Pemex and Petrobras Plan Joint Drilling of Jurassic Formations in Mexican Gulf Waters
A financially weakened Pemex is partnering with Petrobras to drill geological horizons far deeper than anything US majors have commercially produced in Mexican waters.
Pemex and Brazil's Petrobras announced on Sunday (2026-08-23) a plan to jointly drill Jurassic-era source rock formations in Mexican waters of the Gulf of Mexico, targeting geological horizons miles deeper and eight times older than the reservoirs US supermajors including Chevron, Shell, and BP have pumped for decades on the American side of the basin.5
Mexico's exclusive economic zone sits adjacent to deepwater fields that generate roughly 2 million barrels per day for the United States, yet Mexico's side remains largely untapped, according to oilprice.com. The partnership pitches Petrobras's pre-salt deepwater expertise against a frontier no major exploration program has cracked at commercial scale in Mexican waters.2
The financial context for Pemex makes this a venture of necessity as much as strategy. The company posted a second-quarter net profit down 70% from a year earlier, even as an April-June oil price rally driven by Middle East tensions briefly lifted revenues. It carries roughly $80 billion in debt and remains heavily dependent on government support.5,2
Average crude and condensate output alongside partners ran at 1.66 million barrels per day in the second quarter, short of the Mexican government's 1.8 million bpd target, oilprice.com reported. ICE Brent crude front-month was trading at $93.19 per barrel as of 2026-08-24. But no oil price resolves a balance sheet of that size without a genuine production turnaround — and Pemex has not delivered one.5
Petrobras enters the arrangement from very different footing. The Brazilian driller reported second-quarter adjusted EBITDA of 93.8 billion reais ($18.4 billion), beating a Bloomberg consensus of 91.3 billion reais and up 80% from a year earlier, Rigzone reported. Net income for the quarter nearly doubled year-on-year to 52.4 billion reais. Petrobras paid out $3.4 billion in shareholder distributions in the period, above the $3.1 billion analysts had projected.3
Given that divergence in financial capacity, analysts expect Petrobras would shoulder the bulk of the capital burden if the partnership translates into actual drilling programs. Pemex cannot fund a serious frontier exploration campaign unilaterally.2
The geology is formidable on its own terms. Salt formations at these depths behave more like a liquid than a solid under high pressure, complicating seismic imaging and well integrity, Rigzone reported. Drilling through salt to reach Jurassic source rock is technically harder than the sub-salt pre-salt plays Petrobras mastered in Brazilian waters, where years of iteration drove down costs and improved recovery rates. That Brazilian track record is precisely what Pemex is importing through the partnership.4
Pemex ran a drilling campaign offshore Campeche in 2018 but has not released any results publicly. Analysts told oilprice.com that the absence of a public failure announcement implies the company found reason to continue rather than evidence the play cannot work. "That suggests there was no absolute play-killer, and possibly something that gave them real reason to keep testing," Rigzone quoted an analyst as saying. Eight years of silence on those results makes it difficult to assess what geological foundation the partnership is actually building on.5,4
The broader Atlantic basin has drawn fresh upstream capital. BP announced on August 5th (2026-08-05) a new deepwater discovery in Brazil alongside a quarterly profit of $2.4 billion on its preferred measure, a third higher than analysts had expected, The Economist reported. Rystad Energy forecasts Brazilian crude production will rise 10% this year, to above 3.7 million barrels per day.1
Mexico's offshore remains a structurally different proposition. Geological risk is higher, the institutional track record for this play is thinner, and the Mexican operating partner carries a debt load that constrains its flexibility at every step. Petrobras's capital and expertise may compensate for some of that — but the actual test is a well result. Given Pemex's record of withholding what it finds offshore Campeche, traders watching this partnership may be waiting a long time for one.5,2,4