Mexico’s state-owned Pemex is bracing for significant financial impacts from lower fuel demand in the next decade, driven by the global energy transition, leading it to make plans to adapt and diversify its operations.

Antonio Gozain, Argus Media

MEXICO CITY
EnmergiesNet.com 07 11 2024

Pemex expects reduced demand for oil products, increased volatility in oil and gas prices, and a decline in available capital for oil sector investments, according to its recently released Climate Risk Report.

Pemex also foresees potential restrictions on oil exploration and a gradual elimination of fossil fuel subsidies from the Mexican government, further complicating its financial outlook.

The company’s sustainability plan identifies the transition risk as having the highest material impact, “significantly affecting” its long-term income.

Public policies promoting transportation electrification and private-sector initiatives boosted by car makers are expected to reduce oil demand, especially by the mid-2030s, according to Pemex.

Pemex must adapt to these changes, according to chief executive Octavio Romero, and is exploring opportunities in carbon capture and storage, green hydrogen production, clean energy generation, and biofuels.

But Mexican president-elect Claudia Sheinbaum has pledged to continue Pemex’s focus on increasing refining capacity, building on the more than $30bn the current administration has invested in Pemex’s refining capacities since 2019. This includes maintenance of the national refining system, the construction of the new 340,000 b/d Olmeca refinery, and the construction of two coking units at the Salina Cruz and Tula refineries.

argusmedia.com 07 10 2024