Capital expenditures in Mexico’s oil industry collapsed during the previous downturn, slumping 80% from the $13 billion level reached in 2013 (Figure 3). Spending has picked up to over $5 billion in 2019–2020 with about 30% of all capital directed at new sanctioned fields, but total investments are still less than half of what was spent back in 2013–2014. Given the prevailing oil price and market environment, investments are expected to enter a period of decline again over the next couple of years, with total spending likely to hover below $3 billion. Assuming improved oil price dynamics, we anticipate a rebound in Mexican spending from 2023 onwards, with currently unsanctioned fields getting a substantial influx of capital. The largest part of total capital investments is expected to be directed into the Trion and Zama fields, which are planned to reach final investment decisions in 2022–2023.
This year marks a turning point for Mexico’s oil supply. The decline over the past five years, driven largely by decreasing production from large mature offshore fields, has been mitigated by infill drilling activity and contribution from recently sanctioned discoveries. These new fields, such as the 2017 Ixachi discovery and the Amoca and Mizton fields in Area 1, are expected to support Mexico’s oil production outlook in the medium term. Although a recovery in capital expenditure is expected in the next five years with investments in fields currently awaiting sanctioning, these fields’ contribution to the country’s production will be not be significant until at least the late 2020s.