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By KELIN DILLON

According to an analysis displayed in Mexican state-owned oil company Petróleos Mexicanos’ (Pemex) newly released Climate Risk Report, Mexico’s potential investment in renewable energies could put the oil company’s income – and subsequently, that of its investors – at risk.

Pemex, which has controversially doubled down on its crude oil production amid international concerns surrounding Mexico’s approach to climate change, said that the renewables transition would diminish consumer demand for high-carbon products, decrease oil sector funding and cause volatility in oil and gas prices.

“In its Sustainability Plan, Pemex has declared the transition risk as the most substantial, with a high credit impact and interest for stakeholders,” read the report. “As a result of the assessment of its potential financial impact, it was determined that the renewables transition risk has a significant impact on Pemex’s long-term income.” 

Pemex also highlighted the energy transition’s potential could see Mexico phase out its hydrocarbon subsidies and halter the company’s ability to seek out and develop new oil deposits.

The company noted that it is seeking alternative options to adapt to Mexico’s energy transition, such as investing in carbon capture and storage, biofuels and green hydrogen.

The state-owned oil company’s report comes as Pemex continues the construction of its Dos Bocas oil refinery in the state of Tabasco, a project that’s drawn negative international and local attention due to its inflated budget and continued reliance on dirty energy.