Mexico’s Production Goals Require Almost $110 Billion from Pemex
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Mexico currently relies on imports for two-thirds of its energy consumption, leaving the country vulnerable despite its abundant natural resources. A recent report from the International Institute for Sustainable Development (IISD) suggests that expanding domestic oil and gas production is not the solution to Mexico’s energy insecurity. Instead, the report recommends directing limited capital toward renewable energy and grid infrastructure.
The nation’s energy system suffers from a lack of diversity and critically low reserves, holding just 2.4 days of natural gas storage capacity. To address these vulnerabilities, the Mexican government has aimed to boost oil and gas production and refining. However, the IISD cautions that this strategy requires significant financial resources for minimal security returns.
Reaching the government’s fossil fuel output targets would require roughly $160 billion in capital expenditure, with state oil company Pemex responsible for nearly $110 billion. The report notes that spending on uncommercial fields could lead to $17.4 billion in net losses over 15 years, without guaranteeing that production goals will be met on schedule.
Environmental groups have also raised concerns over a two-year partnership established between Pemex and Brazil’s Petrobras to explore deepwater fields in the Gulf of Mexico. Critics warn that the project poses risks of oil spills, threatens coastal communities, and could undermine national decarbonization goals.
The IISD advises Mexico to prioritize investments in a resilient energy system by upgrading power grids, expanding distributed solar projects, and increasing energy storage capacity. According to the report’s authors, shifting capital to clean power offers a more economically viable path to reducing imports, strengthening energy sovereignty, and attracting private capital compared to high-risk oil and gas ventures.
