Mexico faces high costs and technical hurdles in energy production goals

Mexico faces significant energy security challenges due to a heavy reliance on imports and low diversity in its energy mix. An assessment by the International Institute for Sustainable Development (IISD) suggests that the Mexican government’s strategy to increase domestic oil and gas production may be misguided. Achieving current production targets would require approximately USD 160 billion in capital expenditure, with nearly USD 110 billion required from Pemex alone. The IISD warns that developing uncommercial fields could result in net losses of USD 17.4 billion over 15 years.

Technical experts at UNAM have noted that while Mexico could potentially achieve diesel self-sufficiency, reaching gasoline self-sufficiency remains a difficult challenge. Current refining infrastructure is often better suited for specific crude types, and the country frequently exports light crudes while needing to import others to maintain optimal refinery yields. Furthermore, oil production has seen a decline in drilling activity, with the number of active wells decreasing significantly over recent years, leading to concerns regarding the depletion of existing reservoirs.