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Crossroads: Mexico needs private investment to meet expanding energy demand

In the latest edition of Infralogic’s Crossroads podcast, Adrian Lara, principal analyst, upstream Latin America for global provider of data and analytics for the energy transition Wood Mackenzie, discusses the challenges Mexico faces to meet energy demands ahead of the inauguration of President elect Claudia Sheinbaum.

Lara discusses his recent report titled “Mexico’s energy sector challenges for the incoming administration,” which notes the country’s declining oil and gas production, the need to hike  exploration activity, its high dependence on gasoline imports, and constrained power supply as it faces the challenge to transition to renewable energy.

Lara provides opinions on the need for the new government to find ways to attract private investment in the energy sector and what will be expected of the incoming President elect.

Over the last few years, the Mexican government has focused on strengthening state-owned energy company Pemex’s role in the energy sector but Lara says there is a limit to how much Pemex can do.  While Mexico’s oil and gas demand is forecast to grow at 2% during the current decade, hydrocarbon production is set to decline over the next decade, making it difficult for the country to meet its increasing domestic demands and forcing it to increase imports.

He said Mexico has yet to formulate a timeframe for its net zero emissions goal and while Mexico has pledged to reduce its emissions by 35% by 2030, that goal may yet remain out of reach.

To listen to the podcast, click here.