KEY POINTS
- Pemex is cutting $1.35 billion in spending to optimize resources and address debt.
- The company will prioritize high-producing wells while deferring other projects.
- Pemex faces significant financial challenges, including $100 billion in debt.
According to an internal document, Pemex, the state oil firm of Mexico, plans to cut expenditures in its exploration and production division for the remainder of the year in an effort to save up to $1.35 billion.
As part of the strategy to maximize resources and solve the company’s financial difficulties, some projects and acquisitions will be postponed until 2025.
Focus on high-producing wells
The biggest oil producer in Mexico, Pemex, will put more money into high-yield wells while postponing other administrative and production tasks like covering wells and buying seismic equipment.
Nestor Martinez, who was recently named by President Claudia Sheinbaum to head Pemex’s exploration and production division, is in charge of the spending reductions.
In order to lower operating expenses, Martinez’s letter detailed plans to postpone certain projects and purchases. The reductions are meant to assist the indebted business in better managing its financial status.
Approximately $100 billion in financial debt and $20 billion in provider debt are among Pemex’s major financial difficulties at the moment.
Impact on production and future plans
By adding condensates to its production total, the company hopes to maintain an average crude oil production of 1.8 million barrels per day (bpd). On the other hand, actual crude production is about 1.5 million barrels per day.
Pemex has indicated that it will concentrate on the most lucrative endeavors in the near future, but it has not disclosed how the spending reductions will impact its short-term production targets, according to Reuters.
Since taking office in October 2024, President Sheinbaum has highlighted Pemex’s contribution to preserving Mexico’s energy security. But these initiatives are nonetheless made more difficult by the company’s persistent debt problems.
Pemex is still among the most indebted oil companies in the world, even after the previous administration made an effort to lower debt.
Financial outlook and future investments
Pemex will review some investments and projects in 2025 to better match with the company’s resource efficiency strategy, according to the internal document.
Long-term plans will probably rely on the state of the global oil market and Mexico’s economic prospects, even though the short-term adjustments are intended to stabilize the company’s finances.
