Pemex treading a tightrope

Mexican producer must weigh ambitious upstream strategy with rapidly rising debt

Striking the right balance in Mexico’s upstream between expectation and reality has been a challenge for President Andres Lopez Obrador. His efforts to halt years of declining crude production started to bear fruit in mid-2019, only to be knocked off-course by the pandemic. But overly ambitious targets have often been missed, and the financial burden on state oil firm Pemex is starting to mount. The Mexican NOC ended last year with a massive MXN481bn ($22.6bn) net income loss, driven mainly by crude prices plummeting by 36pc. Most notably, the NOC increased its hefty debt pile by 14pc, reaching $113.2bn at year-end. By comparison, Brazilian peer Petrobras has paid down $35bn since its debt t