October 25, 2024 [Oil Price]- Mexico’s state-controlled oil giant Pemex plans to raise its oil and gas reserves, including via intensified deepwater exploration, under new President Claudia Sheinbaum, Reuters reports, citing an internal company document.

Mexico’s former president, Andres Manuel Lopez Obrador, had attempted – and failed – to turn the fortunes of the state oil giant. Pemex’s production continued to drop under Lopez Obrador, despite his insistence and preference for stronger government support for the national oil company.

Now Pemex will seek to create new business models to attract outside investments, according to the document Reuters has seen.

In contrast, President Sheinbaum’s predecessor Lopez Obrador wasn’t keen on private companies cooperating with Pemex.

Despite Lopez Obrador’s efforts, the state firm’s oil production has been falling. Crude oil output averaged below 1.5 million barrels per day (bpd) in August, as Pemex’s crude production has hit this year the lowest level in more than 40 years. Mexico’s crude oil output peaked at about 3.4 million bpd 20 years ago.

The state oil firm has also failed in Lopez Obrador’s pledge to significantly reduce fuel imports with the start of his flagship petroleum project, the Olmeca refinery, also known as Dos Bocas. The project was designed to reduce Mexico’s dependence on fuel imports from the United States and was billed by Lopez Obrador as a key step toward “energy independence.”

This month, Mexico moved to give the president, who is now Sheinbaum, more control over Pemex and the country’s power utility, CFE.

Sheinbaum has vowed to continue the policy of government support to the state oil firm.

But continued support for Pemex remains a key challenge for Mexico’s new administration, Fitch Ratings said after the election in June.

“Pemex’s debt, equivalent to almost 6% of GDP, remains a material contingent liability for the sovereign,” the credit rating agency noted.

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