Mexico’s energy sector is facing a perfect storm of financial strain, infrastructure bottlenecks, and shifting global dynamics—challenges that are testing the nation’s ability to maintain its position as a key player in North America’s industrial and energy supply chain. At the heart of the crisis is Petróleos Mexicanos (PEMEX), the state oil giant, whose financial woes have rippled across the oil-field services industry and now threaten to stall Mexico’s broader economic ambitions.
For decades, PEMEX has been the backbone of Mexico’s oil and gas sector. As the main operator, it bears the geological risk and makes critical decisions about where to drill and how to develop reservoirs. According to a recent industry analysis, PEMEX’s role is akin to that of an automaker in the car industry: it takes on the product and market risks, but relies heavily on a network of suppliers—oil-field service companies—to execute every stage of exploration, drilling, and production. These service companies, both local and international, are responsible for everything from seismic data collection to building production facilities and maintaining platforms and pipelines.
Yet, this symbiotic relationship has come under severe strain. Up until the 2013 Energy Reform, PEMEX operated as a monopsony, the sole buyer of oil-field services in Mexico. This changed with the reform, opening the market to competition, but PEMEX remains by far the largest client, with annual investments hovering around US$15 billion. However, financial troubles began to mount in 2017, when budget constraints led to delayed invoicing and payments to contractors. The situation deteriorated further in April 2020, when Moody’s downgraded PEMEX’s credit rating to “Ba2,” effectively doubling its financial debt costs compared to the federal government.
The consequences have been stark. By the second quarter of 2025, PEMEX’s balance sheet showed recognized payables to suppliers nearing US$23 billion, with unrecognized work potentially totaling another US$20 billion. The delays aren’t just in payments; the process of even acknowledging completed work has become bogged down. As of this year, there have been virtually no payments to service companies, with some—such as SLB and CARSO—holding overdue invoices close to US$1 billion. The result? The industry is, in the words of one analyst, "paralyzed." The number of drilling rigs in operation has plummeted from 57 in January 2024 to just 24 in 2025—a 58% decrease, signaling a dramatic slowdown in sector activity.
Meanwhile, the broader energy landscape in Mexico is equally fraught with challenges and opportunities. As global supply chains realign and nearshoring becomes a buzzword, Mexico’s ability to attract and retain industrial investment is increasingly tied to the reliability and capacity of its energy infrastructure. The country’s peak electricity demand now stands at 52.993 gigawatt-hours, with a projected 75% increase in capacity needed over the next 15 years. Yet, the current operational reserve margin is just 5%, leaving the grid highly vulnerable to disruptions—a problem laid bare during the heatwave of June 2022, when the system was pushed to its limits.
Political policies favoring state-led energy development have further complicated matters. These policies have delayed renewable projects and forced continued reliance on aging infrastructure, which in turn drives up costs and environmental impacts. The Mexican Ministry of Energy’s 2025 report highlights a sobering statistic: 30% of nearshoring firms have abandoned expansion plans due to inadequate power capacity. For sectors like automotive and electronics, which are particularly energy-intensive, this is a serious deterrent—one that could erode Mexico’s competitive edge in the North American market.
Ironically, Mexico is blessed with some of the world’s best renewable resources. The potential for solar and wind energy, especially in the southern regions, is enormous. However, a fragmented transmission network means that much of this clean power can’t reach the industrial hubs in the north where it’s needed most. This disconnect not only limits the economic value of renewables but also makes it harder for Mexico to meet the environmental, social, and governance (ESG) standards expected by U.S. and European investors.
Recognizing the urgency, the incoming Sheinbaum administration has signaled a willingness to embrace public-private partnerships to accelerate infrastructure upgrades. Still, progress hinges on regulatory clarity and long-term policy stability—areas where Mexico has historically struggled. As one analyst put it, "The solution lies in a dual strategy: scaling renewable generation and overhauling transmission systems." Without these reforms, the nation risks missing out on the opportunities presented by the global energy transition.
Geopolitical factors add another layer of complexity. The U.S. “security-shoring” agenda, which places national security above traditional trade principles, has introduced tariffs and regulatory hurdles that could deter investment. At the same time, China’s growing presence in Latin America means Mexican firms are under pressure to reduce dependency on Chinese imports while competing for global capital. The ambitious Interoceanic Corridor in the Isthmus of Tehuantepec, designed to link the Atlantic and Pacific coasts via modern railways and industrial zones, could help lower logistics costs and attract manufacturers—but its success depends on resolving both security and energy supply issues.
Despite the headwinds, there are bright spots for investors willing to navigate the risks. Opportunities abound in renewable energy development, especially for companies capable of integrating storage solutions to help stabilize the grid. The government’s target is a 64,595-megawatt capacity expansion, a figure that underscores the scale of the transition underway. Firms specializing in transmission modernization and smart grid technologies are also well positioned, as are those focused on energy storage and efficiency.
To address the immediate crisis in the oil-field services sector, the Mexican government has taken two major steps: issuing Pre-Capitalized Notes for US$12 billion to pay down financial and commercial debt, and announcing a Trust at Banobras, a development bank, for more than US$12 billion to finance private investment and pay outstanding invoices to service companies. Both measures carry contingent government guarantees, signaling a recognition of the urgent need to restore confidence among suppliers. In June 2024, a US$2 billion PEMEX bond was issued specifically to pay large contractor invoices, and international banks like Citi and Deutsche Bank have stepped in with additional financial instruments such as Credit Default Swaps to help manage risk.
Yet, questions remain about how much of these funds will actually reach service companies and when payments will resume. The fate of the oil-field services industry, so deeply intertwined with PEMEX and the broader Mexican economy, hangs in the balance. As one industry observer noted, "Any long-term solution to PEMEX's financial troubles requires the PEMEX treasury to be capable of immediately facing its commitments with the oil-field service industry, because the industry is one and the same with the Mexican oil and gas industry."
Mexico’s energy crossroads are fraught with peril and promise. The coming years will test the government’s resolve, the resilience of its institutions, and the ingenuity of its investors. How the nation navigates these challenges will shape not only its energy future but also its role in the evolving North American and global supply chain.
