Pemex pledges business as usual as it halts contracts and conducts budgetary review

Mexico's state-owned oil and gas company Pemex has said that a suspension of contracts with upstream contractors will not compromise the continuity of its operations.

In a press release published last week, the company said that its upstream arm Pemex Exploración y Producción (PEP) had requested a "temporary suspension" of contractual processes which had not yet been concluded. 

The suspension will last until the end of the year, when Pemex expects to complete an efficiency and budgetary review for 2025.

Pemex said the measure "does not compromise the continuity of operations for the coming year."

The company said it wants to align its plans for 2025 with the national budget presented by President Claudia Sheinbaum on November 15.

Sheinbaum's budget will cut the amount of money allocated to Pemex next year by 7.5%.

In addition to the budget cuts, Pemex is struggling with US$97.3bn of financial debt and owes its suppliers a reported US$20bn in back payments.

The company's financial difficulties have raised concern about its ability to stabilize its oil output around current levels, as Sheinbaum has vowed.

"For Pemex it is of the highest importance to continue with those processes, which by their nature represent operational continuity," the company said.

"In the coming days, we will provide information about the priority needs aligned with the conditions of the 2025 operating program."