Presentation of the 2024–2030 National Hydrocarbons and Natural Gas Sector Strategy

Greenberg Traurig - On November 13, 2024, Energy Secretary Luz Elena González presented the 2024–2030 National Hydrocarbons and Natural Gas Sector Strategy (the “Strategy”), which establishes a framework aimed at ensuring energy sovereignty and security.

The key points of the Strategy are set out below:

1. Hydrocarbon exploration and production:
• Maintain daily production of 1.8 million barrels.
• Prioritize domestic consumption over exports.
• Implement public-private joint projects to explore for and produce hydrocarbons.
•Ensure reserves equivalent to ten years of consumption.

2.Natural gas:
•Increase production from 3,854 to 4,976 million cubic feet per day.
•Reduce fugitive methane emissions and eliminate gas flaring and venting.
•Develop strategic storage to improve energy security.

3.Industrial transformation:
•Increase gasoline, diesel and jet fuel production by 343,000 barrels per day.
•Maximize operations at existing and new refineries, including Olmeca and Tula.
•Reactivate petrochemical complexes such as Cangrejera and Morelos.

4.Renewed tax regime:
•Simplify Pemex’s tax regime through the new Petroleum Right for Well-Being, with differentiated rates for oil, associated gas and non-associated gas.

5.Government support and financing​
•Manage Pemex’s debt, currently at USD 97 billion, without resorting to the capital markets.
•Ensure the company’s financial sustainability.

6.Competitiveness and energy transition:
•Integrate hydrocarbons as a key element of the energy transition, ensuring security of supply and economic sustainability.
The Strategy sets ambitious targets and presents a number of implementation challenges, including: (i) financial risks arising from ambitious targets without clearly defined critical paths; and (ii) aspects of public-private joint projects that may require further detail, among others.

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