The Next Chapter of PEMEX-Private Partnerships

Mixed Development contracts are set to become the most consequential instrument for Mexico’s upstream sector over the next six years, following an administration closed to further private development. The new guidelines for Mixed development schemes require PEMEX to retain a minimum participating interest, while allowing private partners to contribute capital, technology or operational capacity. The central policy tradeoff is straightforward: preserving national control of the subsoil while creating clear, bankable economics and enforceable counterparty protections that make long-term investment rational.

The fiscal reality driving the mixed-contract agenda is undeniable. PEMEX entered 2025 with one of the highest debt burdens among oil companies globally and with sizable payment obligations to suppliers. The federal government and financial markets responded with targeted instruments, including a US$12 billion pre-capitalized securities issuance that reduced near-term refinancing pressure, partial funding for upstream investments and supplier payments via the US$13 billion Banobras Investment Fund, and a tender offer of nearly US$10 billion for long-term debt backed by sovereign transfers. However, the company’s leverage and negative free cash flow dynamics remain material constraints on autonomous PEMEX funding for exploration and large-scale development. Any mixed contract that anticipates PEMEX as an active cash contributor must therefore be realistic about when and how the state company will meet capital calls; more credible contracts, and those that will attract international partners, will rely on alternative payment and risk-transfer mechanisms rather than on unconditional PEMEX funding alone.

Structuring mixed contracts to mitigate counterparty risk requires a suite of contractual and financial design choices. Escrowed payment mechanisms, in-kind offtake arrangements, performance-linked disbursements, step-in rights for technical operators, and clear dispute resolution paths are all practicable elements. Sponsors will also evaluate whether contracts permit cost recovery or profit sharing that is visible and predictable. Given global lenders’ and insurers’ sensitivity to sovereign and political risk, attaching guarantees, sovereign or quasi-sovereign wrappers, or multilaterally backed instruments can materially lower the risk premium and unlock export credit or insurance capacity. The new guidelines already contemplate that PEMEX need not always make capital contributions and that private partners can fill funding gaps, but that legal clarity is required on tax treatment, royalty sharing, and PEMEX’s obligations when it acts as a minority or non-funding partner.

The Natural Resource Governance Institute will press on transparency, contract disclosure, and independent auditability so that public interest and investor certainty are aligned. IMP can provide the applied R&D and technical verification needed to quantify reserves, design enhanced recovery trials, and validate engineering schedules that underpin financing models.

Independent operators such as Jaguar E&P and international partners like Harbour Energy are the likely private sponsors who will test these schemes in practice, offering capital, operational capability, and often the technical innovation that PEMEX needs for complex fields. Each actor’s incentives differ, but a successful mixed contract must be reconciled into a single, executable project plan.

Governance and operational integration are set to be core risk mitigants. Contracts must specify data ownership, metadata exchange protocols, audit rights, procurement responsibilities, and escalation procedures for cost overruns or technical disputes. Transparency provisions that publish key project milestones, production and cost metrics, and third-party audits create both reputational benefits and practical investor reassurances. At the policy level, locking in taxation, royalties, and environmental obligations for the life of the project, or at least creating predictable adjustment mechanisms, is essential to avoid the type of retroactive policy risk that deters long-dated capital. The Natural Resource Governance Institute and civil society scrutiny can amplify reputational consequences for opaque deals, which in turn affects access to institutional capital.

ESG considerations are increasingly non-negotiable for the private firms likely to partner with PEMEX. Mixed contracts that embed emissions targets, methane and flaring caps, social investment commitments, community consultation processes, and independent environmental monitoring will be more attractive to international investors and insurers. Technical partners and research bodies such as IMP can codify low-emission development pathways and quantify the incremental capital required for cleaner operations, enabling a transparent tradeoff between near-term returns and longer-term ESG compliance. If Mexico can demonstrate that mixed projects adhere to international ESG norms, it will be easier to source capital at scale and to unlock reinsurance and export credit agency support.

Mixed development contracts must be measured against the alternatives, however. Traditional licensing and farmout regimes offered private operators clearer ownership and often faster decision rights, which attracted aggressive exploration capital in earlier rounds. Mixed contracts trade some of that autonomy for state ownership and policy alignment. They will attract different capital: strategic, patient partners who can work within a joint governance model, bring local content and technical capacity, and accept a proportionate share of commercial upside. If early pilots, such as conversations around Ixachi and other strategic fields, deliver timely payments, transparent governance, and measurable production gains, mixed contracts could reset investor sentiment positively. If instead they become venues for ambiguous governance, delayed payments, or shifting fiscal terms, they will reinforce investor caution.