a new starting point - pemex · 5 pemex new law (1) • stronger ceo and board of directors with...
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A New Starting PointJune 2009
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Forward-Looking Statements
• This presentation contains forward-looking statements. We may also make written or oral forward-looking statements in our periodic reports to the Mexican National Banking and Securities Commission (CNBV) and the U.S. Securities and Exchange Commission (SEC), in our annual report, in our proxy statements, in our offering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties.
• We may include forward-looking statements that address, among other things, our:
− drilling and exploration activities,
− import and export activities,
− projected and targeted capital expenditures and other costs, commitments and revenues; and liquidity, etc.
• Actual results could differ materially from those projected in such forward-looking statements as a result of various factors that may be beyond our control. These factors include, but are not limited to:
− changes in international crude oil and natural gas prices,
− effects on us from competition,
− limitations on our access to sources of financing on competitive terms,
− significant economic or political developments in Mexico,
− developments affecting the energy sector, and
− changes in our regulatory environment.
• Accordingly, you should not place undue reliance on these forward-looking statements. In any event, these statements speak only as of their dates, and we undertake no obligation to update or revise any of them, whether as a result of new information, future events or otherwise.
• These risks and uncertainties are more fully detailed in our most recent prospectus filed with the CNBV and available through the Mexican Stock Exchange (www.bmv.com.mx) and the Form 20-F filing, as amended, with the SEC (www.sec.gov). These factors could cause actual results to differ materially from those contained in any forward-looking statement.
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Cautionary Note
• The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this document, such as total reserves, probable reserves and possible reserves, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, “File No. 0-99” available from us at www.pemex.com or Marina Nacional 329 Floor 38 Col. Huasteca, Mexico City 11311 or at (52 55) 1944 9700. You can also obtain this Form from the SEC by calling 1-800-SEC-0330.
• EBITDA is a non-GAAP measure.
• Convenience translation into US dollars of amounts in pesos have been made at the following exchange rates, in Pesos per US$: 2003, 11.23; 2004, 11.26; 2005, 10.77; 2006, 10.88; 2007, 10.86; 2008, 13.53; 1Q09, 14.15. Such translations should not be construed as a representation that the peso amounts have been of could be converted into US dollars at the foregoing or any other rate.
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Content
Energy reform
Operating and financial highlights
Corporate strategy
Debt portfolio
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PEMEX New Law (1)
• Stronger CEO and Board of Directors with clear roles and responsibilities.
• Creation of executive committees and incorporation of four new professional members.
• New contracting scheme for core businesses.
• Flexibility to invest excess income.
• Differentiated fiscal regime.
• Issuance of citizen bonds.
(1) Approved by the Mexican Congress on October 28, 2008.
Improved decision-making process
Strengthened execution capability and financial flexibility
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Corporate Governance
Professional members(1) Term (Years)
- Fluvio César Ruiz Alarcón 3 - Rogelio Gasca Neri 4- Héctor Moreira 5- José Fortunato Álvarez 6
• Deep knowledge of the O&G industry
• Relevant experience as public servants
• Proved technical skills• Strong academic credentials
(1) On March 17, 2009, the Mexican Senate approved the designation of the professional members sent by President Felipe Calderón. For this single occasion, the term of three professional members will not be of 6 years.
5 union representatives
6 government representatives
4 professional members– preside key executive committees– power to defer decisions once with 3 votes– serve six year staggered terms – option of repeating one term
Board of Directors
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Executive Committees
Audit & Performance Evaluation
CompensationTransparency & Accountability
Acquisitions, Lease, Works &
ServicesStrategy & Investment
Environment & Sustainability
Development & Tech. Research
• Clear defined roles and responsibilities will enhance the decision making process and increase autonomy.
• Committees will improve current transparency, oversight and control mechanisms.
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Contracting Scheme for Core Businesses
• In accordance with best practices in the oil industry;
• Modifications will be allowed for improving results;
• Prices can be negotiated and participants may be pre-qualified.
