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Mexico Proposes Nearly 70% Cut in Pemex Debt Support for 2027

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The Mexican government has proposed to slash financial support for debt payments for state-owned oil company Petroleos Mexicanos or Pemex by almost 70% year-on-year in 2027 to 81.1 billion pesos ($4.8 billion).

According to the 2027 budget plan presented to Congress on Tuesday, the government has proposed to reduce the financial support from 263.5 billion pesos in 2026.

"This is a result of the reformulation of Pemex's financial rescue strategy, which involves strengthening the company's fiscal position to mitigate its dependence on the federal government, while simultaneously reinforcing measures to achieve [the desired outcome]," the document said.

"As noted previously, the reduction compared to 2026 is primarily due to a lower budget allocation to Pemex for debt amortization payments resulting from refinancing operations," it said.

The government has also proposed limiting domestic and external borrowing ceilings for Pemex to 160.6 trillion pesos and $5.26 billion dollars respectively.

Meanwhile, crude oil production for the year is projected to hover around the target of 1.8 million barrels per day, buoyed by Pemex's 2025-2035 strategic plan and due to increased production associated with joint ventures and private projects, the document said.

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