Mexico's state-owned oil and gas company Pemex has released its Business Plan for 2019-2023, which aims at reversing the declining trend in oil production since the last 14 years. Mexico is facing a sharp decrease in its oil production, which halved from 3.4 mb/d in 2004 to 1.9 mb/d in 2018 and around 1.7 mb/d currently. The group targets a production level of 2,697 kb/d by the end of 2023. To that end, Pemex will seek to increase the development activity in fields currently in operation, with new wells and with major repairs, and to accelerate the development of newly discovered reservoirs. Pemex also plans a gradual recovery of its refining capacity, with higher investments in the rehabilitation of six refineries and the construction of the new Dos Bocas refinery.
Pemex's Business Plan for 2019-2023 also aims at modernising the company, making it more competitive and guaranteeing its long-term financial viability. Pemex is struggling with a high tax burden, a high debt and low investments, leading to decreasing oil production and revenues. The Mexican government has already committed to reduce taxes for the company, extending the fiscal benefit in the payment of oil production rights through the publication of a decree (benefit of around MXP 30bn, i.e. US$4.5bn for 2019). The Federal Government plans to reform the Hydrocarbons Revenue Law to reduce the rate of the shared utility tax, from the current 65% to 54% by 2021 (gradual reduction scheme of 7% for 2020 and 4% by 2021). This should contribute to Pemex plans to achieve a balanced budget in 2021.