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Canada Roadshow May 2015 – PEMEX

PEMEX · May 30, 2015 · 56 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Canada Roadshow May 2015 – PEMEX – slide 1
    Investor Presentation Canada Roadshow May 2015 Rodolfo Campos Managing Director of Finance & Treasury
  2. Canada Roadshow May 2015 – PEMEX – slide 2
    Content Addressing the Mexican Economy How will the Energy Reform impact PEMEXs finances Financial Highlights Investment & Financing Looking Ahead: A Promising Future 2
  3. Canada Roadshow May 2015 – PEMEX – slide 3
    Mexicos Recent Reforms will Fuel Growth and Productivity GDP Annual Growth Average in Mexico1 (1950-2012) GDP Annual Average Growth (1991-2013) Percent 15 1982-2013 10 Average: 2.3 Italy 0.71% 5 Spain 2.00% 0 1960-1981 Canada…
  4. Canada Roadshow May 2015 – PEMEX – slide 4
    11 Structural Reforms in 20 Months The 11 Reforms 1. Energy 2. Economic Competition 3. Telecommunications and Broadcasting All Reforms have been approved 4. Tax by the Mexican Congress 5. Financial 6. Labor The legislative process is…
  5. Canada Roadshow May 2015 – PEMEX – slide 5
    The Milestones of the Energy Reform Constitutional Reform (December 20, 2013) March 21 August 13 Round Zero & The Ministry of Energy1 prioritized PEMEXs request for exploratory 2014 Resolution blocks and producing fields, and defined…
  6. Canada Roadshow May 2015 – PEMEX – slide 6
    Content Addressing the Mexican Economy How will the Energy Reform impact PEMEXs finances Financial Highlights Investment & Financing Looking Ahead: A Promising Future 6
  7. Canada Roadshow May 2015 – PEMEX – slide 7
    The End of the Monopoly and the Beginning of a New Era Monopoly Strong controls and Open Market limitations on: Budget Operational Management Strategy Financial Aspects Management Corporate Governance Value Creation 7
  8. Canada Roadshow May 2015 – PEMEX – slide 8
    Financial Implications of the Energy Reform for PEMEX Financial functions Monopoly Compensation Scheme Strong controls and Open Market limitations on: Procurement Operational Budget Energy Reform Management Strategy Fiscal…
  9. Canada Roadshow May 2015 – PEMEX – slide 9
    Advantages of the New Compensation and Procurement Regimes Convenience of the new Benefits of Centralization compensation regime Competitive vs. industrys wages Unified processes, policies, and procedures Result-oriented…
  10. Canada Roadshow May 2015 – PEMEX – slide 10
    The Fiscal Regime New fiscal 1. Contractual Fee Assignments regime for the Oil Fund (Round Zero) PEMEX Exploratory Phase 2. Royalties Migration 3. Compensation considering Operating Income or Signing Licenses Contractual 5.…
  11. Canada Roadshow May 2015 – PEMEX – slide 11
    Efficient Allocation of PEMEX Budget and Debt Ceiling Before After CAPEX Efficient budget allocation focus on value creation CAPEX & OPEX OPEX Debt ceiling autonomy Coordination Federal Budget 11
  12. Canada Roadshow May 2015 – PEMEX – slide 12
    Content Addressing the Mexican Economy How will the Energy Reform impact PEMEXs finances Financial Highlights Investment & Financing Looking Ahead: A Promising Future 12
  13. Canada Roadshow May 2015 – PEMEX – slide 13
    Income Statement Evolution1 Income Statement Income before taxes and duties USD billion Taxes and duties EBITDA Historically, from 2009 to Total sales 2014, taxes have accounted for 118% of operating income 100 and 129% of…
  14. Canada Roadshow May 2015 – PEMEX – slide 14
    Price Sensitivity 2015 Price Sensitivity 2015: -1 USD/b USD million (164) (287) 69 303 (356) 107 1 2 Exports Domestic Sales Imports DUC DEH Total Considering current production and the Mexican Mix price3, if the crude…
