National Oil Company Profile: Pemex
Highlights
- The quantity of oil and gas produced by Pemex has been in decline since 2005. At current production rates and without further discoveries, Pemex’s oil reserves will be depleted by 2030.
- Because of Pemex’s high production costs, 38 percent of its investment pipeline over the next ten years is unlikely to break even in a moderate energy transition scenario (20). (See the end of this profile for an explanation of the transition scenarios NRGI uses.)
- Pemex has stated an “ambition” to reach net-zero emissions by 2050. However its emissions, particularly of methane, have risen since 2018 even as production has fallen.
- The Mexican government relies on the oil and gas sector for 7 percent of its revenues; 90 percent of oil and gas revenues are at risk in a moderate transition scenario.
- Last updated: August 2024
Key statistics
| Climate impacts: potential scope 3 emissions from reserves (proved, 1P) (1) | 504 Mt CO₂e |
| Home country income level (2) | Upper-middle income |
| Equitable phase-out responsibility (11) | by 2037 |
| Company transition risk: share of investment that does not break even in a moderate transition scenario (1;20) | 38% |
| Government revenues from oil and gas at risk in a moderate transition scenario, as share of current oil and gas government revenue (8) | 90% |
| Current share of total government revenue from oil and gas (8) | 7% |
Company governance
To counter perceptions that international oil companies were exploiting Mexico, in 1938 the country’s government nationalized the sector and established Pemex. Mexico was the first country to establish a national oil company (NOC) through its constitution. Because of this legal arrangement, Pemex still has the structure of a state-owned enterprise and is not listed on stock exchanges. The Mexican government is the sole owner of the company.
Pemex is an integrated group engaged in oil and gas exploration, production, refining and transport, as well as petrochemicals. It is fully owned by the Mexican government and explores for and produces oil and gas in Mexico only.
Mexico’s President Claudia Sheinbaum, herself an energy engineer and climate scientist, appointed Víctor Rodríguez Padilla as CEO. Padilla is an energy expert that aims to stabilize oil production at 1.8 million barrels per day, while diversifying energy sources and advancing the clean energy transition in Mexico (21;22).
The company’s board consists of ten councillors, of which five are independent. The CEO is chosen based on the indication of the president of Mexico. Pemex directly employs about 129,000 people, highlighting the need for the company to consider the implications of the energy transition for workers and communities.
Pemex does not provide sufficient information to establish environmental, social and governance (ESG) indicators. However, Mexico’s Resource Governance Index score (which measures transparency and accountability) is well above regional and global averages for fossil fuel producing countries.
| Founded in (5) | 1938 |
| Listed on exchange (5) | No |
| NOC share in the country’s total oil production (3) | 96% |
| NOC share in the country’s total gas production (3) | 95% |
| NOC ownership share of the country’s oil reserves (3) | 81% |
| Employment (3) | 128,616 |
| OPEC member country (15) | No |
| International exploration and production operations (1;5) | No |
| Subsidiaries (5) | 70 (non-extractive) subsidiaries in 9 countries. |
Environmental, social and governance performance
| Company | ESG score (5) | Environmental score (5) | Social score (5) | Governance score (5) | Resource Governance Index score (15) | |
| Pemex | Mexico | N/A | N/A | N/A | N/A | 71 |
| Petrobras | Brazil | 75 | 62 | 90 | 68 | 71 |
| YPF | Argentina | 71 | 63 | 67 | 89 | 57 |
| Latin America average | 72 | 61 | 77 | 76 | 59 | |
| Global average | 66 | 68 | 66 | 64 | 52 | |
Ownership
| Government of Mexico | 100% |
Source: (5)
Reserves and production
Pemex oil and gas production rapidly declined from 2005 to 2018. Despite a small reversal in the last six years, Rystad Energy expects this decline to continue, even in scenarios assuming a long-term expansion in global demand. At current production rates, current oil reserves will only last for six years, and gas for seven years.
Reserves quoted here are “proved”/ 1P, the most certain measure of reserves.
