Motivation The Business Plan hereby presented is somewhat unique for various reasons: On one hand, profitability is its guiding principle. On the other, PEMEX is a Productive State Enterprise (NOC) (regulated prices, supply…
Positioning for the Future: Challenge and Opportunity Adjust cost structure Budget adjustment The Short-term Austerity measures and business strategy Challenge to a low oil price Fiscal discipline Budget control scenario…
PEMEX at a Glance 8 Oil producer Present along the entire value chain 8 Pemex Exploration and Production Drilling company 15 Pemex Drilling and Services Refining company in the world Pemex Industrial Transformation 5…
Agenda Financial Situation and Outlook Pemex Exploration and Production Pemex Industrial Transformation Pemex Logistics Pemex Ethylene Pemex Fertilizers Pemex Trading Safety and Sustainability Final Considerations
Financial Outlook: Achieving Stability Budget Adjustment Strengthening of the financial balance1 Today PEMEX has stable finances Increased access to financial markets and active liability management In 2017 PEMEX will…
Financial Outlook: Budget Adjustment (1/3) Like all other oil companies in the world, PEMEX reacted to the low oil price environment with a budget adjustment Budget adjustment of 100 billion pesos, approximately 20% of company's…
Financial Outlook: Budget Adjustment (2/3) PEMEX will meet its 100 billion pesos Budget Adjustment and its financial targets. Adjust portfolio to profitable investments: 6 billion pesos Halted production in wells where extraction cost…
Financial Outlook: Budget Adjustment (3/3) Generate Efficiencies and Cost Reduction: 29 billion pesos The 28.9 billion pesos goal was exceeded. To date, the projection of savings for the end of the year is 35 billion pesos.…
Financial Outlook: Strengthening of the Financial Balance (1/2) Cash Flow Injection As of October 2016, 142 of the 147 billion MXN 73.51 billion to reduce pesos have been paid, the rest have been accounts payable to scheduled for…
Financial Outlook: Strengthening of the Financial Balance (2/2) PEMEXs pension reform stopped the increase of pension liabilities. Starting in January 2016, new workers are incorporated into a financially sustainable individual…
Financial Outlook: Access to financial markets and active liability management The markets have responded positively. Decrease in the spread between PEMEXs and Mexicos sovereign bond by 148 basis points. PEMEXs Bonds 5y in Dollars…
Financial Outlook: Access to financial markets and active liability management Most Important Emissions February March June July October Active Liability Management USD 5 USD 2.5 USD 380 USD 760 USD 5.6 Billion Billion…
Financial Outlook: Access to financial markets and active liability management During 2016, the average term of the debt portfolio increased by 1 year. PEMEX's consolidated cash position was improved. Years Average term of PEMEXs…
Financial Outlook: Scenarios with Realistic Premises and Conservative Assumptions The financial scenario for 2017 marks an inflection point in the trend: Primary Surplus (first time since 2012) 8.4 billion pesos Attainable Production…
Financial Outlook: Scenarios with Realistic Premises and Conservative Assumptions Realistic Premises Projected oil prices in line with Brent futures and adjusted for the Mexican Mix. Increasing interest rates in accordance with the…
Financial Outlook: Scenarios Pemex Exploration and Production: Concentrates on assignments that are profitable after taxes. Pemex Industrial Transformation: Business Plan Partnerships in the operation of auxiliary activities and…
Financial Outlook: Scenarios Pemex Exploration and Production Aggressive farm out program: taking advantage of the opportunities provided by the Energy Reform. PEMEX develops fields that are profitable for the country and which,…
Agenda Financial Situation and Outlook Pemex Exploration and Production Pemex Industrial Transformation Pemex Logistics Pemex Ethylene Pemex Fertilizers Pemex Trading Safety and Sustainability Final Considerations
