The energy legacy of López Obrador: Pemex faces an unprecedented crisis.

As President Andrés López Obrador's term comes to an end, the dream of energy sovereignty in Mexico, which he championed from the start of his administration, appears to be an increasingly distant and complicated goal. Pemex, the iconic state-owned enterprise, is in a critical state, burdened with a colossal debt exceeding $100 billion and a declining hydrocarbon production. The legacy of the current administration, which promised to rescue the state-owned company, seems more like a challenge that will be passed on to the next president, Claudia Sheinbaum. Since taking office, President López Obrador has injected more than one trillion pesos into Pemex through direct transfers, aiming to reverse the crisis facing the company. However, the reality is that despite these efforts, Pemex remains the most indebted oil company in the world. As of July this year, the company's financial liabilities reached $99.391 billion, a figure that, while having slightly decreased since 2018, remains unsustainable and limits its capacity for investment and operation. The incoming director of Pemex, Víctor Rodríguez Padilla, who will take office on October 1, will find a company trapped in a labyrinth of debts and pressured by suppliers demanding payments. The current administration has tried to alleviate this pressure through tax waivers and capitalizing the company. However, the reality is that 61% of the transfers have been used to pay off debts, leaving little room for investments that could revitalize the production and operations of the oil company. Despite the capital injection and efforts to reduce the tax burden, Pemex has reported significant losses, accumulating more than 256 billion pesos in the second quarter of this year. The decline in revenues, coupled with rising costs and exchange rate losses, reflects the fragility of the company's financial situation. This results in a concerning outlook, where it is increasingly evident that the ambitious rescue plan for the oil company has not yielded the expected results. Pemex's production has been a critical point in this narrative. As of July this year, the company extracted an average of 1.7 million barrels per day, a figure that starkly contrasts with the 2.4 million barrels produced a decade ago. This decline not only affects the company's revenues but also jeopardizes the self-sufficiency of refineries, including the controversial Dos Bocas refinery, which has faced scrutiny over its cost and timelines. President López Obrador had promised at the beginning of his term to increase production to 2.5 million barrels per day, a target that has had to be adjusted downward over time. Now, the new director of Pemex faces the goal of reaching at least 1.8 million barrels per day, a figure that, while modest, remains a considerable challenge given the current context. López Obrador's energy policy has also faced criticism. The cancellation of partnerships with the private sector and the restriction of licenses have created an environment of uncertainty in the market. Although in the final stretch of his government he has shown some flexibility by allowing projects with private investors, the future of the relationship between Pemex and the private sector remains uncertain, which could affect the company's ability to recover. Miriam Grunstein, an energy and oil analyst, points out that the new director of Pemex has the necessary experience to face these challenges, but warns that the decisions made so far have left the company in a vulnerable position. Grunstein emphasizes that while there were failures in the previous administration's energy reform, the current government's approach has been destructive and has led Pemex to a state of precariousness. A recent report from Fitch Ratings highlights that Pemex and Petrobras, the Brazilian oil company, are on opposite ends in terms of profitability. While Petrobras reports healthy cash flows, Pemex is grappling with an overwhelming debt burden and liquidity issues that threaten its operations. This scenario suggests that the challenges facing Pemex are not merely financial, but also operational, deepening the crisis affecting the state-owned enterprise. Thus, López Obrador's dream of energy sovereignty faces a harsh reality. The legacy his administration will leave at Pemex will be a monumental challenge for the next president. The decisions made in the coming months will be crucial in determining the future of the company and, consequently, the direction of the country's energy policy. Uncertainty and debt now seem to be the defining characteristics of Mexico's largest company, leaving the question of how to regain direction in such a crucial sector for the national economy hanging in the air.