Halliburton Taxes Highlight Private Participation in Mexico’s O&G

Private service companies remain structurally embedded in Mexico’s oil and gas industry, as illustrated by Halliburton’s US$112 million in income taxes paid in 2025, underscoring the sector’s continued reliance on international expertise despite a state-led policy framework centered on PEMEX. This matters as the Sheinbaum administration advances mixed development contracts and legislative reforms to boost production, manage Pemex’s operational constraints, and attract selective private capital while preserving state ownership of hydrocarbons. The evolving hybrid model directly affects PEMEX, global oilfield service providers, upstream investors, and regulators, shaping investment confidence, production capacity, and fiscal revenues in Mexico’s energy market.

Private sector involvement in Mexico’s oil and gas industry remains a focal point of debate, policy evolution, and operational strategy as the state-led model adapts to global market pressures and national production goals. Recent disclosures of Halliburton’s tax contributions in Mexico underscore not only the economic footprint of international service providers, but also the structural role that private participation continues to play in a sector long dominated by PEMEX.

Halliburton reported that in 2025 it paid US$112 million in income taxes in Mexico, making the country the largest foreign tax jurisdiction for the company. This figure formed part of the US$603 million in income taxes paid abroad, out of a total US$639 million globally. Mexico’s share outpaced other major jurisdictions such as Saudi Arabia and the United States, where Halliburton paid US$76 million and US$36 million respectively. The company’s financial results for the year showed a contraction in overall revenues of 3% to US$22.184 billion, while net income fell 49% to US$1.283 billion, affected by extraordinary asset impairment charges.

These fiscal data illustrate how deeply embedded private service providers remain in Mexico’s oil and gas activities, even as the broader policy environment seeks to balance state control with selective private engagement. Service companies such as Halliburton, Schlumberger, Baker Hughes, and Weatherford compete to supply drilling, well services, and technology solutions that PEMEX increasingly relies upon to sustain production levels amid mature fields and limited new discoveries.

The government of President Claudia Sheinbaum has in recent years introduced policy measures intended to renew private sector engagement. Mixed development contracts, a new model that allows private companies to partner with PEMEX while the state retains ownership of resources, have drawn interest from at least 14 firms seeking to collaborate on upstream projects. These contracts are central to efforts to boost oil and gas output through shared risk and capital. At least 11 mixed contracts were announced with production targets that include expanded crude and natural gas output, signalling a practical shift toward hybrid operational frameworks.

The Sheinbaum administration has also proposed legislative reforms to govern private participation in the wider energy sector. New rules would permit private sector involvement in power generation and expand contractual frameworks with PEMEX and CFE while preserving majority state control. These reforms aim to improve operational efficiency, secure financing, and streamline permitting. However, payment delays and outstanding obligations from the NOC to contractors have raised concerns among private service providers, potentially affecting future investment decisions.

Privately held mixed contracts are part of broader efforts to address long-standing production challenges. PEMEX has historically struggled with declining crude output and heavy reliance on imports for natural gas, a situation that private expertise and capital could help ameliorate. Talks about private investment in major fields such as Ixachi and deepwater Zama have gained attention, with international players like Harbour Energy and regional investors exploring joint operating arrangements that could shift operational dynamics while maintaining state ownership.

Despite these developments, private participation beyond services and contractual partnerships remains constrained. Under previous energy reforms in 2013, private and foreign operators were allowed to compete for exploration and production contracts. However, the current policy approach emphasizes PEMEX’s central role, with private firms supporting operations under various collaborative models. This hybrid strategy reflects a cautious balance between opening the industry to investment and protecting national control over strategic resources.

The sustained engagement of private service companies is critical to Mexico’s operational capacity. These firms bring advanced technology, drilling expertise, logistics support, and project management capabilities that help PEMEX operate efficiently in diverse environments, from onshore fields to offshore platforms. Their fiscal contributions, illustrated by Halliburton’s tax payments, also contribute significant revenue to the Mexican treasury, reinforcing the economic rationale for continued private engagement.

Analysts argue that without private participation in services and technical execution, Mexico’s ability to stabilize and rebuild production could be compromised. Industry voices have long called for public-private alliances to expand exploration and production, improve technology transfer, and attract capital that complements Pemex’s balance sheet constraints. Historically, private companies operating in Mexico since the 2013 opening accounted for discoveries, job creation, and incremental production gains, demonstrating the potential benefits of sustained collaboration.

The evolving model of private participation also aligns with broader energy sector reforms that aim to integrate private capital into power generation and energy infrastructure. By allowing private energy contracts under regulated frameworks, the administration seeks to modernize the sector while balancing state participation and private investment. These reforms illustrate how Mexico is navigating complex political, economic, and technical pressures to create a functional ecosystem that leverages private sector strengths without compromising sovereign control over energy assets.

Looking ahead, the trajectory for private participation in Mexico’s oil and gas industry will likely continue along hybrid lines, blending state leadership with targeted private involvement in services, technology, and shared production schemes. Fiscal contributions like those from Halliburton highlight the tangible economic impact of private firms, while mixed contracts and policy reforms signal incremental shifts toward more collaborative industry dynamics. The challenge for policymakers and industry stakeholders will be to sustain investor confidence, ensure regulatory clarity, and align strategic objectives to maximize both state and private sector contributions to Mexico’s energy future.