Headwinds buffet Pemex’s upstream progress

The NOC had a better financial quarter in Q2 but will likely need significantly more money to hit upstream goals

Mexican state oil company Pemex may have boasted almost $4bn in net income over the past 12 months, but limited capex is making long-term upstream targets look doubtful. And the government’s obsession with the loss-making downstream continues to bite into Pemex’s profits. The NOC is clearly paying some attention to its upstream pledge and is lifting crude production, albeit only marginally. Pemex averaged 1.758mn bl/d for Q2, a 1.3pc jump over Q1 and 3.8pc over Q4 last year. The average price achieved by Mexico’s crude export mix also increased by almost 90pc year-on-year, helping offset some of the company’s recent heavy financial losses. And output from new fields continues to come online.