Pemex debt strategy at risk of unravelling

The Mexican firm had made some progress arresting its hefty debt pile, but the economic downturn and government obsession with upstream targets has started to take its toll

When President Andres Lopez Obrador romped to victory in Mexico’s 2018 election, one of his key pledges was to tackle state oil firm Pemex’s chronic debt problem. Total company debt had ballooned to over $100bn, rising at an annual rate of almost 14pc, while failing to halt rapidly declining crude production. At first, everything seemed to go according to plan. In 2019, Pemex managed to reduce its debt balance for the first time in 12 years, despite the government cancelling all bidding rounds, shunning foreign investment and saddling the NOC with the country’s upstream recovery programme. Pemex has until 2024 to revive national crude production to 2.4mn bl/d, mainly through the startup of 2