More than a month has passed since Pemex CEO Victor Rodriguez invited national and foreign enterprises to join Mexico’s state-owned oil company in restarting production.

At an energy event in Mexico City on October 23, Rodriguez made a direct appeal: Pemex was “open,” he remarked, encouraging corporations to submit bids.

However, the call has mostly gone unanswered. Industry leaders have shown little enthusiasm for participating in projects aimed at helping Pemex recover from its decreasing output.

The lack of cooperation underscores a larger issue that has long plagued potential partners: Pemex’s massive indebtedness and strict partnership criteria.

Debt burden undermines confidence

Pemex’s financial difficulties are generally acknowledged throughout the sector. The business, the world’s most indebted oil producer, reported in September that it owed $28 billion to numerous suppliers.

Companies such as Eni, SLB, and Baker Hughes were identified as unpaid creditors earlier this year.

Mexican enterprises, including Grupo Carso and Hokchi, the country’s second-largest private oil producer, have also claimed Pemex owes them money.

The accumulation of outstanding invoices is lowering interest. Four industry insiders said foreign oil corporations are growing concerned that Pemex will not pay them on time.

Their fears jeopardise the company’s goal of increasing production to 1.7 million barrels per day.

One senior official from an international oil business in Mexico expressed worries about Pemex’s ability to meet its pledges, saying that paying suppliers “remains an issue.”

Pemex has made some payments: Rodriguez told Congress in October that the firm has paid more than $16.3 billion since President Claudia Sheinbaum took office in October 2024.

Still, it is unclear how much the company still owes, which has done little to alleviate potential partners’ concerns.

A crucial test for Mexico’s energy policy

The need to attract partners is becoming more pressing due to Pemex’s shrinking production over the past two decades. The stakes for Mexico are high, given that the government relies on tax receipts from Pemex.

The quest to win collaboration agreements is also a significant test of Sheinbaum’s overall vision for Mexico’s energy sector.

Her Morena party has essentially reversed the broad changes enacted in 2013 by previous President Enrique Peña Nieto, which opened the sector to international investment.

Pemex is now seeking to sell the belief for investors to participate in 21 new joint contracts covering shallow water, deepwater and onshore fields.

The company said such projects may one day provide 450,000 barrels per day of crude, about a quarter of what it is expected to deliver in 2033.

However, all contracts must reserve for Pemex at least 40% of equity, a requirement which is turning out to be a considerable obstacle, according to industry watchers.

Unattractive terms and lingering doubts

Pemex’s most recent 10-year strategic plan underlined the importance of joint venture contracts in improving output.

Major projects such as Kayab-Pit-Utsil, Nobilis-Maximino, and Exploratus were projected to make significant contributions.

Angel Cid, the head of Pemex’s exploration and production business, stated in late October that 40 companies had shown an interest in bidding.

No further information was offered, and industry sources questioned how many of these companies would proceed given the constraints.

According to a senior government official, some projects may fail to recruit partners due to the legal constraints, particularly Pemex’s requirement to keep at least a 40% ownership.

Executives who attended the October gathering with Rodriguez agreed that Pemex’s inability to pay suppliers remains a big concern.

Rafael Espino, director of the oil services association Amespac, stated that when supply contracts are not met, productivity falls. He added that, despite recent advances, it is still unclear how past debt will be handled.

Waiting for concessions

According to three industry sources, corporations are watching attentively to see if Pemex will change its contract model to attract private investment. Uncertainty reigns supreme for the time being.

As one insider stated, “It remains to be seen what will happen.”

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