Pemex Exploration and Production: Context Round 0 gave PEMEX 22.2 billion barrels of 3P reserves in 2016. The Ministry of Energy successfully auctioned 528 million barrels in rounds 1.2 and 1.3. The Trion field, currently undergoing…
Pemex Exploration and Production: Challenge and Opportunity The Challenge is to replace Cantarells drop in production, stabilize production and eventually increase the platform in a profitable, safe and sustainable manner. The…
Pemex Exploration and Production: Strategy 1 Business Plan Focus on entitlements that are profitable for PEMEX. Scenario 2 Aggressive farm out program that increases production by 15%. Farm-outs PEMEX develops fields that are…
Pemex Exploration and Production: Exploration The Business Plan scenarios reserve incorporation goal is 1,100 million barrels of oil equivalent at 3P level from 2017 to 2021. In case of additional resources, a sustainable increase of…
Pemex Exploration and Production: Pemex Drilling and Services As part of the Energy Reform, Pemex Drilling and Services Company was separated from Pemex Exploration and Production, a common practice in the international context. The…
Agenda Financial Situation and Outlook Pemex Exploration and Production Pemex Industrial Transformation Pemex Logistics Pemex Ethylene Pemex Fertilizers Pemex Trading Safety and Sustainability Final Considerations
Pemex Industrial Transformation: Context Six refineries in Mexico with a refining capacity of 1,640 thousand barrels per day and one in the United States in a joint venture with Shell. Nine gas processing centers. 15th refining…
Pemex Industrial Transformation: Context Pemex Industrial Transformations market is attractive: Mexico is the 6th largest market in gasoline consumption, the 9th in natural gas and the 3rd in LPG. Good growth perspectives (2.5%…
Pemex Industrial Transformation: Operational Diagnosis The challenge is to reverse the economic and operational losses of close to 100 billion pesos. Non programmed shut-downs index (%) Equivalent distillation capacity Usage…
Pemex Industrial Transformation: Strategy Impact of the Strategic Initiatives on the Financial Balance until 2025 (Billion pesos in cash flow) 50 29.4 11 36.2 0 Stolen Result -50 49.2 Transportation Product -108.9 costs…
Pemex Industrial Transformation: Cogeneration The supply of hydrogen, vapor and electricity are critical aspects for operation reliability in refineries. PEMEX demands 8.8 thousand tons of vapor per hour. If all of this vapor came…
Agenda Financial Situation and Outlook Pemex Exploration and Production Pemex Industrial Transformation Pemex Logistics Pemex Ethylene Pemex Fertilizers Pemex Trading Safety and Sustainability Final Considerations
Pemex Logistics: Context Pemex Logistics was created by separating primary treatment, transport and storage of hydrocarbons and oil products from Pemex Exploration and Production and from Pemex Industrial Processing. According to…
Pemex Logistics: Challenge and opportunity The challenge Pemex Logistics faces is to become a competitive logistics company, and transform itself from being: to being: A company designed to serve a unique client (Pemex Exploration…
Pemex Logistics: Strategy Financial Balance Projection Element Initiative Impact (billions of pesos) Billion pesos 90 83.3 Cost reduction 11. Costs reduction and Port efficiency 85 infrastructure 2.8 Operation reliability…
Agenda Financial Situation and Outlook Pemex Exploration and Production Pemex Industrial Transformation Pemex Logistics Pemex Ethylene Pemex Fertilizers Pemex Trading Safety and Sustainability Final Considerations
Pemex Ethylene: Context Pemex Ethylene is the second largest petrochemical firm in the country. It has two petrochemical complexes, Cangrejera and Morelos. Its the only ethylene oxide producer in Mexico, it has a 32% share in the…
Pemex Ethylene: Challenge and Opportunity The challenge is to increase operative reliability and ensure the provision of raw materials. The opportunity is that Pemex Ethylene can become a profitable company with attractive margins…
