energy sector (Asea).
- Pemex paid 17% less in oil royalties in May than it did in January, as payments keep falling under the scheme that consolidates payments. Pemex paid MXN 16.4 bn (US$864 mn), down from MXN 19.7 bn in January, the last month under the old scheme.
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