Mexico's national oil company and the world's most indebted state oil firm, with obligations topping $100bn. A giant oilfield discovery in the 1970s made Pemex the economy's motor. Successive governments milked it, starving it of investment. Debt ballooned; corruption flourished; pension obligations swelled. Its exploration-and-production arm still makes money, but refining does not.
Oil production peaked in 2004 at 3.4m barrels per day and has fallen to about 1.6m. Natural-gas production has also declined. When gas output peaked in 2009, power cuts followed, pushing Mexico to import gas from Texas. Until the turn of the 21st century Mexico produced all the natural gas it needed; Pemex produced gas only as a byproduct of its more lucrative oil operations.
Pemex's domestic refineries are inefficient and dilapidated; their high-sulphur fuel oil clogs systems and raises costs and emissions.
Former president Andrés Manuel López Obrador's vision harked back to the petrol boom of the 1970s. He poured in subsidies, tax breaks and capital injections worth some $100bn over six years. His government froze a 2013 energy reform that had opened the oil and gas sector to private investment, curbed the private sector, ended oil auctions and dismantled the industry's independent regulators. He doubled down on refineries, building a new one in his home state of Tabasco (it has yet to produce anything on a commercial scale). He discouraged renewables and dismissed fracking.
In 2020 Fitch and Moody's downgraded Pemex to junk, calling it no longer just a corporate problem but a sovereign one.
President Claudia Sheinbaum unveiled a reform plan on August 5th 2025. The financial component uses a special-purpose vehicle based in Luxembourg that issues dollar-denominated bonds due in August 2030. Pemex gets access to the proceeds—so far $12bn—but keeps the debt off its (and the government's) balance-sheet. A 250bn-peso ($13bn) investment fund, partly financed by development banks, is intended to pay suppliers and bankroll projects. The goal is for Pemex to be financially self-sufficient from 2027 and its debt to fall to $77bn by 2030.
The operational plan aims to boost daily production of liquid hydrocarbons to 1.8m barrels and natural gas to 5bn cubic feet (from 3.7bn). "Mixed contracts" with private partners are intended to lure investment, though by law Pemex must keep at least a 40% stake in deepwater projects. Shell and Chevron have abandoned exploration licences after disappointing results. Supplier arrears stand at $20bn–25bn.
Pemex's board is dominated by political appointees. Weak independent regulators no longer provide discipline. Workers can retire after only 30 years of service.
People who go to conferences are the ones who shouldn't.