Content 1 A Snapshot of Mexico & PEMEX Upstream Midstream & Downstream Overall Financial Performance Business Outlook 1
Mexico Snapshot Today, Mexicos fundamentals are stronger, allowing to face external shocks in a better position GDP per Capita, PPP Exports of Goods and Services USD thousand USD Billion 18 700 1,400 Brazil 1,300 600 Brazil 15…
O&G: The Industry Moving the World According to the IEA, by 2040, crude oil demand is expected to grow 6% up to 103 MMbd, while natural gas consumption increases by 50% Btoe 9.4 World energy 10.0 consumption 2014 100% = 9.4 Btoe2…
PEMEX: The Most Important Company in Mexico 8th Crude oil producer 8th Drilling company 5th Producer of petrochemicals in Main producer of oil, gas and Mexico refined products in Mexico 1st Producer of phosphates in LATAM 14th…
Distribution of PEMEXs Reserves1 PEMEX holds 95% of Mexicos hydrocarbon reserves MMMboe (billion barrels of oil equivalent) Prospective Reserves Resources2 Oil and Gas Basin Gas 1P 2P 3P Non Conv. (90%) (50%) (10%) Conv.…
Environmentally Conscious and Socially Responsible Company We strive to minimize the impact of our operations to the environment and to maximize the benefits that a sustainable operation brings Environmental Sustainable Emissions…
Key Highlights / First Half-Year Recap Joint venture with Air Liquide for the supply of hydrogen to our Tula refinery Consortium formed by PEMEX, Chevron and Inpex was awarded Block 3 North in deep waters of the Gulf of Mexico Trion…
Key Highlights 2Q17 Positive net result of 121 billion pesos as of first half 2017 Third consecutive quarter with positive net results Crude oil production remains stable: it averaged 2,013 Mbd Gas flaring recorded its best…
Content A Snapshot of Mexico & PEMEX 2 Upstream Midstream & Downstream Overall Financial Performance Business Outlook 9
Upstream: Current Status and Challenges PEMEX continues to be a main player in the O&G industry The challenge has been replacing Cantarell, a giant field that produced by itself 2 MMbd, to stabilize and eventually increase production…
Industry Cost Leader The development of exploitation strategies focused on shallow waters has allowed PEMEX to maintain very competitive production costs, as compared to most of its peers in the oil and gas industry. Lower production…
Upstream: New Production Frontiers Underinvestment and reduced access to know-how has limited intensive exploitation of new complex frontiers to stabilize and increase production Deepwater Infrastructure1 Shale Potential2 1…
Upstream: Business Plan With profitability as its ultimate goal, the Business Plan contemplates increased production and investment through different business schemes such as JVs and farm-outs to maintain and gradually increase the…
Upstream: Recent Developments (Trion & Block 3) Trion Perdido Fold Belt Block 3 PEMEXs Assignments Trin Farm-Out Round 1.4 Deep Waters Great White Oil and Gas Field 28 3D Seismic Km 179 Km Matamoros 1 Maximino Block 3 North…
Upstream: Upcoming Developments PEMEX will focus on the development of projects through joint ventures and migrations to share risks, obtain technology, know-how and improvements within the upstream division Farm-outs (Round 2)…
Content A Snapshot of Mexico & PEMEX Upstream 3 Midstream & Downstream Overall Financial Performance Business Outlook 16
Midstream: Investment Opportunities Further gasoline storage capacity and pipelines are required in Mexico. The U.S. has 27 times more infrastructure to supply fuel and 45 times more storage terminals than Mexico Gasoline Storage Days…
Downstream: Current Status and Challenges The challenge is to reverse the economic and operational losses of close to MXN 100 billion Non-Scheduled Shutdowns Index Equivalent Distillation Capacity Usage % % 35 31.0 29.9 90 30 26.3 77.7…
Midstream & Downstream: Business Plan Underinvestment, supply mandates and cost recognition are being and will continue to be addressed in the upcoming years to reverse the accumulated losses in the midstream and downstream…
Midstream & Downstream: Upcoming Developments The Mexican fuels market is moving towards an open, competitive and market-driven price structure Pemex Logistics is offering its non-used storage and distribution capacity to…
Content A Snapshot of Mexico & PEMEX Upstream Midstream & Downstream 4 Overall Financial Performance Business Outlook 21
Positive Trend During 2016 operating losses were turned into income, net result was improved by 58% and the liquidity position was substantially improved. Debts maturity profile was extended to 7.3 years. Operating Income Net Result…
Net Indebtedness Trend Since 2016, financial deficit 250 240 has decreased. In addition, 223 net indebtedness for 2017 is 195 substantially lower than 200 previous years, confirming the Billion Pesos 150 142 trend stated in…
Diversified Debt Structure PEMEXs portfolio strategy has prioritized the development of new sources of financing to diversify its investor base and currencies To reduce external impacts, the company has chosen a hedging strategy that…
Credit Rating Agencies recognize PEMEXs strategic importance for Mexico 2017 PEMEX annual rating revisions highlight: Expectation of Close linkage to improved Mexican Key energy Stable finances profitability Government & supplier…
Markets respond positively to PEMEXs strategy PEMEXs efforts and business strategy have yielded tangible results, as shown in the spread between PEMEXs 10Y benchmark and both Mexicos UMS 10Y and US Treasury. Source: Bloomberg 26
Investment Considerations The joint efforts have finally begun to bear fruit and to reflect in the results of the year. PEMEX has now stable finances, with positive trends, however, there is still room for improvement. As a result of…
Content A Snapshot of Mexico & PEMEX Upstream Midstream & Downstream Overall Financial Performance 5 Business Outlook 28
Financial Outlook: Scenarios with Realistic Premises 2017 marks an inflection point: Primary Surplus (first time since 2012): 8.4 billion pesos Attainable Production Platform: 1.944 million barrels per day Conservative Price…
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