Launch of Miranda EnergeA
Miranda Partners is pleased to announce the creation of Miranda EnergeA, a new business division formed following the merger with leading independent energy consultancy EnergeA. The division will provide strategic, financial, regulatory, and technical advice to public and private clients navigating Mexico’s complex and rapidly evolving energy landscape.
Miranda EnergeA will be led by Raúl Livas and Guadalupe Campuzano, two of the most respected experts in the Mexican energy sector. With decades of combined experience in regulation, project development, and corporate strategy, they bring a deep understanding of the industry’s challenges and opportunities. EnergeA previously operated as the energy advisory arm within Grupo StructurA, where Raúl was a co-founder. Please see here for more information.
Duncan Wood on US-Mexico Energy Interdependence
Duncan Wood, who earlier this month joined Miranda Partners as a Senior Advisor, writes in The Hill about the oft-overlooked but critically important U.S.-Mexico energy interdependence. As both nations navigate the complexities of energy security and economic growth, their collaborative efforts in the energy sector become increasingly vital. The article underscores how shared investments and policy alignments can bolster renewable energy initiatives, enhance grid resilience, and drive mutual prosperity. You can read Duncan’s column here.
Pemex takes small initial step to trim costs
Early in her administration, President Sheinbaum promised that Pemex’s new management would present a plan to save around MXN 50 bn (~US$ 2.5 bn), by slimming its internal structure, helped by the legal modifications that were then underway. Among the changes approved by Congress was the elimination of most subsidiaries of Pemex and CFE, which the government argued only overlapped functions and increased costs. Last week, Pemex’s new Board of Directors voted on a plan to lay off around 3,000 workers and save MXN 10.5bn, so far a small fraction of the originally announced savings.
The new structure basically eliminates a few departments from the previous subsidiaries, integrating tasks into new unified departments. The most significant example of this integration is in trading, as Pemex is now consolidating a new single, dedicated office, instead of having separate teams in the upstream and downstream businesses. This new office will also absorb Pemex international trading arm, PMI.
Beyond these changes, the company is for the most part maintaining its old structure, which likely explains why savings at this point would not be as significant as the government initially announced. And while 3,000 positions is indeed a large number, it is but a rather small fraction for an organization with over 130,000 employees. Of note, all laid off workers were non-unionized: the board did not make any cuts to the 95,000-strong unionized labor force, one of the largest and strongest in LatAm. Moreover, Pemex added around 9,000 new employees between 2022 and 2024, on top of a major increase in the average number of temporary employees, so letting 3,000 go does not offset the growth in headcount over the last two years of the previous administration.
Source: Pemex 20-F Form.
It’s not yet clear what the final severance costs will be, as some of them are workers meeting the criteria to retire this year or soon. Also, non-unionized workers are often hired in more senior positions, so the company could lose important expertise in the process. It’s not clear what criteria were used by the board to vote on this plan, but it’s only so far a rather small initial step to deliver on President Sheinbaum’s promise.
Reopening wells
Pemex also confirmed the return of Angel Cid as the new E&P division, with Ulises Hernández as deputy head of exploration and León Daniel Mena leading extraction and production. Cid Munguía, who had previously held the position until the end of the previous administration, returns to the leadership of PEP following the surprise departure of Néstor Martínez. His new tenure will focus on reactivating closed wells, a strategy aimed at boosting oil production, which has plummeted by more than 100,000 b/d between September 2024 and April 2025. This plan seems to revert what outgoing E&P head Martínez did in his brief tenure (September 2024 to April 2025) as Pemex will be now asking companies to increase activity instead of trying to cut costs by closing wells with questionable profitability.
It’s impossible to say from the outside at this point whether Martinez’s plan was working, or whether this U-turn proposed by Cid will be effective. It is understood that Cid will propose using the brand new mixed-contract model, with private companies partnering up with Pemex and investing the capex to reopen the wells. If that’s the plan, those companies will take 40% of the production, but some industry sources point out that the real plan is to sign conventional oil service contracts where Pemex pays a fee per oil barrel extracted. In both cases, what companies need to know is how Pemex is going to promise to pay for their services – particularly considering the long list of suppliers still waiting for compensation.
Pemex has yet to officially announce what the strategy will be.
In other energy news…
- Anglo-Dutch oil major Shell is in the process of selling its gas stations in Mexico to Mexican company Iconn, which will keep the Shell brand but operate and own the stations, according to Reuters. The transaction is expected to close by the third quarter of this year. Iconn operates the Seven Eleven convenience store chain in the country, and its associated Petro7 gas stations.
- Pemex paid US$120 mn to Norway’s Borr Drilling in the first quarter, covering about a year’s worth of delayed invoices in Mexico. “We have received a US$120 mn payment from Mexico so far this year, which is about one year of receivables or earnings,” said CFO Magnus Vaaler during the company’s first-quarter earnings call. “That is obviously very positive and fills up our bank account.” Pemex started delaying Borr’s payments for longer periods in the second half of 2024. But the recent payment suggests that the situation may be improving, noted CEO Patrick Schorn.
- Pemex paid 8.5% less in oil royalties in April than it did in January under a new scheme that consolidates payments. The company paid MXN 18 bn (~US$929 mn) in April under the new payment plan, part of an energy regulation overhaul passed by Congress in March. That is down from MXN 19.7 bn in January, the last month under the old scheme. The April figure was also 4% lower than the MXN 18.85 bn paid in March, but Pemex still paid MXN 793 mn under the now-defunct profit-sharing royalty (DUC) that month, which had been its largest monthly obligation. The data did not clarify why Pemex made that payment.
- The new ethane storage terminal owned 50-50 by Brazilian-Mexican JV Braskem Idesa and Dutch-based company Advario will be fully operational by mid-July when the Etileno XXI cracker comes back from its full-stop maintenance program. The inauguration of the terminal, which cost US$580 mn, will mark a turning point for the company that faced a serious crisis when AMLO’s administration ordered a halt to the supply of natural gas to the petrochemical complex amid a complex legal battle on an Ethane supply contract where Pemex argued falsely that the original terms of the deal signed in 2009 were unfair for the state-owned company. Braskem Idesa subsequently reached a deal with Pemex that involved paying Pemex higher prices for ethane than contractually agreed on, and the construction of the import terminal to reduce its dependence on limited Pemex ethane supplies or expensive ethane imports by ship.
- Mexico’s coasts face up to 10 hurricanes of categories 3 to 5 this year, six coming from the Pacific, and four from the Atlantic, according to the forecast by the National Meteorological Services. The 2025 season, which formally started on May 15, would hit the Pacific with 16 to 20 tropical cyclones divided into eight to nine tropical storms, four to five hurricanes category 1 to 2, and three to four hurricanes category 3, 4 or 5. In the Atlantic, in the coast of the Gulf of Mexico, there could be between 13 to 17 cyclones, including seven to nine tropical storms, four to five minor hurricanes (category 1 to 2), and between three to four hurricanes category 3, 4 or 5. More activity is expected from the Pacific due the neutral phase of the El Niño over the year. Pemex has 15 port facilities along both coasts, with two maritime terminals on the Pacific coast and three on the Gulf of Mexico as well as 10 operational bases and port service units. Pemex also has 300 offshore exploration and production platforms in the Gulf of Mexico.
Download PDF: MI-EnergyChatter-052825