The Mexican state-owned company Petróleos Mexicanos (Pemex) stands out among its state peers, with a workforce of approximately 128,000 people. Currently, the amount of crude oil that Pemex extracts per employee has fallen to less than 14 barrels per day, being the lowest figure among Latin American state producers, except for Petróleos de Venezuela. In an attempt to reverse this trend, former president AMLO proposed an ambitious plan of 13.8 billion dollars to boost production in 23 new wells.
According to Pablo Medina, co-founder of Welligence, while some measures have managed to marginally increase production, most have been a failure. For example, the Olmeca refinery in Dos Bocas only processed 25% of its total capacity of 340,000 barrels per day in August and has recently completely shut down its operations due to technical problems.
Pemex's problems include a debt of 100 billion dollars, inefficient drilling platforms, poor safety and environmental records, and unprofitable refineries. The state-owned company refuses to comment on this matter.
During his term, former president Andrés Manuel López Obrador injected up to 80 billion dollars into Pemex through capital injections and tax exemptions. Pemex's finances are closely tied to those of Mexico, meaning that fixing the oil company's issues will be crucial for current president Claudia Sheinbaum's efforts on other fronts, such as fighting crime and growing the economy.
Víctor Rodríguez, Pemex's new CEO, faces the challenge of improving the company's efficiency and reducing its massive debt. Pemex's inefficiency is reflected in comparisons with other oil companies, such as Saudi Aramco, which extracts significantly more oil with a similar workforce. Pemex's inefficiency is also evident in its high number of unionized employees, the lack of workforce reduction despite the drop in production, and safety and workplace accident issues.
Analysts suggest that Pemex should reduce its size and focus on its strengths, such as onshore and shallow water drilling. Additionally, there is a need to modernize the company's old refineries and seek partnerships with the private sector to improve efficiency and extract value more effectively. Pemex's inefficiency and problems represent a significant challenge not only for the company and its bondholders but also for Mexico as a whole.
