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Mexico Cuts 2025 Oil Production Forecast Amid Pemex Struggles

Oil and Gas

Business Honor
03 April, 2025

Declining output and financial challenges push Mexico to revise crude oil targets.

Mexico's Finance Ministry lowered its projection of crude oil production in 2025 by 129,000 barrels per day (bpd) from the initial 1.8 million bpd target set by President Claudia Sheinbaum. The new projection now estimates an average production of 1.762 million bpd in 2025 and a slight increase to 1.775 million bpd in 2026.

The downgrade includes reduced-than-expected output at state oil company Pemex, which has been struggling to keep up production even with state subsidies. Pemex averaged 1.619 million bpd for the first two months of 2025, well off target. The government has spent billions on Pemex in recent years, but the company still has high debt levels and operational issues.

As countermeasures for the falling output, Mexico also considers joint ventures with private corporations and new contracts where private players can join in with Pemex to bring in increased production. However, previous energy policy has limited participation by the private sector, and it is still uncertain how much of an uplift these joint ventures can bring promptly.

In November 2024, Mexico's oil and gas output was at its lowest level for the year. Mexico produced 1.747 million bpd of liquid hydrocarbons, which included 1.488 million bpd of crude and 259,000 bpd of condensate. Natural gas production also declined to 3.531 billion cubic feet per day, which suggests broader issues in Mexico's energy sector.

As the country rides out energy problems, President Sheinbaum's administration strives to balance oil production with investments in clean energy. However, Pemex's financial debt burden, outdated oil fields, and infrastructure limitations pose serious challenges toward achieving long-term energy balance.

Mexico's oil industry remains at a crossroads, with choices to be made in the next several months predicted to decide its energy future, as well as its economic resilience.