Caption: Mexico’s Secretary of Foreign Affairs Juan Ramon de la Fuente, right, speaks during President Claudia Sheinbaum’s daily press conference at Palacio Nacional in Mexico City on July 31, 2025

 

MEXICO CITY– The Mexican government on Tuesday unveiled a plan to rescue ailing state oil producer Pemex, one of the country’s largest companies, which has accumulated a whopping $100 billion in debt.

The plan comes after warnings from some of Pemex’s suppliers that they are struggling to maintain operations due to a lack of payments from the company.

The program, unveiled by President Claudia Sheinbaum at her daily morning press briefing, aims to reverse a prolonged decline in Pemex’s crude output, blamed on a dwindling supply from aging oil fields and a lack of investment.

It includes the issuing of $12 billion in government bonds to shore up the company’s finances, which had been announced last week.

Sheinbaum estimated that the state will have to prop up the company until 2027, when she anticipated, “Pemex will be able to manage on its own.”

Pemex’s debt shot up from $43.3 billion in 2008 to $105.8 billion in 2018, an increase of 129.5 percent, Finance Minister Edgar Amador told the conference.

Its output meanwhile has more than halved over the past 20 years, dropping from a peak of 3.4 million barrels per day in 2004 to 1.6 million barrels in the second quarter of 2025.

To reverse the decline, Pemex CEO Victor Rodriguez said the company was reactivating production in older oil fields that still have potential.

“We still have vast oil resources that we must take advantage of,” he added.

He also announced plans to extract lithium, a key ingredient in electric car and smartphone batteries, from oil brines, the salty water brought to the surface during oil and gas production.

Amador said that by December he expected Pemex’s debt pile to fall to $88.8 billion. (AFP)