Pemex Bets on Private Sector to Revive 400 Wells

Core Insights - Pemex is accelerating plans to increase crude oil output by reopening nearly 400 idle onshore wells and partnering with private firms to address previously shut wells due to high costs or technical challenges [1][3] - The initiative aims to raise production from 1.6 million barrels per day to a target of 1.8 million barrels per day set by the Sheinbaum administration [1] - Pemex's financial challenges include a reported debt nearing $105 billion and over $21 billion in outstanding payments to contractors, prompting a shift towards public-private partnerships [3] Group 1: Production and Partnerships - The proposed model involves private operators covering upfront costs for engineering, operations, and maintenance, with remuneration linked to field performance [2] - The plan is set to launch in October 2025, with an initial goal of restoring 13,000 barrels per day by year-end through a 1,500 million peso investment [2] - A significant deal with Carlos Slim earlier this year committed approximately $1.99 billion to drill 30 wells in the Ixachi gas- and oil-rich zone [2] Group 2: Operational Challenges - Pemex's production has declined by 8.6% year-on-year due to natural well depletion, overdue maintenance, and a reduced active rig base, which is currently 10% lower than mid-2024 [3] - The Olmeca refinery operates at under 40% capacity, with output decreasing month to month, complicating efforts to reduce fuel imports [4] - Pemex is also overhauling critical units at its Deer Park refinery in Texas, which supplies processed products back to Mexico [4] Group 3: Strategic Planning - Pemex and the Mexican government have introduced a Strategic Plan for 2025–2035 aimed at strengthening energy sovereignty and repositioning Pemex's finances [5] - The success of this plan will depend on overcoming legal challenges, securing capital, and verifying the performance of revitalized fields in a high-risk environment [5] - The upcoming year will be crucial in determining whether Pemex can halt its production decline through more efficient operations and strategic partnerships [6]