Mexico has outlined a major financial commitment for Petroleos Mexicanos (Pemex) in its 2026 budget, signalling ongoing state support for the debt-laden energy giant.
The government has allocated 263.5 billion pesos to cover the company’s expenses, according to budget documents.
This comes as Pemex prepares to handle its largest debt repayments in the next three years, while also attempting to stabilise crude production and secure new investment partnerships.
Pemex budget for 2026 set at 517.4 billion pesos
The proposed budget for Pemex in 2026 totals 517.4 billion pesos, representing a 7.7% increase from the 2025 allocation.
Mexico expects crude oil output to average 1.8 million barrels per day next year, with oil prices forecast at $54.9 per barrel. Oil exports are projected at 521,000 barrels per day, according to the official documents.
The allocation comes shortly after Pemex secured $12 billion through the issuance of pre-capitalised notes in July and launched plans for a $13.3 billion investment vehicle funded by domestic banks.
Earlier this month, it also proposed a $10 billion buyback operation aimed at reducing a large wall of debt maturities falling due next year.
Government support continues under Sheinbaum
Budgetary assistance for Pemex has become a recurring measure for successive governments.
President Claudia Sheinbaum earmarked $6.7 billion for Pemex in 2025, following her predecessor Andrés Manuel López Obrador, who provided roughly $80 billion in tax breaks and direct cash injections during his six-year tenure.
Despite these interventions, the company has struggled to arrest a long-term decline in production.
Pemex, founded almost 90 years ago during Mexico’s wave of nationalisations, remains the crown jewel of the Mexican state but is burdened by debt exceeding $100 billion.
Credit analysts note that even after buybacks and refinancing efforts, Pemex will still carry over $75 billion in debt, excluding supplier and employee obligations.
Production goals and operational challenges
Pemex unveiled a new business plan last month, targeting crude output of 1.8 million barrels per day and 5 billion cubic feet of natural gas.
However, analysts have flagged the strategy as insufficient to reverse declining production, which has fallen to nearly half of its peak two decades ago.
The company is now seeking to work with private companies to help drill ageing wells and exploit offshore resources. It is also weighing increased fracking to access Mexico’s substantial shale reserves.
A government document released last week confirmed that Pemex has signed 11 partnership agreements with private firms, though further details on these projects remain undisclosed.
Short-term relief, long-term uncertainty
While Mexico’s latest budget provides Pemex with financial breathing space, the company’s long-term viability depends on its ability to raise output and restructure operations.
The immediate pressure is on refinancing upcoming maturities, but questions remain about how the company will sustain investment and growth in the face of structural challenges.
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