Pemex’s 2026 plan continues to advance towards key milestones, including increasing oil production to 1.8 MMbpd, reducing financial dependence on Mexico by 2027, and lowering its financial debt to USD77.3bn by 2030. Among the actions implemented during 2025 to reduce refinancing risk, Pemex introduced cost-saving initiatives, completed refining projects aimed at supporting future production, increased refinery utilisation, conducted liability management exercises to reduce debt, and pursued efforts to improve ESG KPIs. Mexico has also introduced new instruments such as PCAPs, allocated additional resources in the federal budget, and provided further support through development banks. For 2026, we estimate Pemex’s financial needs will exceed USD35bn. This includes approximately USD18bn in maturities according to Pemex’s 3Q25 information, around MXN50bn (c.USD3.0bn) in MXN bond maturities, and bank loan facilities (c.USD7.0bn) that may need to be refinanced during the year. Mexico and Pemex have several options to roll over maturities, and we cannot rule out a potential market issuance, particularly as spreads have tightened significantly over the last year.
One of the plan’s goals is to make the country self-sufficient in gasoline and other hydrocarbon products. Progress has been noticeable, as crude oil processing and refined product throughput reached around 1.0 million barrels per day (MMbpd) according to the company’s 3Q25 operational data. The shift toward downstream operations has reduced crude oil exports and, as a result, Pemex’s USD cash generation capacity. However, the trade-off could be supportive for Mexico’s fiscal position if gasoline prices (including taxes) remain broadly stable even in a lower oil price environment. In this context, Mexico’s public finances remain beneficial for Pemex, as we expect continued government support.
How do we suggest playing corporate bonds in this environment? While we do not expect the sharp spread tightening observed last year to be repeated in 2026, holding Pemex bonds may still represent a carry strategy. Relative to other BB-rated quasi-sovereign corporates in Latin America, Pemex’s spread differential versus Mexico remains among the highest, particularly PEMEX 30, 31 and 32. In our view, Mexico’s financial support to Pemex is likely to continue. As all this financial backing may only be for the duration of the current administration, we would prefer to be involved in the short-end bonds or those maturing near the end of this administration’s term in office (2030). We would thus suggest going long PEMEX 30, 31 and 32.