Source: 1, 3
| Refining capacity (bpd) (14) | 1,980,000 |
| Pipeline capacity (bpd) | N/A |
| Oil reserves of NOC (million boe) (1) | 4115 |
| Oil reserves of NOC / reserves of country (1) | 81% |
| Years of oil reserves left at current production (1) | ~ 6 |
| Gas reserves of NOC (million boe) (1) | 1,119 |
| Gas reserves of NOC / reserves of country (1) | 95% |
| Years of gas reserves left at current production (1) | ~ 7 |
Transition and other economic risks
Pemex’s transfers to the Mexican government have fallen in recent years. When accounting for the financial support the government gives the company, net transfers to the government have fallen more substantially (25).
Transfers to government from the oil and gas industry would fall by 90 percent in a moderate transition scenario. However, while this seems significant, transfers from the oil and gas industry to the government currently constitute only seven percent of Mexico’s government budget, and the five percent of the country’s exports are crude oil exports. This compares with an average of 27 percent for Latin American oil- and gas-producing countries.
Economic dependence on fossil fuel revenues and exports
| Indicator | 2013-2017 | 2018-2022 |
| NOC transfers to government / total fiscal revenue (3;1) | 12.4% | 7.4% |
| Crude oil export revenues / country’s export revenues (17;19) | 7% | 5% |
| Gas export revenues / country’s export revenues (17;19) | 0% | 0% |
Government revenues at risk in the transition
| Government revenues from oil and gas at risk in a moderate transition scenario, as a share of current government oil and gas revenue (8) | Oil and gas revenue as a share of total government revenue (8) | |
| Mexico | 90% | 7% |
| Suriname | 1% | 11% |
| Colombia | 83% | 5% |
| Regional average | 70% | 27% |
| Global average | 56% | 44% |
Mexico’s and Pemex’s credit ratings
| Fitch (5) | Moody’s (5) | S&P (5) | |
| Mexico | BBB- | Baa2 | BBB |
| Pemex | B+ | N/A | BBB |
Pemex financial performance
| Company | Country | Liquidity: Current ratio (1;3) | Efficiency and profits: Return on capital employed (1;3) | Indebtedness: Leverage (1;3) |
| Pemex | Mexico | 10% | 17% | 161% |
| Petrobras | Brazil | 39% | 13% | 51% |
| PDVSA | Venezuela | N/A | N/A | N/A |
| Regional median | 22% | 19% | 44% | |
| Global median | 30% | 15% | 30% | |
| Global average | 42% | 20% | 36% | |
Investment value at risk in different energy transition scenarios
Source: (1;20)
In NRGI’s moderate transition scenario, 38 percent of Pemex’s investment pipeline does not break even. Pemex’s investments are the second most exposed in the region.
Even in a slow scenario, many of Pemex’s major projects (including Ku-Maloob-Zaap; Tamaulipas and Constituciones; and its largest project by capital investment: Trion) do not break even. The rest of Pemex’s major projects break even in a moderate transition scenario but not in a fast scenario.
Given Pemex’s financial position, its ability to withstand a moderately paced transition is questionable (26). Pemex is one of the most indebted oil and gas companies in the world, with a debt to asset ratio of 161 percent, more than four times the global average (3).
Despite Pemex’s high exposure to transition risk, the company has not divested from high-cost upstream assets and continues to expand upstream developments. Pemex has explored carbon capture and storage, but it has not implemented this solution. Pemex has not invested significantly in renewable energy.
Although the NOC has set an ambition to reach net-zero scope 1 and 2 emissions by 2050, Pemex’s emissions intensity increased from 2017 to 2021. Furthermore, while the company engages with workers and trade unions, it has not specifically committed to a just transition and decent alternative jobs for workers.
