I hope not to disappoint or upset anyone, but Pemex has never been a great company. It did grow very large, but that’s all. It was founded a few years before the expropriation, and it took over the assets seized. For the next 30 years, it produced roughly enough to cover the consumption of a country just beginning to industrialize, but by the late 1960s it was already necessary to import oil.
Things changed with the 1973 oil embargo, which significantly increased crude prices and made it possible to explore and exploit regions that had previously been unprofitable. That’s what López Obrador saw in his youth, and from then on he clung to the idea that oil was a source of wealth. In reality, what put Mexico on the world map was the discovery of Cantarell, then the second-largest oil field in the world. That saved López Portillo from Echeverría’s mistakes but enabled his own. Later, it saved De la Madrid from having to fully confront a dysfunctional system, thereby perpetuating the old regime and laying the groundwork for its eventual return.
Cantarell began its decline in January 2004, which exposed the inefficiencies of the state-owned company. Refining losses, previously offset by the hefty profits from extraction, started to weigh more heavily. Added to those losses were the explosion in retirements and the need for reserves to cover them, making Pemex unviable. That’s why a reform was promoted under Calderón—blocked by the PRI—and later another under Peña Nieto, which was approved thanks to the “Pacto por México.”
The goal was to widen exploration and extraction efforts (since Pemex could not handle it all), stabilize employee reserves, and eliminate losses in subsidiaries, especially refining. To achieve this, it was necessary to assume additional debt and provide Pemex with support, which was done in 2016.
In other words, the Pemex López Obrador inherited no longer carried a crushing pension burden, no longer lost money in refining, and already had competitors who, incidentally, paid the government more per barrel extracted than Pemex did. That was what López destroyed. Under his administration, the cost of the collective bargaining agreement rose (though not drastically); opportunities for private companies were shut down, concentrating oil rent in Pemex, which was incapable of being efficient; but the real tragedy was the obsession with refining in Mexico.
From 2016 to 2018, for the first time in decades, there were no losses in refining. Profits were minimal, but at least there were no losses. From 2018 to 2024, thanks to the stubborn push for refining, operating losses in refining totaled 1.1 trillion pesos, and net losses reached 1.4 trillion. In today’s dollars, that’s $60 billion and $73 billion, respectively.
During that same period, short-term debt rose by $37 billion, $25 billion of which was owed to suppliers. That’s where the $100 billion urgently needed now comes from. Long-term debt didn’t rise because no one was willing to lend to Pemex at reasonable rates, so the company decided to finance itself through its suppliers. The destruction this caused explains, at least in part, the collapse in crude production that has reduced government revenue. They lost the ability to collect from private companies and destroyed Pemex’s payment capacity, but claim that everything will be resolved next year—because, of course, it’s all the “neoliberals’” fault.
They are incompetent, deceitful, and cynical.