Pemex

Pemex is the state-owned petroleum corporation of Mexico. Its full name is Petróleos Mexicanos, which translates to Mexican Petroleum in English. The company is managed and operated directly by the Mexican government. Because it was formed by taking control of oil resources from foreign companies, it has become an enduring symbol of Mexican nationalism.

Pemex plays a massive role in the economy of Latin America. In 2009, it was ranked as the second largest enterprise in the region by annual revenue. It was surpassed only by the Brazilian national oil company, Petrobras.

The company manages a complex process of finding and processing energy resources. This begins with exploration, where workers search for oil and gas reserves deep underground or under the ocean. Once discovered, the oil must be extracted from the earth. After extraction, the raw crude oil is sent to a refinery.

A refinery is a facility that processes raw oil into usable products. For example, the Tula refinery in the state of Hidalgo helps turn oil into fuel. Pemex also manages the distribution of liquefied petroleum gas, known as LPG, to help meet energy needs.

The history of oil in Mexico stretches back to the time of the Aztecs, who used asphalt and pitch. In 1876, small amounts of oil were refined into kerosene near Tampico. By the early 20th century, large quantities were being extracted by companies from Britain and the United States. This changed on March 18, 1938, when President Lázaro Cárdenas announced the expropriation of all foreign oil companies. He used Article 27 of the 1917 Constitution to claim these resources for the state. Cárdenas argued this was a necessary response to how foreign companies operated on Mexican soil.

Although foreign governments initially boycotted Mexican oil, Pemex eventually grew into one of the largest oil companies in the world.

Pemex faces significant economic challenges regarding its production and debt. Some experts have noted that the company may be at "Hubbert's Peak." This concept suggests that once oil production reaches a certain peak, it cannot be recovered as old fields decline. Between 2004 and 2007, annual production dropped each year. In 2006, Pemex averaged 3.71 million barrels of oil per day (MMBPD), but it has never reached a yearly average of 4 MMBPD.

Financially, the company carries a very heavy burden. By September 2021, its debts were over $100 billion. In July 2023, the company's credit rating was changed from stable to negative because of this ongoing debt accumulation.

Despite these debts, Pemex remains a vital source of money for the Mexican government. The taxes and royalties paid by Pemex provide about one third of all tax revenue collected by the Mexican state. The company pays out over 60% of its revenue in these taxes and royalties. Even with financial struggles, Pemex continues to make important discoveries. In December 2019, the company found a massive deposit in southeastern Mexico. This discovery could potentially produce 500 million barrels of crude oil, marking the largest find in over 30 years.

Throughout its history, Pemex has dealt with serious industrial accidents and environmental issues. In 1979, an exploratory well called Ixtoc 1 suffered a blowout in the Bay of Campeche. This resulted in one of the largest oil spills in history. In 1984, a series of explosions occurred at an LPG storage facility in San Juan Ixhuatepec. These explosions killed between 500 and 600 people and injured up to 7,000 others. Other incidents include a 2012 gas plant explosion in Reynosa and a 2013 explosion at Pemex administrative offices in Mexico City.

The company has also been identified as the seventh most polluting company in the world by The Guardian.

To manage its future, Pemex engages in international cooperation and domestic planning. In 2014, Pemex signed an agreement with the Russian company Lukoil. They focus on oil production, field exploration, and exchanging knowledge about environmental protection. Pemex also works with other firms, such as Talos Energy, to develop offshore oil fields like the Zama field. To reduce its debt, Pemex is working on a plan to refine more oil domestically. This plan aims to reduce the amount of oil the country exports by the year 2023.