  15. Canada Roadshow May 2015 – PEMEX – slide 15
    Balance Sheet Evolution1 Liability and Equity Profile USD billion 19 15 17 21 In addition to internal cash 17 100 99 flows, PEMEX has resorted to 23 15 99 financial markets to finance 86 15 62 its investment projects. 49 9 54…
  16. Canada Roadshow May 2015 – PEMEX – slide 16
    Background and Necessary Update of the Pension Scheme Mexico: Life Expectancy Accrued Obligations1 Active MXN billion employees Years Current 1,494 pensions In 1942, the retirement conditions were established: 55 years of age…
  17. Canada Roadshow May 2015 – PEMEX – slide 17
    Sound Debt Profile By Currency1,2 By Interest Rate1,2 By Instrument1,2 By Currency Exposure1,2 1% 2% 1% 21% 4% 1% 27% 59% 11% 23% 4% 66% 75% 73% 6% 0% 7% 18% Dollar Euros Fixed Floating Int. Bonds Cebures Dollar Euros Pesos…
  18. Canada Roadshow May 2015 – PEMEX – slide 18
    Content Addressing the Mexican Economy How will the Energy Reform impact PEMEXs finances Financial Highlights Investment & Financing Looking Ahead: A Promising Future 18
  19. Canada Roadshow May 2015 – PEMEX – slide 19
    The Funding Puzzle Value generation driver New pension scheme New fiscal Gradual Efficient CAPEX allocation Efficiencies regime reduction of the Corporate restructure fiscal burden Technology transfer Risk diversification…
  20. Canada Roadshow May 2015 – PEMEX – slide 20
    The Funding Puzzle PEMEX Expenditures USD billion 225.1 New fiscal New Efficiencies 13.8 14.7 15.1 15.5 regime fiscal 13.1 Efficiencies regime 12.7 11.7 12.3 11.7 32.4 33.7 32.8 31.5 26.1 26.8 21.5 23.7 23.5 Associations…
  21. Canada Roadshow May 2015 – PEMEX – slide 21
    Financial Discipline 2015 Budget Adjustment MXN billion Budget Adjustment Premises 62 62 To minimize crude and gas production effects To minimize the impacts on reserves replacement To maintain the capacity to supply the national…
  22. Canada Roadshow May 2015 – PEMEX – slide 22
    CAPEX Financing Net Indebtedness Total debt as of March 2015 is USD 84 billion which USD MMM 62.4% 63.8% represents 0.9x sales and 1.7x EBITDA 27.6% 25.0% 18.2% 7.4% 14.4% 26.1 26.8 21.3 21.5 23.7 23.5 18.6 16.7 15.0 5.1 5.3 3.4…
  23. Canada Roadshow May 2015 – PEMEX – slide 23
    Expected Sources and Uses of Funds 20151 Price: 79.0 USD/b Exchange rate: MXN 13.40/USD Sources Uses Crude oil production: 2,400 Mbd USD billion USD billion 18.5 27.3 36.6 15.8 3.5 5.8 2.3 Initial Cash Resources Financing…
  24. Canada Roadshow May 2015 – PEMEX – slide 24
    New Financing Alternatives Fund Raising in the O&G Industry1 PEMEX Financing Program 2015 USD billion 100% = USD 18.5 billion 9% 2% 13% 31% 50% 10% 85% Bonds (domestic, international International markets: Bonds Project…
  25. Canada Roadshow May 2015 – PEMEX – slide 25
    Content Addressing the Mexican Economy How will the Energy Reform impact PEMEXs finances Financial Highlights Investment & Financing Looking Ahead: A Promising Future 25
  26. Canada Roadshow May 2015 – PEMEX – slide 26
    Mexico: Sound Economic Policies General Government Mexico: A well established Investment Grade2 Gross Debt: E20151 (% of GDP) Japan 246.1% Italy 133.8% Portugal 126.3% Ireland 107.7% US 105.1% Spain 99.4% UK 91.1% Germany…
  27. Canada Roadshow May 2015 – PEMEX – slide 27
    PEMEX: The Partner of Choice Key Advantages Production and Finding and Development Costs2 (USD / boe) MMMboe % of Mexico Reserves Production Finding and Development Total 9.2 33.6 42.8 1P 12.4 96% 2P 21.1 91% Petrobras 17.2 24.6…
  28. Canada Roadshow May 2015 – PEMEX – slide 28
