Mexico’s balanced budget for next year depends partially on its oil firm boosting production by around 17%, something that the country hasn’t achieved in nearly four decades.
Pemex, as the Mexican national oil generator is known, is predicted to increase its production to 1.951 MMbpd on average in 2020, according to the next year’s budget plan that Mexican President Andres Manuel Lopez Obrador sent to Congress Sunday evening.
That increase from July levels of 1.671 MMbbl means Pemex must reverse almost 15 years of constant output slump. The last time the embattled firm managed to reach progress of that magnitude was in 1982, after the start of Cantarell — a giant deposit in the Bay of Campeche that drove oil production in Mexico for many years and is now almost exhausted.
The federal government said the outlook is realistic because Pemex managed to stabilize its fall now and it was generating about 2 MMbbl two years ago. The proposal contains 86 billion pesos ($4.4 billion) to help Pemex via tax breaks and other steps.
The budget is the first that Lopez Obrador, known as AMLO, sends to Congress with his full imprint. The federal government had just two weeks to prepare this year’s budget after he assumed office in December 2018, which also left Congress with little time to debate it. Mexico’s lower house has until 20 October to approve the revenue law, which should then be passed by the Senate by 31 October. The spending law, which merely requires lower house permission, must be passed by 15 November.