A New Era for PEMEX PEMEX Investor Day London October 6, 2015 EMILIO LOZOYA AUSTIN Chief Executive Officer
Energy Reform 21 laws New Regulatory Framework 26 rules of implementation Strengthening CRE and CNH Institutions Creation of: ASEA, CENACE, CENAGAS, FMP Productive State-owned Companies Pemex and CFE Round zero Rounds Round 1 2
II. PEMEX TODAY 3
New Legal Framework Transforming PEMEX New corporate governance New fiscal regime Change in Strategy Managerial autonomy Budgetary autonomy New regime for internal control New compensation policy New procurement regime Strategic alliances Round Zero PEMEX: A competitive firm Pension fund restructuring Change in Corporate Structure Cultural Change A L I G N 4
Transforming PEMEX: Strategy Change in strategic vision Leading competitor in each relevant market Choice of markets Choice of partners Choice of business model in each market 5
Transforming PEMEX: New Corporate Structure Exploration and Production Optimal output Sustainable growth of reserves Downstream Operational efficiency for competitiveness Focused growth in selected markets New affiliates Cogeneration Drilling services Logistics Ethylene Fertilizers 6
Transforming PEMEX: Corporate Culture Cultural change Values, attitudes and behavior for competitiveness Strengthen leadership and develop human capital Meritocratic compensation policy Career plans PEMEX s Corporate University Continuous acquisition of skills and competencies 7
III. NEW E&P PARTNERSHIP OPPORTUNITIES 8
Low Production and Replacement Cost Production Costs a,b USD @ 2013 / boe 5.57 6.34 6.94 7.91 8.09 Finding & Development Costs c,d,e USD / boe 13.79 13.23 12.54 14.35 17.97 2010 2011 2012 2013 2014f Production Costs 1 USD / bpce f 2010 2011 2012 2013 2014 Finding & Development Costs 2,3,4 USD / bpce PEMEX 2013 PEMEX 2014 Statoil Total Exxon Eni Conoco BP Shell Chevron Petrobras 7.91 8.09 8.51 9.24 11.48 12.19 12.35 13.16 14.35 17.10 17.22 PEMEX 2013 BP Exxon Conoco PEMEX 2014 ENI Chevron Petrobras Statoil Shell Total 14.35 15.19 17.62 17.93 17.97 19.99 21.35 23.66 25.34 25.77 32.40 a) Data in real terms after adjustment for the effect of inflation. b) Source: 20-F Form 2013 c) PEMEX estimates 3 years average d) Includes indirect administration expenses. e) Proved Reserves. f) For analysis purposes, the 2014 production cost 8.22 USD/boe is estimated at 2013 USD = 8.09 USD/boe 1. Source: Annual Reports and SEC Reports 2013 2. Estimates based on John S. Herold Company Performance Metrics, 2013 3. 3 years average performance calculations 4. Proved Reserves 9
New era in Mexico implies significant opportunities to grow Million barrels per day Stage 3 P r o d u c t i o n Stage 1 2.3 2.4 Round Zero PSCs Stage 2 2.4 2.6 Round Zero plus future Rounds PSCs Shallow water Extra-heavy oil Unconventional South Region 2.6 3.0 Round Zero plus future Rounds PSCs Extra-heavy oil Unconventional Deepwater Time Source: Pemex Exploration and Production 10
PEMEX s Reserves and Prospective Resources Gas and oil basins Billion barrels of oil equivalent 28.4 Non-conventional (shale oil and gas) 1) Reserves as of January 1, 2015; only includes permanent blocks Source: Pemex Exploration and Production Basin Prospective Reserves Cumulative resources Prod. 1P 2P 3P Nonconv. Conv. (90%) (50%) (10%) Southeast 47.8 10.8 14.2 18.2 12.5 Tampico Misantla 6.3 0.7 4.0 7.5-3.3 Burgos 2.5 0.2 0.4 0.5-1.5 Veracruz 0.8 0.2 0.2 0.2 0.6 Sabinas 0.1 0.0 0.0 0.1-0.4 Deep water 0.0 0.1 0.4 1.8 5.2 Yucatán Platform - Total 57.5 12.0 19.2 28.3 18.3 5.2 Development and production projects Exploration projects 11
Round Zero: PEMEX s Assignments Surface area: 34.7 thousand mi 2 (90 thousand km 2 ) 83% of Mexico s 2P reserves 21% of Mexico s prospective resources Production platform: 2.5 MMbd for 20.5 years Source: SENER, CNH 12
Round One Calendar Areas and fields Shallow water exploration Shallow water extraction Mature fields Deep water and extra heavy oil unconventional Chicontepec Bid launch date December 2014 February 2015 May 2015 TBD Data rooms open January 2015 March 2015 May 2015 TBD Areas 14 exploration contacts 9 fields in 5 contracts 25 areas (licenses) Source: SENER, CNH 13
IV. OTHER PARTNERSHIP OPPORTUNITIES 14
Gas pipeline projects in Mexico 13 Gas Pipelines length (2013): 11,142 km 11 Gas Pipelines new length : 19,436 km (1) Total investment : USD 18,014 M (2) National gas pipelines Length (km) Investment (MM USD) Los Ramones 854 3,095 4 2015 gas pipelines 1 Ramones Phase I 116 587 5 3 12 Comprehensive strategy projects 2 Ramones Phase II 738 2,508 North-East 1,783 2,411 6 8 2 7 1 3 El Encino (Chih.) - Topolobampo (Sin.) 536 1,008 4 Sásabe - Guaymas 505 569 9 5 Guaymas - El Oro 328 429 6 El Oro - Mazatlán 414 405 CFE new gas pipelines 2014-2016 2014 7 projects allocated Length (km) Investment (MM USD) 1,209 2,756 2015 7 projects 2,310 5,823 2016 3 projects 1,100 1,207 Total 4,619 9,786 International gas pipelines 10 Length (km) Investment (MM USD) 12 Agua Dulce -Frontera 200 770 13 Tucson - Sásabe 97 463 Total 297 1,233 Other projects 1,038 1,489 7 Tamazunchale 235 448 8 Zacatecas 172 70 9 Morelos 172 440 1 0 Mayakán 76 136 11 Chihuahua (3) 383 395 Total 3,675 6,995 1) Includes projects from the Comprehensive Strategy, and the new 222 km from Jáltipan-Salina Cruz gaspipe 2) Estimated 3) Chihuahua gas pipeline started operations on July 2013 15
Other Opportunities Infrastructure Fertilizers Cogeneration Financial partners Strategic partners Strategic partners Financial partners Strategic partners Petrochemicals Strategic partners 16
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