Sources: (12;13;14)
Energy security
Mexico is not self-sufficient in gas, importing over half of its supply, nor in refined oil products. Its oil reserves are expected to last only six years at current rates of production. The country’s power system sources only 20 percent of its electricity from renewables (4). These factors indicate an insecure energy situation for the country.
| Refining throughput of NOC / final country consumption of oil products (6) | 66% |
| Years of oil reserves left at current production (1) | ~ 6 |
| Years of gas reserves left at current production (1) | ~ 7 |
| Crude oil and refined oil product imports / national consumption of oil products (4) | 66% |
| Share of oil and gas in primary energy consumption of country (4) | 66% |
| Gas imports / country supply of gas (4) | 56% |
| Share of electricity production of country from renewables (4) | 20% |
Climate impacts and greenhouse gas emissions
Pemex has committed multiple times to reduce its emissions, backed by legal requirements, yet the company has failed to meet these commitments. Increasing emissions are more likely than ever to have consequences for Pemex. Changing capital market preferences, increased scrutiny in consumer markets, and the continued rise of carbon pricing mean that excessive emissions will be costly for the company. (27)
| NOC emissions reduction target, scope 3 emissions | N/A |
| Annual scope 1 and 2 emissions of NOC (28) | 2 gigatons CO₂e |
| Average GHG emitted before combustion per barrel of oil produced by companies in country (9) | 85 kg CO₂e / boe |
| Average GHG emitted before combustion per boe of gas produced by companies in country (9) | 137 kg CO₂e / boe |
| OGDC member company (24) | No |
| NOC net-zero ambition, scope 1 and 2 emissions (5) | 2050 |
| Total potential emissions (scope 1-3) from reserves (1;9) | 504 Mt CO₂e |
| Equitable phase-out responsibility of the country (11) | 2037 |
Energy transition scenarios
We use four energy transition scenarios:
Fast. We based this scenario on the oil and gas demand estimated in the International Energy Agency’s (IEA) Net Zero Emissions by 2050 Scenario, which maps out a transition pathway that would limit global warming to 1.5° C. This assumes large-scale negative emissions enabled by technologies such as carbon capture and storage.
Moderate. We based this scenario on the IEA’s Announced Pledges Scenario which assumes the full and timely implementation of national energy and climate goals, including net zero emissions targets.
Slow. We based this scenario on the IEA’s Stated Policies Scenario which assume governments follow their current set of energy and climate policies.
Expansion. We based this scenario on the Organization of Petroleum Exporting Countries’ (OPEC) scenario which assumes a continued expansion in demand up to 2045.
Sources
All data are from the latest year available as referenced as of August 2024. For most data this is 2024. Data related to emissions and NOC finances are from 2023 or, in some cases, 2022. Data on country-level oil reserves and production, the ownership of oil reserves, employment, and energy security is from 2022. Resource Governance Index score is from 2021. If you find an error, please email [email protected]
Definition and explanation of all variables is available in the accompanying guide.
- Rystad Energy UCube, 2024 (proprietary data)
- World Bank, 2024
- NOC Database, 2023
- International Energy Agency (IEA), 2024
- S&P Global IQ, 2024 (proprietary data)
- Statistical Review of World Energy, 2024
- Euromonitor, 2023
- Carbon Tracker, 2023
- Fossil Fuel Registry, 2023
- The Oil and Gas Climate Initiative, 2024
- An Equitable Phase Out of Fossil Fuel Extraction (Equity Review), 2023
- Facing the Future (NRGI), 2023
- World Benchmarking Alliance, 2023
- US Energy Information Administration, 2024
- Resource Governance Index (NRGI), 2024
- OPEC, 2024
- UN Comtrade, 2024
- Global Oil & Gas Exit List, 2024
- World Bank, 2024
- Riskier Bets, Smaller Pockets (NRGI), 2023
- Mexico Daily Post, 2024
- El Financiero, 2024
- Center on Global Energy Policy, 2021
- Oil & Gas Decarbonization Charter (OGDC), 2024
- CIEP, 2024
- Pemex y la transición energética: respuestas oportunas a retos crecientes (NRGI), 2024
- Closing Implementation Gaps: Recommendations for Pemex to Meet its Emission Reduction Goals (NRGI), 2024
- Pemex, 2023
Authors
David Manley
Lead Economic Analyst – Energy Transition
Andrea Furnaro
Senior Policy Analyst
Christopher Olk
Contributor
Giovanni Tagliani
Contributor