Mexicos Energy Reform & PEMEX as a State Productive Enterprise January 2015
Content PEMEX today Energy Reform New era of PEMEX Financials 2
A PEMEX Transformation is Underway Round Zero leaves our reserve base 1 largely intact 13.4 MMMboe proven reserves 6 Stronger finance; taxes will drop from 70% today to 65% by 2019 Low replacement cost 7 Opening of…
A Snapshot of PEMEX Today Exploration and Production Downstream International Crude oil production: 2,436 Mbd1 Refining capacity: 1,690 Mbd 8th largest oil producer worldwide2 Natural gas production: 5,747 MMcfd1,3 Strategically…
Low Cost Production and Replacement Production Costsa,b Finding and Development Costsc,d USD 2013 / boe USD 2013 / boe 7.91 16.13 14.91 6.67 6.94 12.48 13.24 13.77 5.57 6.34 11.27 5.27 2008 2009 2010 2011 2012 2013 2008 2009…
Building on Our Significant Infrastructure Production Capacity Producer Zone Refinery Refining Petrochemical Center Atmospheric distillation capacity 1,690 Mbd Gas Processing Center Gas Processing Sales Point Sour Nat Gas 4.5…
Content PEMEX today Energy Reform New era of PEMEX Financials 8
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…
Updating an Outdated Energy Model Constitutional A clear distribution of roles: owner, regulator, Secondary Reform operating entities and operating companies Legislation The Ministry of Finance defines fiscal regime, The Ministry of…
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.…
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.…
Content PEMEX today Energy Reform New era of PEMEX Financials 13
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…
Migration: Onboarding New Partners in E&P Increasing execution Expected capacity & Investment 2P Reserves Investment (MMboe)1 (USD billion) Fields First stage: First block 569 2.6 Poza Rica-Altamira and Burgos Assets 2014 22…
Mexicos Next Production Frontiers Deepwater Infrastructure1 Shale Potential2 United States United Gulf of Mexico States Mexico Mexico Cuba Substantial potential in both frontiers 1 Source: National Geographic. 2…
Downstream Business Portfolio: Main Projects Challenges Main Projects Investments in supply infrastructure Increase operational (Project Gulf-Center), Refining efficiency Refineries reconfiguration Infrastructure for better fuels…
Revamping Pemex Refineries Objectives: Investment in high conversion plants to increase profitability by producing higher value distillates products. Increase process capacity to receive more heavy oil volumes (i.e Maya Crude).…
Refining: Clean Fuels Projects To address changes in specifications for distillate Ultra Low Sulfur (ULS) fuels in accordance with the needs of the Mexican market, a set of projects is developed for the six refineries at the National…
Los Ramones Phase I & II: Success Case Project Los Ramones phase I Scheme PEMEX Gas signed a long term transport service Los Ramones I is being constructed by Gasoductos del contract with the company Gasoductos del Noreste Noreste,…
Trading Opportunities: PEMEX as a key player in the Pacific market (Transoceanic Corridor Project) Pemex has identified the opportunity to move product from the US Gulf Coast to the Pacific markets Mexico has a privileged…
Petrochemicals: Modernization and Expansion of Aromatics Train at Cangrejera P.C. Scope Modernization of the aromatics chain Technology upgrade Broad operational flexibility Lower energy consumption and overall cost of…
PEMEXs Power Cogeneration Potential PEMEXs productive processes consume large amount of energy. Cadereyta Strategy for taking advantage of cogeneration potential (PEMEXs Business Plan). E.E. Generation Project (MW) On April 2013…
Content PEMEX today Energy Reform New era of PEMEX Financials 25
Income Statement Evolution Income Statement USD billion 140 Historically, from 2007 to 2012, taxes have accounted 120 for 119% of operating income 100 Sales and 120% of before-tax 80 EBITDA profits. 60 Taxes In 2013, taxes amounted…
Balance Sheet Evolution Liability and Equity Profile USD billion 17 18 21 In addition to internal cash 17 flows, PEMEX has resorted to 15 87 23 99 86 financial markets to finance its 15 62 investment projects. 9 54 49 44…
PEMEX One of the Most Profitable Companies in 2013 Percent Gross Margin EBITDA Margin 61.74 50.36 49.38 36.78 23.34 15.87 15.44 19.56 20.25 14.13 13.93 14.73 7.72 10.72 Statoil PEMEX Petrobras Chevron Shell Exxon BP BP Shell…
CAPEX Financing Net Indebtedness Net indebtedness Total debt as of September 2014 is USD 74.0 billion which (USD billion) represents 0.61x sales and 1.08x EBITDA CAPEX 39.11% 26.66% 24.49% 14.20% 18.62% 8.35% 23.98 25.51 27.27…
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…
Financial Strategy Options International Market Issues New Structures Issues in MXN Diversify sources of financing in efficient Structured Products (Development Capital MXN is both more efficient in terms of cost and deep markets…
What differentiates PEMEX Strengths Human capital Execution flexibility Selected participation in new projects Sustainability mandate through corporate governance, and social & environmental responsibility Improved efficiencies…
Potential Savings from a New Pension Scheme Accrued obligations1 The Government offered to capitalize MXN billion PEMEX for a proportional amount of December 31st, 2013 the Pension Liability reduction that results from the modifications…
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