    Timely Response to the Abkatn Permanente Incident Timeline Abkatn A Complex 1. On April 1, 2015, the incident started at 03:40 hrs and by 03:45 3 hrs the complex evacuation was commanded (completed by 05:30 6 hrs) 2 2. By 03:45 hrs,…
  29. Canada Roadshow May 2015 – PEMEX – slide 29
    Key Takeaways The Mexican economy is undergoing reform processes that will foster productivity and growth The Energy Reform will strengthen PEMEXs finances The new fiscal regime applicable to assignments will allow a higher…
  30. Canada Roadshow May 2015 – PEMEX – slide 30
    Investor Relations (+52 55) 1944-9700 ripemex.com www.ri.pemex.com
  31. Canada Roadshow May 2015 – PEMEX – slide 31
    Distribution of PEMEXs Reserves1 Oil and Gas MMMboe (billion barrels of oil equivalent) Gas Prospective Reserves Cum. Resources Basin Prod. 1P 2P 3P Non Conv. (90%) (50%) (10%) Conv. Sabinas Burgos Southeastern 47.8 10.8 14.2…
  32. Canada Roadshow May 2015 – PEMEX – slide 32
    Distribution of Mexicos Reserves1 Oil and Gas MMMboe (billion barrels of oil equivalent) Gas Reserves Accum. Basin Prod. 1P 2P 3P (90%) (50%) (10%) Sabinas Burgos Southeastern 47.8 11.4 15.6 21.6 Deep Sea Tampico Tampico- 6.3…
  33. Canada Roadshow May 2015 – PEMEX – slide 33
    Euroclearable Cebure: The Next Step Consistent Demand for Fixed Rate Peso Instruments Pemex 7.65% 2021 Notes & Pemex 7.19% 2024 Notes (MXN Bn) The Euroclearable Cebures (ECC) is more accessible to international investors…
  34. Canada Roadshow May 2015 – PEMEX – slide 34
    Ongoing Commitment to Local Markets Pemex Planned Financings 2011 2015E USD billion Pemex has relied on local markets 0.5 for a growing percentage of its 2.0 funding needs 1.0 3.0 Naturally matched with our 2.0 Others income…
  35. Canada Roadshow May 2015 – PEMEX – slide 35
    ECC: The Corporate Mbono Euroclearable Cebure (ECC) GDN Mbono Bond held in local clearing house, trades on International instruments issued by a depositary, Government Bond held in local clearing Description Euroclear trades on DTC…
  36. Canada Roadshow May 2015 – PEMEX – slide 36
    Payment Process for New Euroclearable Cebures 1 Invex (Common Rep) sends Issuer 7 payment instructions and calculation to the issuer 1 2 The issuer wires 100% of the Invex 2 Coupon to Indeval 3 Indeval verifies and monitors the…
  37. Canada Roadshow May 2015 – PEMEX – slide 37
    Pemex Market Makers Program Aiming to increase liquidity in the pesos-denominated bonds, PEMEX launched the Market Makers Program in November 2013. General Scheme Transactions on Brokers Platforms (1) (Trades+Bids) Benefits…
  38. Canada Roadshow May 2015 – PEMEX – slide 38
    Mbono vs. Pemex Local Currency Bonds Historical Performance Yield (%) Spread (bps) 8.00 300 7.25 225 6.50 150 5.75 75 5.00 0 Jun-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Pemex Spread to Mbono Mbono 2024 Pemex GDN 2024…
  39. Canada Roadshow May 2015 – PEMEX – slide 39
    Institutional Capacities and Audit Compliance Pemexs E&P Frequency Index1 (0.11) is 80% below OGPs2 international standard (0.55) Well-trained employees. We maintain an integral 9 safety auditing processes, The Complex has multiple…
  40. Canada Roadshow May 2015 – PEMEX – slide 40
    Deferred Production Volume of 238 Mbd of Oil & 627 MMcfd of Gas Resumption of Operations Phase 1 Phase 2 Phase 3 On April 6 On April 20 On June 1 Actions Actions Actions Abkatn A Permanente platform Abkatn A Termporal platform…
  41. Canada Roadshow May 2015 – PEMEX – slide 41
    Future Production Frontiers Deepwater Infrastructure1 Shale Potential2 United States United Gulf of Mexico States Mexico Mexico Cuba 1 Source: National Geographic. 2 Source: CNH with information from North Dakota…
  42. Canada Roadshow May 2015 – PEMEX – slide 42
