Mexico’s state oil company, Pemex, is having trouble attracting private firms to partner with it on projects to boost the country’s oil production due to fears that it will not be able to pay. Pemex is the most heavily indebted company in the world: In September it said it owes hundreds of suppliers a total of $28 billion.
In February 2023, WPR columnist James Bosworth examined Pemex’s problems, which go beyond debt. The company’s oil production has fallen over the past decade and even during periods of high oil prices when private oil companies have made significant profits, Pemex has operated at a loss. Former President Andres Manuel Lopez Obrador, who chipped away at reforms by his predecessor to allow private sector oil companies to operate in the country, largely failed to revive Pemex.
“It’s notable that for all of AMLO’s energy nationalism, including efforts to rig the markets in favor of the state-owned firm and hamper efforts by the private sector to compete, Pemex is still barely limping along,” Bosworth wrote. “Most countries with large oil reserves and national oil companies at least profit from them.” It remains to be seen whether current President Claudia Sheinbaum, who belongs to the same political party as her predecessor, will be able to turn things around.
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