Pemex's financial plan must be profitable: experts

The federal government's policy of doing everything possible to keep Petróleos Mexicanos ( Pemex ) afloat with pre-capitalized notes ( P-Caps ) worth 12 billion dollars and the 2025-2035 strategic plan that will be presented on August 5 , which includes a new business model to launch 11 investment projects in partnership with the private sector, should ensure the company's future profitability.

Otherwise, the government will continue to sacrifice fiscal resources that should be allocated to health, education, and combating poverty, putting public finances at risk , warned analysts.

In addition, there is less revenue, after Pemex lowered its single tax burden with the new oil welfare tax, which was reduced to 30%, instead of the 65% rate it had in 2019, and the budget line approved by Congress for this year for 136 billion pesos, which is intended to be repeated for 2026.

For Marco Oviedo, senior strategist for Latin America at XP Investments, Pemex has many alternatives to avoid bankruptcy, but the decision is more political than economic.

"There are other paths," said the doctor in Economics and former deputy director general of Public Debt at the Ministry of Finance and Public Credit (SHCP).

Regarding whether what is being done to date is worthwhile, he considered that question to be asked in the context of its future profitability.

Pemex must refocus its efforts on businesses that generate cash and be able to pay its obligations , he noted.

Moving away from this will condemn the country to continue injecting fiscal resources needed for other purposes, such as reducing poverty and improving health and education. "The myth of energy sovereignty can be very costly," he warned.

César Rivera, energy and environmental researcher at the Center for Economic and Budgetary Research (CIEP), noted that support for Pemex is part of the National Development Plan, and that's why new mechanisms are being sought.

One example of this is the P-Caps notes, which are used to increase cash flow, meet maturities, and improve Pemex's balance sheet without direct disbursement from the federal government, he mentioned.

It was a good idea, he acknowledged, because it doesn't compromise the budget for future generations. The risk, he added, is that at some point the trust funds will run out, and the government will have to step in to pay it off.

This strategy will allow Pemex to improve its balance sheet, he said, but many commitments remain to be met, such as paying suppliers, meeting debt maturities, and ensuring there are no operational problems.

Good and cheap

Most analysts welcomed the recent issuance of bonds through P-Caps with a 2030 maturity, as it is a good and inexpensive mechanism.

"In theory, it would be at a lower financing cost, which is worthwhile. So it's true that the vehicle is good and cheap. I don't know if it's attractive; that remains to be seen," Oviedo said.

The premise, he said, is that Pemex should generate sufficient resources to pay back the vehicle; otherwise, the federal government would assume that liability.

However, the expert emphasized that the risk to the public sector is zero, as it is assumed by the government, whose debt could potentially increase.

Regarding the budget line, he estimated that it could be an alternative way to allocate resources directly to pay off Pemex's debt, and perhaps also for commitments to suppliers, but it could be the least transparent.

The Universal

Fewer resources for the state-owned company

• Petróleos Mexicanos (Pemex) faces a significant reduction in allocated resources this year compared to the approved budget for 2024. The decrease is reflected in several key areas for the operation and strengthening of the state-owned company, as detailed in reports from the Ministry of Finance and Public Credit (SHCP). The main points reflecting this situation are explained below:

• General budget decrease. Pemex reports a reduction of 82,554.3 million pesos in its budget at the end of the first half of 2025, equivalent to a 23.8% drop compared to the same period last year. This decrease is primarily attributed to lower physical and financial investment in the company, which has been one of the pillars of the current national energy model.

• Unspent resources at the Ministry of Energy. The Ministry of Energy (Sener), responsible for coordinating a large part of national energy policy, did not spend 69.264 billion pesos intended for Pemex's financial strengthening and operations in the electricity sector. This figure represents a 41.8% drop compared to the January-June 2024 period. The underspending in this area indirectly impacts the oil company by limiting institutional support mechanisms.

• Reduction in direct support to Pemex. Within the approved budget for 2025, the specific program for strengthening Pemex also presents a reduction. The cut amounts to 4.645 billion pesos, a 4.6% decrease compared to what was originally scheduled for this year. This implies fewer resources to meet short-term financial and operational commitments.

• Fewer resources for investment and supplies. Spending on physical capital, general services, materials, and supplies was also significantly reduced. The cut amounts to 38.23 billion pesos, representing a 12.6% reduction compared to the budget estimate for the year. These items are essential for the company's daily operations, refinery operations, infrastructure maintenance, and the purchase of strategic supplies.

• Adjustments are not equivalent to cuts, affirms the Treasury Department. Bertha Gómez, Undersecretary of Expenditures at the Ministry of Finance, clarified that these reductions should not be interpreted as direct cuts, but rather as adjustments that are part of budget management throughout the fiscal year. She pointed out that these types of adjustments apply to all public spending and respond to criteria of availability and priorities in the use of resources.

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