• The Committee of Acquisitions, Lease and Services will implementpolicies and oversee the process.
• PEMEX can offer incentives to contractors that provide benefits from new technologies, faster execution or greater profit.
• Payments must always be made in cash and in no case ownership rights over hydrocarbons will be granted.
• Companies are to be penalized for not meeting targets or for committing environmental infractions.
Contracts with performance incentives
Flexible contracting schemes
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Financial balance target
Illustrative
Financial Flexibility
• PEMEX will have more flexibility to invest its excess income (EI) on a gradual basis.
• EI will only be allocated to infrastructure investments.
Excess income
Excess income
Revenue
Opex
CapexPpal. & int.(1)
Taxes(2)
The greater of:Year% of EI MMMPs.
2009 35.0 11.02010 50.0 12.52011 62.5 14.02012 75.0 15.02013 87.5 15.0
2015 & beyond 100.0
Limit on EI use
(1) Includes payment of principal and interests.
(2) Includes payment of taxes and duties.
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Fiscal Regime
As of November 14, 2008, the Federal Duties Law was modified to distinguish among the geological characteristics of fields, through differentiated regimes applicable to projects at Chicontepec and deepwater. The limit on deductible expenses assigned to various projects (cost cap) are the following:
Cost-cap
Project Crude oil(US$/b)
Non-associated gas (US$/Mcf)
Chicontepec 11.0 2.7
Deepwater 16.5 4.0
Other fields (1) 6.5 2.7
(1) Remained unchanged.
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They will provide a market reference for decisions taken by the company, increasing transparency and accountability.
Mexicans will be involved in the evolution of PEMEX, aligning incentives of bondholders with PEMEX’s performance.
The bonds represent a financing alternative.
They will strengthen PEMEX’s balance sheet.
Citizen Bonds
• The Ministry of Finance and Public Credit will establish the characteristics, terms and conditions, issuance and distribution mechanisms.
• Only available to Mexican individuals and financial institutions.
• A holding limit for each issuance of 0.1%.
• Returns will be linked to PEMEX’s performance.
Main benefits
Characteristics
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Content
Energy reform
Operating and financial highlights
Corporate strategy
Debt portfolio
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0 2 4 6 8 10 12
PEMEX (3rd)
2008 Top Petroleum Companies by Crude Oil Production(1) (MMbd) - One of the major suppliers of
crude oil to the U.S.
- Sole producer of crude oil, natural gas & petroleum products in México.
- Most important source of government income.
PEMEX’s Snapshot
(1) Includes production of crude oil, natural gas liquids and condensates for Saudi Aramco, NIOC, PEMEX, CNPC, Exxon Mobil, KPC, PDV, BP, INOC, Rosneft. Source: Information as of 2008. Energy Intelligence Group (PIW, February 2009) and PEMEX.
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As of December 31, 2008
Billion barrels oil equivalent
• Reserves are certified by third parties since 1998.(4)
14.5
14.7
14.3
Proved Probable Possible 3P(2)
73%
27%
69%
31%
10 – 1P
20 – 2P
Crude oil
OffshoreOnshore
2P
Crude Oil & Natural Gas Reserves (1)
Years (3)
Reserve Life
(1) Figures may not total due to rounding.(2) In accordance with the definition of proved reserves under Rule 4.10 (a) of Regulation S-X under the U.S. Securities Act of 1933. (3) Reserves as of December 31, 2008, and average production 2008 (1.451 MMMboe).(4) Auditors include DeGolyer and MacNaughton, Netherland, Sewell International, and Ryder Scott Company.(5) Heavy crude oil < 27° API; Extra-light crude oil > 38° API.
43.630 – 3P
61%31%
8%
Light
Heavy
Extra-light (5)
By lo
cati
onBy
typ
e
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1.5 1.91.4 1.2 1.3 1.7
72%
50%41%
26%26% 23%
02003 2004 2005 2006 2007 2008
Exploration investments (US$MMM) 1P Reserve replacement rate
Results in Exploration
Replacement rate evolution for proved reserves (1P)
(1) Includes delineations, developments and revisions.
