Mexican energy policy missteps signal continued reliance on Permian gas

Despite Mexico's vast hydrocarbon potential, the country's energy sector continues to struggle under the weight of misguided policies and underinvestment. President-elect Claudia Sheinbaum's commitment to resource nationalism and state-controlled energy companies signals a continuation of her predecessor's approach, likely perpetuating Mexico's dependence on US natural gas imports, particularly from the prolific Permian.

While oil companies such as Woodside, Wintershall Dea, Eni, Talos Energy, and Harbour Energy are making inroads in Mexico's offshore sector, their efforts are insufficient to offset declining domestic production. Pemex, the state-owned oil company, has seen its liquids production fall by 27% over the past decade, highlighting the urgent need for private sector involvement and technological expertise.

Ironically, Mexico's energy shortfall is creating opportunities for US producers and LNG developers, Hart Energy reports. The country's growing gas demand, driven by industrial expansion and nearshoring trends, is expected to reach 9.9 Bcf/d by 2032. This increasing appetite for natural gas, coupled with plans for Pacific Coast LNG export facilities, ensures that Mexico will remain a critical market for Permian Basin producers for the foreseeable future, despite political rhetoric favoring energy independence.