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The Facts
According to Reuters, three internal documents produced by Mexico's oil regulator show that the country's state oil company Pemex illegally burnt off hydrocarbon resources worth more than $342M in the three years up to August 2022.
The regulator used prices from non-public contracts to assess that the company destroyed resources worth $275M from the Ixachi field and $67M from the Quesqui field during this time.
The Spin
Narrative A
Mexico is among the world's biggest gas flarers and even Pemex has acknowledged its poor environmental, social and governance (ESG) record, which could affect its financing as competitors transition to clean energy. As Pemex has historically neglected investing in infrastructure to produce gas and condensate, it's now facing the consequences of its choices.
Narrative B
After acknowledging the existence of this problem, Mexico and Pemex are taking decisive steps to tackle the excessive flaring. A $2B investment plan to reduce the amount of gas lost as well as a cooperation agreement with the Environmental Protection Agency to provide diagnosis and economic analyses have been announced in line with the government's vow to protect the environment.
