PEMEX Reports on Budget Spending, Expands Financing for 2026

PEMEX reported that it is executing its physical investment program in line with what was approved in the federal budget for the current fiscal year, as the NOC deploys significant public and structured financing resources to stabilize operations and sustain hydrocarbon production.

According to PEMEX, from January through Nov. 30, 2025, the company exercised MX$205 billion in budgeted physical investment. The company stated that this level of spending is consistent with the schedule approved by the Chamber of Deputies for the 2025 fiscal year. That amount represents approximately 82.3% of the MX$248.7 billion financial balance target established for PEMEX in the federal budget for 2025.

In its communication, PEMEX emphasized that the execution of investment has remained under control and aligned with the approved expenditure framework. The company framed this spending as part of its ongoing effort to maintain operational continuity across its upstream, midstream, and downstream segments, particularly in a context of aging infrastructure and declining natural production in mature fields.

Beyond the resources directly allocated in the federal budget, PEMEX reported that it expanded its investment capacity through the 2025 Investment Financing Program. This mechanism was implemented in coordination with the Ministry of Finance and Public Credit and channeled through the National Bank of Public Works and Services (BANOBRAS). Through this program, PEMEX reported that MX$70 billion in additional resources were allocated to physical investment between September and November 2025. The company also indicated that an additional MX$120 billion is expected to be applied during December, which would bring total physical investment financed through this program to MX$190 billion for the year.

The use of complementary financing mechanisms reflects the scale of PEMEX’s capital needs relative to its budgetary envelope. According to the 2025 federal expenditure framework, roughly 86% of PEMEX’s investment resources are earmarked for economic infrastructure projects related to hydrocarbons, while approximately 11.4% is allocated to maintenance. This distribution underscores the company’s focus on sustaining production capacity while addressing deferred maintenance across key assets.

The broader fiscal context is defined by the federal budgets approved for 2025 and 2026. For 2025, Congress approved for PEMEX a financial balance target of MX$248.7 billion and a ceiling on personal services spending of MX$114.1 billion. Total net spending authorized for PEMEX this year amounts to MX$464.3 billion. For 2026, the approved financial balance target rises to MX$263.5 billion, with a personal services spending ceiling of MX$118.2 billion and total net spending authorized at MX$517.4 billion.

PEMEX reported that, under the approved 2026 budget, physical investment is expected to increase by 17.7% compared to 2025. According to the company, this increase will be supported in part by resources from the Investment Financing Program, with around MX$60 billion expected to be integrated during 1Q26. PEMEX stated that this structure is intended to ensure continuity in its operational planning and financial execution.

On the operational side, PEMEX reiterated that it is maintaining the hydrocarbon production goals outlined in its Strategic Plan 2025–2035. According to the company, this plan contemplates an average national crude oil production level of 1.8MMb/d. Achieving this target remains a central challenge, given natural field decline and the need for sustained capital deployment.

PEMEX’s Financing Plan

The NOC has put in place a comprehensive financing strategy for 2025 designed to strengthen its investment capacity while addressing outstanding liabilities and sustaining operations. The Investment Financing Program 2025 was created as a central component of broader efforts underpinning the NOC’s Strategic Plan 2025-2035, which aims to put the company on a path toward financial independence by 2027.

The Strategic Plan 2025-2035, publicly revealed in 2025, provides the blueprint that frames the financing program. The plan emphasizes two key pillars: a financial arm focused on restoring viability and reducing reliance on federal budget transfers, and an operational arm aimed at stabilizing and expanding hydrocarbon output while creating new revenue streams. The plan outlines goals such as increased crude oil extraction, optimization of refining operations, expansion in petrochemical production, and broader participation of both public and private capital in strategic projects.

At the core of the investment financing program is the MX$250 billion-investment fund established with BANOBRAS. The investment fund is structured with contributions from development banks and will eventually involve commercial banking and institutional investors. BANOBRAS has indicated that at least half of the fund’s resources are expected to come from the banking system, with the remainder expected to involve private capital commitments.

The mechanism is intended to support PEMEX’s physical investment needs beyond the amounts directly allocated in the federal budget. In 2025, between September and November, MX$70 billion were disbursed to finance physical investment, and MX$120 billion are expected to be applied during December, bringing total disbursements through this mechanism to MX$190 billion for the year.

Resources from the financing program are being directed to priority projects that sustain exploration, production, and maintenance activities, amplifying the impact of the company’s base budget execution. By augmenting the budgeted physical investment, the program intends to ensure continuity and predictability in project financing for the company’s core operations.

In parallel with the BANOBRAS fund, Mexico has employed innovative financing tools to improve PEMEX’s balance sheet. One of these is the issuance of pre-capitalized notes (P-Caps), sophisticated debt instruments structured so that their impact on PEMEX’s balance sheet is deferred until needed. These instruments have been part of larger debt operations that seek to lower borrowing costs and provide liquidity for short-term obligations. For example, the federal government issued a P-Cap-structured debt of approximately US$12 billion, which was well received in international markets and helped refinance PEMEX obligations, strengthening the company’s financial position and improving its credit ratings.

P-Caps have gained additional attention from credit rating agencies, which have responded positively to PEMEX’s improved financial profile. Fitch Ratings and Moody’s both upgraded PEMEX’s credit ratings in 2025, partly in recognition of the strategic financing and investment structure associated with the 2025 strategic plan. These improvements, a rarity for the company in recent years, reflect increased confidence in PEMEX’s ability to manage debt and investment commitments under the new framework.

Beyond capital investment, the Investment Financing Program 2025 has been used to accelerate payments to suppliers, addressing a chronic problem for PEMEX and helping stabilize its supply chain. Independent reporting indicates that the financing mechanism coordinated through BANOBRAS has been used to make significant payments to suppliers and contractors, a development that aligns with the company’s stated focus on improving liquidity and institutional credibility.

Industry analysts have expressed concerns about PEMEX’s ability to stabilise and grow hydrocarbon production despite increased capital spending. Analysts point out that PEMEX’s planned production increases under the PEMEX Strategic Plan 2025-2035 remain at risk due to operational limitations, ageing fields, and insufficient near-term returns on investment.

Even as PEMEX invests heavily through the budget and the 2025 financing programme, project execution lags and the pace of resource development may not be sufficient to offset decline rates in mature fields.

In addition to internal financing programmes and budget allocations, there are growing expectations that PEMEX may return to international debt markets despite government preference to avoid recurring external borrowing. Reports suggest that PEMEX may need to tap debt markets again because of its very high financing needs beyond what can be covered by operational cash flow and structured financing vehicles alone, especially as the company seeks to execute major projects and cover outstanding liabilities. Market interest in PEMEX debt reflects continued confidence in sovereign backing, but also signals that structured financing mechanisms such as the investment financing programme and bond repurchases may not fully substitute for traditional capital market access.