Mexico’s Energy Sovereignty: The Impact of Unpaid Debt on Oil

Mexico faces the steepest projected oil production collapse in the world. According to the International Energy Agency (IEA), the country could lose up to 680,000 barrels per day of production capacity between 2024 and 2030 — more than any other producer globally. Unless this trend is reversed, Mexico will shift from being a strategic exporter to a net crude oil importer before the decade ends. This downturn is not the result of dwindling reserves or adverse geology, but of a clear and preventable cause: the breakdown of the financial cycle between PEMEX and its supply chain.

As of the end of 1Q25, PEMEX had accumulated over MX$404 billion (US$22 billion) in overdue invoices to suppliers (more than double the amount in 2018), along with an additional MX$50 billion in executed services that remain off the books. This de facto moratorium has idled more than half of the country’s drilling rigs, slashed national oil output by 160,000 barrels per day in just six months, and threatens to derail operational plans for 2026.

What’s at stake is not just the industry’s technical continuity, but Mexico’s ability to uphold energy sovereignty, sustain public revenues, and maintain its geopolitical standing as a reliable oil producer. The only realistic path forward begins with one immediate and verifiable action: restoring supplier payments.

Anatomy of the Debt

PEMEX’s supplier debt has not been reduced, it has merely been reshuffled. Between late 2024 and March 2025, the company’s reported commercial liabilities dropped from MX$505 billion to MX$404.3 billion. However, this apparent reduction did not stem from sustained payment efforts, but from an accounting shift: a large portion of the liability was reclassified as short-term financial debt, which grew by 32% over the same period.

In addition to the recognized debt, over MX$50 billion in executed services still lack COPADE registration. These refer to services duly delivered by contractors, yet still excluded from the formal invoicing system. Without registration, these service orders generate no payment rights, do not appear in financial statements, and have no clear payment horizon. This opacity has pushed dozens of companies into financial distress, cutting off access to credit and forcing them to scale back or suspend operations.

The federal government’s MX$147 billion disbursement in 1Q25 did not resolve the core issue. It covered just one-third of the total liabilities and failed to address the structural conditions that prevent the regular flow of resources. Over MX$268 billion remains unpaid with no defined schedule, while the MX$50 billion in unregistered estimates continue to pile up in administrative limbo.

The absence of a timely payment mechanism is directly linked to the liquidity shortfall in strategic areas. PEMEX’s annual Exploration & Production budget was slashed by an unprecedented 66%, dropping from MX$373 billion to MX$127 billion in 2025. Over half of that amount was spent in Q1 alone. With less than 45% of the year’s budget left, PEMEX has no financial room to settle debts without further halting critical field operations.

Unless the situation changes, the immediate consequence will be a contraction in key technical indicators and a broader erosion of operational capacity. The lack of payments has disrupted work orders, severed supply chains, and weakened commercial relationships with the service providers that sustain daily production.

Investment, maintenance, well interventions, and equipment replacement decisions are no longer guided by technical priorities, but by financial uncertainty. What’s at stake is not just a month’s worth of operations, but the stability of the entire national energy system.

The industry estimates that reactivating suspended infrastructure could take three to five years, with cost overruns exceeding 20% due to asset deterioration, loss of technical capacity, and fragmentation of the supply chain.

This is not a temporary operational backlog — Mexico is undergoing a silent process of energy decapitalization. Every day the issue remains unresolved, the fiscal and technical platform that supports the Mexican state becomes more difficult — and more expensive — to rebuild.

Operational and Economic Impact 

Mexico is at real risk of becoming a net oil importer before the end of this decade. The IEA’s “Oil 2025” report warns that Mexico is on track to register the steepest production decline globally — greater than any OPEC+ member.

Between 2024 and 2030, the country’s oil output could drop by 680,000 barrels per day, bottoming out at just 1.3 million barrels per day. If domestic demand continues its upward trajectory, Mexico may need to import up to 500,000 barrels per day by 2030. This would mark a historic reversal: a country that for decades stood among the world’s top crude exporters is now poised to run a structural deficit in less than five years.

This loss of capacity is not rooted in geology, but in budgetary and financial decisions. The report notes that PEMEX canceled or postponed key investments during the pandemic — partly due to government directives — prioritizing short-cycle output from onshore and shallow-water fields over deepwater reservoir development. That strategy produced a temporary production spike between 2021 and 2023 (driven largely by the Quesqui field), but the growth proved short-lived. Since then, output has entered a structural decline. In the first half of 2025 alone, year-on-year production fell by approximately 160,000 barrels per day.

This downward trend cannot be understood without factoring in the financial paralysis within PEMEX. The company’s liquidity crisis has disrupted regular payments to contractors, directly impacting field operations. The number of active drilling rigs collapsed from 50 in October 2024 to fewer than 20 in the first half of 2025. While some payments have recently resumed — bringing five rigs back online — the structural damage has already been done.

The IEA highlights that over half of Mexico’s current oil production now comes from just seven fields out of a portfolio of 240. This extreme concentration means that any operational failure or maintenance delay can have outsized consequences. Without service contractors to drill, stimulate, repair, and maintain wells, natural decline rates accelerate. And every barrel left in the ground is lost income for a company that no longer generates enough cash flow to cover even its basic operations — let alone its historical debt load.

The outlook for new developments offers little near-term relief. Only one project — Trion, operated by Woodside and slated to start production in 2028 — has secured investment approval. Two other strategic projects, Zama and the Ku-Maloob-Zaap expansion, are still awaiting final authorization. The IEA warns that the window for these fields to meaningfully contribute before 2030 is rapidly closing.

As the evidence shows, the failure to deliver timely payments to the oil field services sector is not merely a financial or accounting issue. It is the root cause of drilling activity collapse, stalled development projects, faster decline in producing fields, and ultimately, the erosion of Mexico’s energy sovereignty. If the commercial standstill is not reversed before the second half of 2025, Mexico could lose production and relinquish the geopolitical role it held for decades as a reliable energy exporter.

A Minimal Certainty Agenda

The operational paralysis in Mexico’s energy sector demands action, not rhetoric. The collapse in drilling activity, production losses documented by the IEA, and the real risk of Mexico becoming a net oil importer this decade are not projections, they are direct consequences of halted payments to the service chain.

In response, AMESPAC proposes three concrete, financially viable, and immediately actionable steps:

1. Immediately release all certified invoices for services delivered in 2024;

2. Ensure all 2025 invoices are processed and paid in line with contractual terms; and

3. Establish a public, fixed-schedule program to fully settle historical debts with service providers in cash.

These measures would bring idle rigs back online, rebuild supply chains, and recover much of PEMEX’s deferred maintenance capacity.

With predictable cash flows, contractors could resume operations under standard technical cycles, helping stabilize national output. Just as crucially, it would restore supplier and lender confidence, interrupting the downward spiral that threatens PEMEX’s 2026 balance sheet.

Reestablishing cash flow across the service chain is not goodwill, it is the baseline condition for the energy system to function.

If PEMEX and financial authorities move quickly, they can halt further operational decline and prevent maintenance backlogs from compromising production in 2026.

A working group between PEMEX, regulators, and industry would help align payment targets, certify contractual progress, and send clear normalization signals to markets, lenders, and institutions.

Each week of delay raises restart costs, drains SME capital, and weakens the fiscal base sustaining the Mexican state. A firm decision to normalize payments would not only preserve barrels and jobs, it would reclaim the technical and operational strength of a proven service chain. The industry is ready. 

The industry stands ready not for promises, but for the financial certainty it needs to do what it does best: safeguard Mexico’s energy sovereignty.