    Los Ramones Pipeline Project Los Ramones Phase II: North Los Ramones Phase I Ownership structure (TAG Pipelines Norte): 45% BlackRock/First Reserve1 Ownership structure (Gasoductos de Chihuahua): 30% PGPB1 50% PGPB. 25% IEnova…
  43. Canada Roadshow May 2015 – PEMEX – slide 43
    Logistics: Shipping Map 2013 Purchases / Sales Third Party Europe West East Far East USA USA Central, South America and the Caribbean
  44. Canada Roadshow May 2015 – PEMEX – slide 44
    Midstream projects PMI develops infrastructure projects to support its trading activity and to enhance flexibility to PEMEXs trading activity. PMI has developed the following projects: A Matamoros Brownsville pipeline (2004) 10…
  45. Canada Roadshow May 2015 – PEMEX – slide 45
    Midstream new projects Norte Nustar Astillero Keppel Los Ramones II Astillero Hijos de J Barreras Manzanillo Peninsular Cozumel Golfo-Centro Singapur Solidificadora de Fertilizantes Azufre Lzaro Cardenas…
  46. Canada Roadshow May 2015 – PEMEX – slide 46
    Downstream projects PMI established alliances to enhance PEMEX operations: Deer Park Refining Limited Partnership (1993): - Joint venture between Shell Oil and PMI North America. - Deer Park is the sixth largest refinery in the…
  47. Canada Roadshow May 2015 – PEMEX – slide 47
    Round Zero maintains our strong reserve base Prospective 2P Reserves Total prospective resources Conventional 2P Reserves resources resources MMMboe MMMboe MMMboe MMMboe Unconventional 100% = 24.8 resources 100% = 20.6 100% = 23.4…
  48. Canada Roadshow May 2015 – PEMEX – slide 48
    Industry Cost Leader Production Costsa,b Finding and Development Costsa,c,d USD 2013 / boe USD 2013 / boe 7.91 17.63 6.67 6.34 6.94 16.22 15.74 15.07 14.91 5.27 5.57 13.66 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012…
  49. Canada Roadshow May 2015 – PEMEX – slide 49
    Quick Take on the New Energy Sector in Mexico Assignments Regulated by the Ministry of Energy and the CNH Migration PEMEX to 1. Production-sharing continue 2. Profit-sharing commercialization Contracts + Third Parties 3.…
  50. Canada Roadshow May 2015 – PEMEX – slide 50
    Corporate Governance and Structure Strengthen Corporate Governance Board Committees Human Audit Resources and Compensation State Acquisitions, SENER SHCP Independent Members Strategy and Representatives1 Leasing, Works…
  51. Canada Roadshow May 2015 – PEMEX – slide 51
    Fiscal Regime for Assignments 1. Simple 3. Gradual reduction of fiscal burden Key Takeaways 2. Resembles typical Increasing cost recognition tax scheme Decreasing profit sharing duty Duties and Royalties Hydrocarbon Exploration…
  52. Canada Roadshow May 2015 – PEMEX – slide 52
    Bringing New Partnerships On-Board 2P Reserves CAPEX (MMboe)2 (USD billion) Fields 2.6 Phase 1 569 Poza Rica-Altamira and Burgos 22 existing contracts1 Phase 2 1,639 32.7 ATG and Burgos Shallow waters 350 6.3 Bolontik, Sinn and…
  53. Canada Roadshow May 2015 – PEMEX – slide 53
    Round One Reserves (MMboe) Fields 1,5911 Perdido Area Deepwater 3,2221 South Potential Annual Chicontepec & 2,6782 Investment Aceite Terciario del Golfo Asset non-conventional 8,9271 (2015-2018): 1,1042 USD 8.5 billion…
  54. Canada Roadshow May 2015 – PEMEX – slide 54
    First bidding process of Round 1 Source: SENER.
  55. Canada Roadshow May 2015 – PEMEX – slide 55
    Second bidding process of Round 1 Source: SENER.
  56. Canada Roadshow May 2015 – PEMEX – slide 56
    Financing Program 2015 Programmed Source USD billion Domestic Markets 7.0 9.0 International Markets 8.0 11.0 Loans 2.0 3.0 Export Credit Agencies (ECAs) 1.0 2.0 Others 0.2 0.5 Net Indebtedness 15.0

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