• Results of the exploration strategy start to crystallize. New discoveries, considering 3P reserves, surpassed production for the first time in 2008.
Target=100% by 2012
(1)
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0.0
0.4
0.8
1.2
1.6
2003 2004 2005 2006 2007 200820
60
100
140
Safety and EnvironmentLost workdays /
MM hours workedDisabling accidents /
MM hours worked
Firm Potential GGE Reduction
152 (Mt)
206 (Mt)
303 (Mt)
527 (Mt)
858 (Mt)
Sustainable Development
Severity Index
Frequency Index
Sustainable Development Report (SDR)
• PEMEX´s 2007 SDR awarded the highest possible grade (A+, GRI Checked)as defined by the Global Reporting Initiative (GRI) scale:
• “A” - All indicators required by the GRI guidelines have been covered.
• "+" - The information has been audited by a qualified third party.
• "GRI Checked" - GRI has reviewed the SDR and certified the grade.Climate Change Initiatives
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EBITDA (1)
Total sales
Billion pesos
Net income (loss)
Change
• Income before taxes and duties totaled 662 billion pesos, similar to 2007.
• 2008 net loss totaled 109 billion pesos, primarily due to the foreign exchange loss, and the effect of lower inventory valuation.
(1) Earnings before interests, taxes, depreciation and amortization. Excludes IEPS.
Billion dollars
Income before taxes and duties
2008 Financial Highlights
1,139.3 189.71,329.0 16.7% 98.2
2007 2008 2008
0.5% 48.9
16.3% 71.6
(8.1)
658.9 662.3 3.4
(18.3) (109.4) (91.1)
833.7 969.2 135.6
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Total production (MMboed)
Gas (MMMcfd)
Oil (MMbd)
(1) Year 2008Source: Bloomberg and company websites.
Company Benchmark: Production(1)
1.8 2.0
0.6 0.5
2.2 2.2 2.3
1.2
0.2
4.0
Conoco Petrobras Repsol CanadianNatural
Gazprom Lukoil Rosneft PetroChina Sinopec PEMEX
0.8
1.8
0.3 0.3 0.3
1.9
0.8 0.9
0.2
2.8
Conoco Petrobras Repsol CanadianNatural
Gazprom Lukoil Rosneft PetroChina Sinopec PEMEX
4.81.9 1.8 1.2 1.6
3.51.9
0.3
6.9
19.4
Conoco Petrobras Repsol CanadianNatural
Gazprom Lukoil Rosneft PetroChina Sinopec PEMEX
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Sales
Billion dollars
Proved Reserves
MMMboe
(1) Year 2008.Source: Bloomberg and company websites.
Company Benchmark: Size(1)
92.9 80.7
11.6
119.786.3 69.0
156.9208.0
98.2
225.4
Conoco Petrobras Repsol CanadianNatural
Gazprom Lukoil Rosneft PetroChina Sinopec PEMEX
5.8
9.1
0.9 1.3
11.7 11.2
2.2
14.513.4 14.3
Conoco Petrobras Repsol CanadianNatural
Gazprom Lukoil Rosneft PetroChina Sinopec PEMEX
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Content
Energy reform
Operating and financial highlights
Corporate strategy
Debt portfolio
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1. Cantarell (N2)2. Ku-Maloob-Zaap (N2)3. A. J. Bermúdez (N2)4. Jujo-Tecominoacán (N2)
Enhanced recovery projects
Production2008 (Mbd)
1,01670615776
227269
215225
2007 2008
Drilling rigsOffshore platforms
78
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Upstream Production Short Term Strategy
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3 2
27
4 5
8 6
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PALEOCANALCHICONTEPEC
CUENCA DECHICONTEPEC
FAJA DE OROMARINA
FAJA DE OROTERRESTRE
VERACRUZ
HIDALGO
PUEBLA
TUXPAN
POZA RICA
GOLFO DEMEXICO
• Area : 3,731 km2
• Comprised by 29 fields
• Oil gravity: 18-45° API
• Reserves (MMMboe)(1)
(1) As of Dec. 31, 2008.(2) 2008 average. (3) As of January 2009. (4) 1Q09 production.
