PEMEX Production Hits Decades Low

PEMEX ended 2025 with total oil production (crude plus condensates) of 1.635MMb/d, marking a 7% decline year on year and the lowest level reported in 46 years. The data, published by the NOC, underscores deepening challenges for Mexico’s oil sector as it struggles to reverse long-term declines in output amid operational and financial constraints.

PEMEX’s Strategic Plan 2025–2035 sets a goal of reaching 1.8MMb/d in total liquids production, and the company has set a 2026 target of 1.794MMb/d, nearly 160Mb/d above the 2025 average. Achieving this will require reversing persistent declines and accelerating output additions that have eluded PEMEX for years.

Despite sustained investment aimed at slowing reservoir decline, total liquids output has fallen 10.8% since 2018, when production was 1.83MMb/d, the first full year of the current presidential administration. Over the past decade, including the period when private upstream operators began producing under contractual arrangements, PEMEX’s liquids production has slipped 28%.

Crude Production Decline Even Steeper

When isolating crude oil alone, the drop is more pronounced. In 2025, PEMEX’s crude averaged 1.367MMb/d, a 7.9% decrease compared with 2024. Relative to 2018, crude output has fallen 24.6% from 1.813MMb/d, and compared with 2015 levels of 2.266MMb/d, the reduction reaches nearly 40%. This consistent downward trend highlights the difficulty of offsetting natural reservoir decline with new projects.

PEMEX began reporting condensates separately in 2018 to provide greater transparency on its liquids mix. Condensates, higher-value liquids associated with certain fields, helped support total liquids reporting but also face production pressures. In 2025 they averaged 267.867Mb/d, a 2.3% decline year on year and the first annual drop in seven years.

PEMEX’s Director General Víctor Rodríguez has acknowledged that the era of giant fields underpinning Mexican oil production is drawing to a close. In response, he has emphasized diversification across more fields and plays, including onshore developments and deeper investments in smaller, more technically complex assets. This approach is part of the broader Strategic Plan to stabilize output through portfolio diversification.

Mexico Business News has previously highlighted the broader context surrounding this shift. While PEMEX’s plan identifies 21 priority projects, including onshore blocks such as Cuervito (in the Burgos Basin) and Tamaulipas-Constituciones (in the Tampico-Misantla Basin), the pace of awards and subsequent development has been slower than needed to counterbalance legacy declines. Mixed contracts designed to attract private capital have faced uneven uptake, compounded by regulatory uncertainty, financial risk perceptions and limited assurances on payment flows.

Industry analysts point out that PEMEX’s sustained investment has so far been insufficient to reverse long-term production trends. Despite strategic reorientation and targeted capital spending, the company continues to face operational stresses stemming from mature reservoirs, limited drilling activity compared with declining reserves, and broader budgetary constraints that limit capital intensity.

Analysts note that until upstream bottlenecks, including infrastructure, regulatory bottlenecks and access to technology, are addressed, PEMEX’s ability to achieve sustained growth will remain challenged. Even if projected gains for 2026 materialize, they may reflect short-cycle improvements rather than durable new production sources.

PEMEX’s production performance has implications beyond the company itself. Declining crude and liquids output affects Mexico’s balance of trade, energy self-sufficiency and revenue flows at a time when global crude markets remain volatile. It also influences decisions about refining strategy and fuel imports, as more of Mexico’s crude is directed toward domestic refining, reducing export volumes but increasing pressure on domestic operations.

Moreover, the decline comes amid broader debates about Mexico’s energy strategy. Policymakers are weighing the roles of conventional development, onshore production, private sector participation, and even unconventional resources such as shale gas (despite fracking bans) in shaping long-term supply dynamics. As Mexico Business News has explained, balancing energy security with climate and economic objectives will be central to future energy policy discussions.