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Bond Market News
Mexico President Plans for Pemex’s Collaboration with Private Companies, Profit Sharing
February 13, 2025
Mexico’s President Claudia Sheinbaum is planning to introduce a new strategy to attract private sector investment into the country’s oilfields by sharing profits with private partners. Under this plan, Pemex will collaborate with private companies, sharing profits from oil ventures that could account for up to 10% of its output. While the strategy aims to boost production and improve Pemex’s financial health, some have highlighted concerns over conflicting signals, as recent laws prioritize government policy over profitability. The profit-sharing model will divide proceeds after initial investments and a 30% crude levy by the government to ensure both private and state sectors benefit. Sheinbaum has also introduced legislation to streamline energy project permits and secure state control over Pemex and the electric utility CFE, despite private participation. Pemex, which has a massive debt of $100bn, alongside low refinery capacity may benefit from private sector collaborations, while the government works towards a scheme to pay off suppliers’ debt.
Pemex’s dollar bonds were trading stable, with its 6.625% 2035s at 103.15, yielding 9.42%.
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