LatAmOil: Mexico set for energy shake-up under new President Sheinbaum

Mexico’s energy landscape is set for a major transformation as President Claudia Sheinbaum’s government seeks to balance the power of state-controlled companies with the need for private investment. The challenge is immense, with Pemex, the state-owned oil giant, buckling under a $100bn debt, and the Federal Electricity Commission (CFE) plagued by years of underinvestment. Yet the newly installed president is committed to achieving her ambitious target of generating 45% of Mexico’s electricity from renewable sources by 2030 – a significant jump from the current 24%.

A key component of Sheinbaum’s energy strategy, first mooted in July, is to increase the government's control over Pemex and CFE, reclassifying them as public companies rather than profit-driven entities. This shift, which has already passed Mexico’s Senate, will allow the government to prioritise national interests over profits. Energy Minister Luz Elena Gonzalez has stated that this move ensures the companies align with the government’s goals, but critics argue that increased state control could discourage private investment, particularly in electricity transmission. With private investors wary of new restrictions, the success of this reform hinges on Sheinbaum’s ability to reassure both local and international capital.

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