Introduction

2021 Introduction

The Mexican oil and gas industry was not immune to the various challenges that have affected the sector globally since 2020. However, the industry has been greatly shielded against the worst of these circumstances thanks to its status as an essential sector.

The Mexican government declared the oil and gas sector an essential economic activity at the outbreak of the COVID-19 pandemic in Mexico and decreed that its operations were to remain uninterrupted throughout the crisis. Major IOCs made significant commitments to their operations in Mexico despite the necessary delays they had to absorb as new health and safety measures were implemented and populations at risk were sent home to prevent contagions.

Meanwhile, the sector’s regulators have also been able to clear the backlog that accumulated during the most difficult times of the pandemic when mobility and gathering restrictions were at their strictest, sometimes achieving faster response times with reduced personnel and fewer material resources.

Thanks to these and other efforts, Mexico’s oil and gas value chain has remained productive throughout this uniquely difficult time in history. PEMEX has even started addressing the necessary reduction of its debt and the stabilization of its production levels. The government’s plans for the NOC remain as ambitious as ever — and the results in 2020 suggest these plans are feasible, having survived the worst and most unexpected of setbacks. Meanwhile, the legal resources that companies in the sector are using to protect their activities against sudden changes in the sector’s regulatory framework prove that rule of law in the Mexican oil and gas industry remains reliable.

The industry has already seen enough positive results in 2021 to suggest that the worst is behind it. What remains to be seen is whether or not the arc of recovery and renewed growth can be completed by the end of this year.

Mexico Oil & Gas Review 2021 focuses on the developments that defined the upstream segment, which was arguably the most challenged and also the most rewarded in 2020 and 2021. While the midstream and downstream sectors also achieved significant gains throughout this period, most of the attention was firmly on the upstream segment due in part to the government’s use of related metrics, such as production levels, to measure the degree to which it achieved its goals.