Background on Pemex and its Significance
Petróleos Mexicanos (Pemex) is the state-owned Mexican petroleum company, responsible for exploration, production, refining, and marketing of petroleum and petrochemical products in Mexico. As the country’s primary energy provider, Pemex plays a crucial role in Mexico’s economy and energy security. Its performance directly impacts the nation’s oil production, government revenue, and the livelihoods of millions of Mexicans.
First Quarter 2025 Performance
During the first quarter of 2025, Pemex completed drilling 12 development wells and five exploratory ones, totaling 17 wells. This marks the lowest number of well completions for any comparable quarter since 1995, when Pemex also finished 17 wells.
Decline in Well Completion and Production
The current well completion figure is less than half of the 41 wells completed in the previous year and only about a third of the 68 wells drilled during Q1 2020, which was the highest level reached in recent years.
Simultaneously, Pemex has experienced a significant drop in liquid hydrocarbon production (crude and condensates). In Q1 2025, production fell by 11.3%, equating to a decrease of more than 200,000 barrels per day. This left the daily output at one million 615 thousand liters, the lowest level reported by Pemex since 1979.
Challenges Faced by Pemex
Pemex’s financial difficulties have led to delays in paying overdue bills to suppliers and service providers, including drilling contractors. This situation has further exacerbated the company’s operational challenges.
Factors Affecting Production
In its financial report for Q1, Pemex acknowledged delayed well completions as one reason for the production decline.
Although Pemex did not explicitly state that supplier payment issues were a primary cause, business leaders in Mexico’s petroleum regions have reported that these payment problems have disrupted the services they provide to the state-owned petroleum company.
Pemex attributed the production variation mainly to mature field natural decline, technical complexity-related drilling delays, lower initial yields in certain areas (like Xanab), equipment failures in pumping systems (such as Ayatsil), infrastructure delays at sea, critical service suspensions in Yaxché, and adverse weather conditions in offshore areas.
Reduced Drilling Equipment Operation
Pemex operated only 26 drilling rigs during January to March – 11 for development and 15 for exploration. This figure is less than half the 50 active rigs during the same period in 2024, which consisted of 39 development rigs and 21 exploration rigs.
Key Questions and Answers
- What is Pemex? Petróleos Mexicanos (Pemex) is the state-owned petroleum company of Mexico, responsible for exploration, production, refining, and marketing of petroleum and petrochemical products.
- Why is Pemex’s performance important? As Mexico’s primary energy provider, Pemex significantly impacts the nation’s oil production, government revenue, and the livelihoods of millions of Mexicans.
- What challenges is Pemex facing? Pemex is dealing with financial difficulties that have led to delays in paying overdue bills to suppliers and service providers, including drilling contractors.
- What factors contributed to the decline in production? Factors include mature field natural decline, technical complexity-related drilling delays, lower initial yields in certain areas, equipment failures, infrastructure delays, critical service suspensions, and adverse weather conditions.
- How many wells did Pemex complete in Q1 2025? Pemex completed a total of 17 wells (12 development and 5 exploratory) in Q1 2025, the lowest number since 1995.
- What was the production decline percentage in Q1 2025? Pemex’s liquid hydrocarbon production fell by 11.3% in Q1 2025.
