EXCLUSIVE-Mexico's Pemex CEO, close ally of Sheinbaum, under threat as woes mount

By Adriana Barrera and Ana Isabel Martinez

MEXICO CITY, May 13 (Reuters) - The future of Pemex CEO Victor Rodríguez is increasingly uncertain as the longtime ally of President Claudia Sheinbaum struggles to turn around Mexico’s embattled state oil company, according to four sources familiar with the matter.

The first 18 months of his tenure at Pemex have been marked by worsening internal divisions, a major oil spill, and a deadly refinery accident. Production is just 1.6 million barrels a day (bpd), short of a 1.8 million bpd target, and the company has been unable to take advantage of the surge in oil prices resulting from the Iran war.

Rodríguez, meanwhile, has been sidelined by Sheinbaum, who has increasingly involved herself in operations to get the oil giant on firmer footing, according to the sources, who spoke on condition of anonymity. The 69-year-old former academic twice handed in his resignation last year, according to two of the sources. On each occasion, Sheinbaum persuaded him to stay.

Her increasing involvement - including intervention in key appointments normally left to the chief executive - has created competing centers of loyalty at Pemex, the sources said, making the turnaround job even more difficult for Rodríguez, who came into the role with no frontline business or political experience.

“Claudia knows that by keeping Víctor she controls Pemex,” one of the people said. “She is driven by the fear that it could slip out of her hands, but what she doesn’t see is that it already has, with everyone pulling their own way.”

Neither Pemex nor the presidency responded to requests for comment.

Pemex is struggling under $79 billion in debt and $20.8 billion owed to suppliers and contractors. It lost $2.6 billion in the first quarter despite the surge in oil prices to more than $100 a barrel.

STICKING WITH RODRIGUEZ FOR NOW

Speculation about Rodríguez’s future - and who might succeed him - has circulated repeatedly in government and industry circles, sources said. One name floated is Lázaro Cárdenas Batel, Sheinbaum's chief of staff and grandson of the historic Mexican president who nationalized the country's oil industry in 1938. Sources have previously said he declined the job when it was offered at the start of Sheinbaum’s term.

Key decisions and senior appointments are increasingly being made outside Rodríguez's control, the sources said, including top jobs in the exploration and production division, the trading arm, and the legal department.

One of his appointments, legal director Rosa Bello, left and was replaced on an interim basis by Diana Martínez, who is linked to Secretary of Energy Luz Elena Gonzalez. Logistics director Israel Benítez was appointed by Secretary of Security Omar García Harfuch and Sheinbaum, who also placed the director of administration, Marcela Villegas.

Neither Garcia Harfuch's office nor Gonzalez's office responded to a query from Reuters.

It is common for the president and key ministers to have a say over senior Pemex appointments, but the sources said the degree to which these decisions were taken without Rodríguez's input was extremely unusual. Some senior executives are effectively reporting to the finance or energy ministries instead of Rodríguez, they said.

The CEO of Pemex “has been unable to improve or correct the course because he is caught between many political forces," said Miriam Grunstein, a renowned consultant and analyst in the Mexican energy sector. “He is a CEO whom I would call defenseless.”

EFFORTS TO ATTRACT FOREIGN CAPITAL

Sheinbaum has been caught between trying to attract more foreign investment while still satisfying energy nationalists in the government who want Pemex to keep tight control on Mexico's oil industry, the sources said. The president owes her landslide 2024 victory in part to the popularity of her nationalist predecessor and mentor, Andrés Manuel López Obrador.

Sheinbaum and Rodríguez have tried to attract more private partnerships and investment but interest has been limited, in part because of the company's debt load and unsatisfactory terms pushed by some in the government, three sources said.

According to one source, Rodríguez warned that the economic and tax terms Pemex offered would not be attractive to private investors. Pemex announced plans to sign 11 such contracts, but so far has awarded nine due to lower-than-expected interest, mostly to smaller companies.

Sources said demand was weak due to the smaller size of the oilfields and uncertainty over whether Pemex would pay suppliers on time.

Sheinbaum has also had to contend with ongoing issues at the Olmeca refinery, a darling of Lopez Obrador which began operations in the second half of 2024 after delays that ballooned its cost to $21 billion - more than double its original budget. A fire near the refinery in March killed five people; it was followed by another blaze at a coke storage facility on April 9.

Three of the sources said Sheinbaum is now personally reviewing Pemex media coverage almost daily.

“She is upset and even frustrated with everything that is happening,” one said.