Pemex Needs Nearly $110 Billion to Hit Mexico's Output Targets
Russia, Germany Add Diesel Supply as Fuel Market Scrambles for Barrels Haley Zaremba is an energy journalist and researcher with more than a decade of professional experience covering global energy systems, land and natural resources, and… Mexico is dependent on oil and gas imports for two-thirds of its energy consumption, despite the fact that the country has abundant domestic fossil fuel resources.
But instead of exploiting its own producing power to the greatest potential, Mexico relies on its neighbor to the north for the majority of its energy needs, leaving it in a vulnerable position.
However, the answer to Mexico’s energy insecurity is not building up more domestic oil and gas production and refining capacity, according to arecent assessmentfrom the International Institute for Sustainable Development (IISD).
Rather, the report argues, the country’s limited resources would be far better spent on diversifying its energy sector through the expansion of renewable energies and supportive infrastructure.
Mexico’s energy vulnerabilities stem from more than just its reliance on the United States to keep the lights on.
The country has concerningly low levels of diversity in its energy mix, andextremelyconcerning reserves of those energy resources it does rely on.
At present, the country has just2.4 days’ worth of gas storage capacity, leaving Mexico extremely exposed to shocks in supply or market volatility.
The Mexican government has responded to these pressing vulnerabilities by working to significantly increase national energy output, and especially oil and gas production and refining capacities.
However, the IISD argues that this strategy is misguided.
“Domestic oil and gas production targets would come at very high costs and produce limited energy security gains,” the IISD wrote in apress releaseaccompanying the report.
“Pursuing the government’s current oil and gas production targets would require around USD 160 billion in capital expenditure—including nearly USD 110 billion from Pemex—while developing uncommercial fields that could generate net losses of USD 17.4 billion over 15 years,” the press release goes on to summarize.
“Even with this level of spending, production targets may not be met within the planned timeframe.” Moreover, Mexico’s development of its oil and gas sector would come at a major cost to the climate as well as the environment.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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