Pemex recently told the U.S. Securities and Exchange Commission (SEC) that it expects production to fall to 1.58 million barrels per day (bpd) this year, instead of the government's target of 1.8 million bpd.

Mexican state oil company Pemex plans to reopen shut-in wells in an attempt to extract more barrels of oil to boost declining production, as it struggles to meet an ambitious government target.

Pemex recently told the U.S. Securities and Exchange Commission (SEC) that it expects production to fall to 1.58 million barrels per day (bpd) this year, instead of the government's target of 1.8 million bpd.

Ángel Cid Munguía, the company's new head of exploration and production, wrote in an internal document dated May 6 that progress was being made in the "reactivation of closed wells," although he did not provide further details.

The criteria would depend on both the risk profiles of the thousands of wells across the country, both onshore and offshore, and which ones could increase production the fastest, four sources familiar with the plans told Reuters.

Pemex did not immediately respond to a request for comment.

Mexico has more than 31,000 wells, both onshore and offshore, and nearly a third of them are closed, according to data shared with Reuters. More than 4,800 wells are considered "operational" for hydrocarbon production.

Reactivation depends on geological information, financing, well mechanics, and the recovery factor for each well, said one of the sources, who has studied the shut-in wells in detail.

Companies often need more specialized and expensive equipment to bring hydrocarbons to the surface.

Pemex currently produces about 1.6 million bpd.

The wells being considered for this strategy are for crude oil, natural gas, and condensate, said one of the sources, who works for Pemex, adding that the plans had advanced slowly due to the company's tight budgets, which are heavily indebted.

Some of these wells had been shut down because they were filling with water or had too low a pressure, making production difficult because more specialized equipment was needed, the source added.

Pemex had also been working in recent months on plans for secondary recovery techniques for wells in the Gulf of Mexico, including Ku, Maloob, Zaap, Akal, and Ayatsil, said two other Pemex sources working on a separate plan with the same goal of boosting declining production.

Although the shut-in wells don't need to be reopened, using new production methods could potentially produce much more, the two sources said, adding that the projects have not moved forward in part due to a lack of funding.

In another document dated the same day, Cid Munguía wrote that two people had already been appointed to oversee, design, and engineer the strategic exploration projects.

Cid Munguía returned to his post last week following the surprise departure of Néstor Martínez, a former commissioner of the now-defunct hydrocarbon sector regulator who had been appointed director of Pemex's exploration and production arm, PEP, in October.

Pemex's production has been declining for years as its older fields in the Gulf of Mexico, including many former star producers, are depleted and newer fields have failed to make up for the decline.

Pemex reduced PEP's activity in the last quarter of 2024, seeking savings of 26.8 billion pesos (US$1.35 billion), seeking to "optimize resources" toward the end of the year and postponing various types of work and delaying the acquisition of seismic data until 2025.

The company then argued that it would prioritize well work based on its "value generation" and reschedule activities related to plugging them.

In the past, there has been concern about the management of closed and abandoned wells. In Mexico, it is a legal requirement to safely close wells that no longer produce and ensure they do not pose a risk to the air, land, or water.

Still, petroleum engineers and reservoir geologists have repeatedly told Reuters that some shut-in wells are having a detrimental impact on the environment.

In 2022, Reuters reported how some of these wells were affecting populations in the impoverished southern state of Chiapas.