Agenda Financial Situation and Outlook Pemex Exploration and Production Pemex Industrial Transformation Pemex Logistics Pemex Ethylene Pemex Fertilizers Pemex Trading Safety and Sustainability Final Considerations
Pemex Fertilizers: Context, challenge and opportunity The fertilizer industry was privatized in 1991 in a fragmented manner. The ammonia production plants, which are an essential input, remained in Pemex. As a consequence, the cost…
Agenda Financial Situation and Outlook Pemex Exploration and Production Pemex Industrial Transformation Pemex Logistics Pemex Ethylene Pemex Fertilizers Pemex Trading Safety and Sustainability Final Considerations
Pemex International (PMI): Challenge and opportunity In terms of traded volume PMI is the 7th largest trader in the world, with 2.2 million barrels traded per day. The challenge is to transform itself from an exclusive trader for…
Agenda Financial Situation and Outlook Pemex Exploration and Production Pemex Industrial Transformation Pemex Logistics Pemex Ethylene Pemex Fertilizers Pemex Trading Safety and Sustainability Final Considerations
PEMEX has an absolute commitment to its workers safety 6 Best performance of the frequency index* The system for 4.92 5 Pemex Pemex management of Safety, Health at Work and Reference*** Referencia*** Environmental…
Environmental protection and sustainable development are a priority for PEMEX Action lines 2016-2021 Reduce carbon Cogeneration in diverse process centers. dioxide equivalent Reduction of gas burning in assets in shallow water, by…
Agenda Financial Situation and Outlook Pemex Exploration and Production Pemex Industrial Transformation Pemex Logistics Pemex Ethylene Pemex Fertilizers Pemex Trading Safety and Sustainability Final Considerations
Final Considerations PEMEX has tackled the short run challenges with determination and today has stable finances. Budget adjustment (costs reductions and outlook of investments) Strengthening of financial balance (Federal Government…
ANNEXES
Annex. Business Opportunities: Exploration & Production Projects Year Scheme Trion 2017 Farmout Ogarrio 2017 Farmout Crdenas-Mora 2017 Farmout Ayn-Batsil 2017 Farmout Ayatsil-Tekel-Utsil 2017 Farmout Chicontepec 2017 Farmout 7…
Annex. Business Opportunities: Drilling & Services Projects Year Scheme Co-investment to acquire marine drilling equipment 2019-2020 Joint venture (jack ups) Acquisition and overhaul of drilling equipment and 2017-2019 Joint venture…
Annex. Business Opportunities: Industrial Transformation Projects Year Scheme Coker Partnership in Tula 2017 Tolling Partnership to improve operations and/or reconfigure: Capital partner + Operating partner Tula (phase II) 2017…
Annex. Business Opportunities: Cogeneration & Services Electric Power (MW) Estimated Water Vapor Projects PEMEX Investment Capacity (t/h) Consumption (MMUSD) Nuevo Pemex Cogeneration Plant 300 300 800 - Salamanca External…
Annex. Business Opportunities: Fertilizers Projects Year Scheme A 150 MMcfd contract subscription is in process of Cosoleacaque Petrochemical Complex: Long-term consolidation. 2017 natural gas supply. Additional 60 MMcfd to…
Annex. Business Opportunities: Ethylene Projects Year Scheme Construction of a propane cracker and a glycol plant 2018-2019 Joint venture Overhaul of polyethylene plants 2017 Co-investment with third parties Moreleos and…
Annex. Business Opportunities: Logistics Projects Year Scheme Service contracts Water management capacity increase and crude oil 2017-2018 (Investment + operation + stabilization maintenance) Operator partner contributing Storage…
Annex. Business Opportunities: PMI Projects Year Action 20172018 Establish strategies to place additional oil through Increase oil deliveries from the Pacific coast collaborative relations 2017 Restore Istmo supply to clients on…
Annex. Pension System Modifications Modifications for workers that joined PEMEX before the Energy Reform Unionized After the Energy Reform Before the Energy Reform More than 15 years of service Less than 15 years of service 55…
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