Mid Term Production Strategy: ATG (Chicontepec)
09-17 09-171,000-1,200 200-400
Oil prod. (Mbd)
Well completionExecution
program
• Operating wells: 707(2)
• Drilling rigs: 35(3)
Current structure
• Oil prod: 30 Mbd(4)
Characteristics
- 1P: 0.7- 2P: 8.8- 3P: 17.4
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Chuktah-201
Nab-1
Noxal-1
Lakach-1
Lalail-1
512
680
988
805
•Tamil-1 is an extra-heavy crude oil reservoir; reserves are being evaluated.
•Lakach is the 4th largest gas field with 1.4 Tcf of total reserves.
Chelem-1810
Tamil-1778
Tamha-11,121
2003 2004 2005 2006 2007 2008
Wat
er d
epth
–(m
eter
s)Long Term Production Strategy: Deepwater (1)
935
Gas fields
(1) Water depth greater than 500 meters.
Crude oil fields
Unsuccessful
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Downstream Strategy
• Sulfur reduction in gasoline and diesel to meet international standards.
• Minatitlán & Salina Cruz refineries reconfiguration to increase deep conversion capacity.
• Construction of a new refinery (evaluation phase).
Refining
Petroche-micals
• Production capacity expansions in ethylene and styrene chains.
• Joint ventures to integrate the petrochemical value chain.
Natural Gas • Capacity expansion in Poza Rica to capture natural gas liquids from the Chicontepec area.
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207.8
238.9
201.9
113.7 122.9 127.0150.4
170.1
23.4
03 04 05 06 07 08 09E
87%
Billion pesos
PPQ
PGBP
Refining
E&P
2.0%
1.0%
9.8%
Corporate
Investments (1),(2),(3)
0.2%
• 2009 estimated investments will be 62% higher than 2003-2008 average.
(1) Figures may not total due to rounding.(2) Includes upstream maintenance expenditures(3) Nominal figures.
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Content
Energy reform
Operating and financial highlights
Corporate strategy
Debt portfolio
27
As of March 31
Billion dollars
• In dollar terms, total debt decreased 5.9%
• As a result of the depreciation of the peso against other currencies, in peso terms total debt increased by 25%
Total Debt
8.55.6
38.8 38.9
2008 2009
47.344.5
5.9%
28
39%
20%
18%5%
18%
As of March 31, 2009
100% = 44.5 billion dollars
Debt portafolio
(1) Includes COPF’s, FPSO, and Cadereyta project financing.
US$ MMM
17.9
7.9
8.8
7.9
2.1(1)
Certificados Bursátiles
Bank loans
Export credit agencies
International bonds
Other
Debt exposure:
76%
15%
9%
US Dollars Mexican Pesos Yen
51%49%
Fixed Rate Floating Rate
• By currency
• By rate
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Maturity ProfileAs of March 31, 2009
6.74.0
5.95.6
1y 2y 3y 4y 5y andbeyond
22.3
S&P Moody´s Fitch
BBB+ Baa1 BBB
Petróleos Mexicanos
Credit Ratings
Billion dollars
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Debt Evolution (1)
31 36 39 35 30 35
4350
37 44
5246 0.5
0.40.5
0.7
1.1
0.872
55
28
45
7277
02003 2004 2005 2006 2007 2008
0.0
0.2
0.4
0.6
0.8
1.0
1.2
Total Debt Net DebtNet Debt / EBITDA EBITDA
(2)
Billion dollars
(1) Nominal figures.(2) Total debt minus cash and cash equivalents.
