Key facts
- Pemex needs nearly $110 billion in capital expenditure to meet Mexico's oil and gas production targets.
- Mexico relies on imports for two-thirds of its energy consumption.
- Mexico has only 2.4 days' worth of gas storage capacity.
- Developing uncommercial oil fields could result in net losses of $17.4 billion over 15 years, according to the IISD.
- A partnership between Petrobras and Pemex aims to explore oilfields in the Gulf of Mexico.
Mexico faces significant energy vulnerabilities due to its heavy reliance on oil and gas imports, particularly from the United States, and its limited domestic storage capacity. Despite possessing abundant fossil fuel resources, the country imports two-thirds of its energy needs.
A recent assessment by the International Institute for Sustainable Development (IISD) argues that Mexico's strategy to boost domestic oil and gas production and refining capacity is misguided. The report suggests that pursuing these targets would require approximately $160 billion in capital expenditure, with Pemex needing nearly $110 billion, and could lead to net losses of $17.4 billion over 15 years from developing uncommercial fields. Furthermore, the IISD contends that these efforts may not meet production targets within the planned timeframe and come at a significant environmental cost.
Environmentalists have also voiced concerns about a recent partnership between Brazil's Petrobras and Mexico's Pemex to explore oilfields in the Gulf of Mexico, warning of potential derailment of decarbonization commitments and increased risk of oil spills. Renata Terrazas of Oceana questioned the cost and transparency of Mexico's efforts to increase oil production.
The IISD recommends that Mexico prioritize investment in renewable energies, such as distributed solar power, and supportive infrastructure, including energy grids and transmission systems, and increase energy storage capacities. Luis Martínez, a co-author of the report, stated that investing in renewables can cut imports, strengthen sovereignty, and attract private capital, contrasting with the risks of investing in uncommercial oil fields.