BANOBRAS to Advance on PEMEX Supplier Debt

The National Works and Public Services Bank (BANOBRAS) announced that it will pay MX$180 billion (US$9.969 billion) of PEMEX debt to suppliers by the end of 2025, a major move aimed at alleviating long-standing financial pressures on the state oil company and supporting broader plans to stabilise its finances and production prospects.

Jorge Alberto Mendoza, Director General, BANOBRAS, confirmed at Encuentro Nacional de Constructores hosted by the Mexican Construction Industry Chamber (CMIC) that payments are progressing as planned. He said the institution will distribute between MX$100 billion and MX$110 billion in December, rounding out the total for the year.

The payments are being made through a specialised investment fund of MX$250 billion established on 5 August 2025 in coordination with the Ministry of Finance. The fund is designed to manage and reduce PEMEX’s supplier-related liabilities while ensuring that pending payments to projects already executed are completed on schedule.

Mendoza explained that as of early December, MX$70 billion had already been paid and additional disbursements are scheduled for Dec. 15 and 30, enabling the full target of MX$180 million to be met before year-end. He also said the fund will continue working into the first quarter of 2026 with another MX$70 million, bringing the total payments to MX$250 million under the programme.

The initiative responds to one of the most intractable problems facing PEMEX and the energy sector: historically large amounts owed to contractors, service providers, and suppliers. According to official financial disclosures, PEMEX’s book debt to suppliers reached a record MX$517.098 billion by 3Q25, a 20% increase compared to 1H25.

That elevated level of supplier debt has frequently drawn criticism from contractors and economic analysts. Industry groups such as CANACINTRA reported that more than 60% of payment obligations owed to its member companies had yet to be settled, with some firms facing potential insolvency due to long delays.

The context for BANOBRAS’ role lies in a broader government effort to stabilise PEMEX’s finances after years of mounting liabilities and declining production. Mexico’s federal authorities created the investment fund to push through payments that PEMEX had accumulated over decades, a situation analysts and executives argue discouraged new investment and complicated the company’s strategic goals.

Financial analysts have repeatedly warned that PEMEX’s heavy debt burden has been a red flag for potential partners in planned mixed contracts and other upstream collaboration schemes aimed at reversing the company’s production decline. According to recent reporting, PEMEX owed nearly US$28 billion to hundreds of suppliers and contractors by September 2025, a factor that has dampened private sector enthusiasm for entering joint ventures.

These concerns are tied to a core objective of Mexico’s energy strategy: raising PEMEX’s crude output from current levels toward a target of around 1.7 to 1.8MMb/d. Efforts to attract investment through mixed contracts have not yet delivered substantial commitments, in part due to lingering doubts about payment reliability.

The BANOBRAS payment plan is also closely linked to Mexico’s Plan Estratégico de Pemex 2025-2035, in which reducing supplier debt and restoring confidence in PEMEX’s financial management are central components. The strategy includes commitments to capital injections, bond restructurings, and other mechanisms intended to strengthen liquidity through 2027, at which point the government hopes PEMEX will be able to finance its own obligations without direct federal support.

Independent organisations have noted that while such financial engineering tools can ease immediate pressures, systemic challenges remain. According to the Mexican Competitiveness Institute (IMCO), a meaningful portion of the existing debt still needs careful differentiation between productive investment and legacy liabilities, and decisions about how to allocate resources will be critical for long-term sustainability.

Supporters of the BANOBRAS initiative argue that reducing outstanding supplier payments will have positive ripple effects throughout the broader Mexican economy. Contractors and small and medium enterprises that suffered from delayed payments have repeatedly warned of financial strain that threatens jobs and regional supply chains. Clearing these arrears is seen as a step toward restoring trust and preserving industrial capacity within the energy sector.

Nonetheless, the challenge of balancing debt reduction with enhanced production and competitiveness remains. The government’s approach, relying on a combination of public funds, financial tools such as bond issuances, and long-term strategic planning, highlights the complexity of managing one of the most indebted oil companies in the world. Recent measures have included international bond sales and domestic fiscal support, reflecting both the size of PEMEX’s liabilities and the political importance placed on stabilising its finances.