PEMEX’s Key Role in the 2024 Elections: Wilson Center

As Mexico approaches the pivotal 2024 elections, PEMEX takes center stage due to its political influence, financial contributions, and social impact. According to Leonardo Beltran, Board Member, Sustainable Energy for All, and Distinguished Visiting Fellow, Columbia University's Center on Global Energy Policy, PEMEX's significance remains paramount despite its evolving financial landscape.

PEMEX's influence in the upcoming elections spans three critical dimensions, as outlined by Beltrán. Union leaders hold the power to mobilize not only financial resources and company workers but also the support of workers' families, making a substantial impact on electoral processes. This influence is particularly pronounced in states with a strong presence of exploration, production, and refining operations, including Tamaulipas, Veracruz, Tabasco, Campeche, Hidalgo, Guanajuato, Nuevo Leon, and Oaxaca.

Beltrán writes for the Wilson Center that while PEMEX's financial troubles have reduced its contribution to the federal budget from 44% in 2008 to approximately 7% in 2023, its economic footprint remains substantial. Beltrán emphasizes that PEMEX hires a wide spectrum of companies, directly and indirectly impacting entire cities and contributing significantly to local economies. The company's financial health plays a crucial role in shaping the economic dynamics of regions dependent on hydrocarbon activities. 

Moreover, in hydrocarbon-rich states, PEMEX's influence extends beyond finances, supporting local infrastructure projects such as roads, schools, and hospitals. The Olmeca Refinery in Tabasco exemplifies this, where the construction of the refinery had positive spillover effects on education, health, and transportation infrastructure, showcasing the intricate connection between PEMEX and community development.

The divergent approaches of presidential candidates Sheinbaum and Gálvez toward PEMEX add complexity to the elections. Sheinbaum's potential victory aligns with her predecessor's stance, hinting at budget cuts amid financial constraints, although still financially supporting PEMEX and CFE. In contrast, Gálvez advocates for PEMEX to partner with the private sector, diversifying its portfolio and reintroducing oil and gas rounds, positioning Mexico as a player in international markets. Gálvez's emphasis on sustainability suggests a potential shift toward stringent environmental, social, and governance requirements to align with global expectations.

PEMEX's financial challenges limit its ability to embark on new projects or exhibit flexibility. Collaborations with the private sector, as proposed by Gálvez, could breathe new life into PEMEX, providing the company with alternative business models, fresh financial resources, and cutting-edge technologies necessary for thriving in a carbon-constrained world.

Check out Beltrán’s expert contributions to Mexico Business News.