Pemex, Mexico's state energy company, is taking steps to reopen old wells to increase oil production, which has been in decline.

This move comes as the company faces challenges in meeting the government's production target of 1.8 million barrels per day (mbbl/d), with an expected fall to 1.58mbbl/d this year, according to a report by Reuters, citing sources. 

The company, which currently produces around 1.6mbbl/d, has seen a steady decrease in output due to the depletion of its older fields in the Gulf of Mexico (GOM) and the underperformance of newer fields.

Pemex's exploration and production arm head Angel Cid Munguia mentioned in an internal document the progression of "reactivation of closed wells" without specifying numbers, the report said.

The decision on which wells to reopen will be based on risk assessments and potential for rapid production increases, according to four sources familiar with the plans.

Mexico has more than 31,000 wells, with approximately one-third closed. Of these, around 4,800 are considered operational for hydrocarbon production.

The reactivation strategy involves evaluating geological data, funding availability, well mechanics and the recovery factor of each well.

While the documents did not detail the technology to be used, other global operators in mature fields have employed advanced equipment to maintain production.

The focus is on wells that can produce crude oil, natural gas and condensate. Budget limitations have slowed the reactivation plans at Pemex, which is heavily indebted.

Some wells were closed due to water intrusion or low pressure, requiring more specialised equipment for production.

Pemex has also been exploring secondary recovery methods for wells in the GOM, including Ku, Maloob, Zaap, Akal and Ayastil.

These projects have been hindered by financial constraints, despite their potential to significantly increase production.

In addition to the reactivation efforts, Cid Munguia's document from 6 May indicates the appointment of two individuals to oversee strategic exploration projects.

Amidst these developments, Pemex is also seeking new markets for its crude oil in Asia and Europe in response to US tariffs, which include a 25% levy on Mexican crude.