1. An Overview to Energy Sector in Mexico
February 2012
Cycles
&
Trends
An Overview to Energy Sector in Mexico

2. Index Chapter II Energy Sector Oil & natural gas reserves Production
Exports
Scenarios
Investments
Pemex strategies

3. Chapter II
Energy Sector

4. Oil & Natural Gas Reserves
At January 1st, 2011, hydrocarbon proven reserves are 13,796 billion barrels of crude oil, 74% corresponds to crude oil; 9% to condensates and plant liquids, and the rest, 17% , to dry gas.
28.8
43.1
13.8 15
14.3 5 10 20 25 30 35 40 45 50
Proven
Probable 2P
Possible 3P
Reserves at January 1st , 2011
(Billion boe)

5. Reserves Evolution Oil & Natural Gas Reserves
Hydrocarbon reserves evolution 70
(Billion barrels)
58.2 60
56.2
Possible
Probable
Proven
53.0
50.0
48.0 50
46.9
46.4
45.4
44.5
25.1
43.6
43.1
43.1
23.5
21.9 40
20.1
18.9
17.6
16.5
15.5
14.7
14.3 14
13.8 30
21.2
21.3 17
15.8
15.8
15.3
15.1
14.5 20
20.8 16
14.2 15 10 12 13
13.1
13.4
14.2
14.6
14.6
14.7
14.8
14.3
11.3
10.3
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011

6. Oil & Natural Gas Reserves
From 2010 to 2011, crude oil reserves 3P increased by 62 MMboe, mainly due incorporation of 878 MMboe exploratory crude oil. Proven reserves decreased by 259 MMboe as result of production of 940 MMboe in 2010.
10.1
9.7
10.4 10
10.7
10.2 5 15 20 25 30 35
2009
2010
2011
Possible
Probable
Proven
30.9
30.5
30.6
Evolution of crude oil reserves
(Billions of barrels)

7. Oil & Natural gas reserves
From 2010 to P reserves of natural gas increased in 39 Billion cubic feet, due mainly discoveries of 2,724 billion cubic feet of gas. In this way, it was possible to offset a significant production volume of 2,562 billion cubic feet that were extracted during 2010.
22.6
23.7 23
20.1
20.7
20.9
17.6
17.3
16.8 10 20 30 40 50 60 70
2009
2010
2011
Possible
Probable
Proven
60.4
61.2
61.3
Natural Gas Reserves Evolution
(Billion cubic feet)

8. Oil & Natural Gas Reserves
Between exploratory activities have allowed incorporate sustained volumes annually of reserves up to 1,000 MMboe, this situation has made possible fulfill commitments of incorporate reserves by exploration .
554.1
377.8
569.7
894.8
229.1
492.6
548.6
490.3
312.1
182.9
182.8
363.8
388.9
230.8
200
400
600
800
1000
1200
1400
1600
1800
2000
2007
2008
2009
2010
2011
Possible
Probable
Proven
966.1
1,053.2
1,482.1
1,773.9
1,437.8
Evolution of hydrocarbon discoveries
(MMboe)

9. Oil & Natural Gas Reserves
Recovery rate of proven reserves will reach a value of 100% in 2012, due reclassification of probable reserves to proven reserves, these will come from the development of projects such as Ku-Maloob Zaap, Crudo Ligero Marino, Bellota-Chinchorro and Chicontepec, among others. 10 20 30 40 50 60 70 80 90
100 %
25.5
22.7
26.4 41
50.3
71.8
77.1
85.8
2004
2005
2006
2007
2008
2009
2010
2011
2012
Evolution of recovery rate of proven reserves
(%)

10. Production
In Mexico, oil production has decreased since Main reason is declining of Cantarell Asset. This field had its maximum production in and then began a descendant trend in a constant way.
Crude Oil Production in Mexico, (Thousands of barrels per year)

11. Production
In 2011 Pemex achieved to consolidate stability in crude oil production. Pemex modified descendant trend during period , when registered an accumulative total declining of 475,000 barrels daily.
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
4,000.0
Heavy
Light
Ultra light
156.9
134.8
135.3
144.1
180.4
198.6
210.4
269.7
320.0
336.0
846.6
810.7
789.6
802.3
831.5
837.7
815.5
811.8
834.4
794.0
2,173.7
2,425.4
2,458.0
2,387.0
2,243.8
2,039.4
1,765.6
1,529.0
1,422.0
1,419.0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Crude Oil Production by type
(Thousand barrels per day)
3,177
3,370
3,382
3,333
3,255
3,075
2,791
2,601
2,576
2,550

12. Production
Reversing decline in oil production in recent years was possible primarily by increasing production in Ku-Maloob Zaap, Litoral Tabasco, Crudo Ligero Marino and Ixtal-Manik projects. They have partially compensated decline in Cantarell.
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Ku-Maloob-Zaap
Cantarell
Oil Production of the three main Assets
(MMboe)
Litoral Tabasco

13. Production
Last year Pemex Exploration & Production showed a contraction in extraction of natural gas associated and non-associated, due the declining production in the main regions: Marine, South and North.
0.0
1,000.0
2,000.0
3,000.0
4,000.0
5,000.0
6,000.0
7,000.0
8,000.0
Gas non
associated
Gas associated
Gas non associated
1,271.7
1,305.4
1,379.2
1,563.3
1,863.9
2,266.1
2,613.0
2,598.8
2,550.3
2,477.5
2,205.0
3,239.0
3,118.1
3,119.2
3,009.6
2,954.1
3,090.0
3,445.4
4,319.8
4,480.3
4,542.5
4,390.0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Natural Gas Production by type,
(MMcfd)
(include nitrogen)

14. Exports
On 2011, Pemex achieved a stable crude oil export platform. Lower international sales during 2008 and 2009 are explained by the global economic slowdown that led to a reduced demand of energy.
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
1,800.0
2,000.0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Istmo
Olmeca
Maya
Exports volume crude oil
(Thousand barrels daily)
1,755
1,705
1,843
1,870
1,817
1,792
1,686
1,403
1,222
1,361
1,338

15. Exports
Pemex achieved a significant increase of 37.4% in revenues from foreign sales of crude oil during last year, this due the high price (101 dollars per barrel) registered by Mexican oil in the international market.
14,552.9
11,927.7
13,392.2
16,676.3
21,257.9
28,329.4
34,706.8
37,937.5
43,341.5
25,605.4
35,985.0
49,322.0
0.0
5,000.0
10,000.0
15,000.0
20,000.0
25,000.0
30,000.0
35,000.0
40,000.0
45,000.0
50,000.0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Value of Crude Oil Exports
(Million dollars)

16. Exports
Pemex registered a surplus of 24,996 million dollars (MMUSD) in its trade balance of crude oil, petroleum products, petrochemicals and natural gas on This represent an increase of 28% compared with previous year.
10,000
20,000
30,000
40,000
50,000
60,000
2006
2007
2008
2009
2010
2011
Exports
Imports
Balance
Pemex Annual Trade Balance
(million dollars)

17. Scenario 2012
This year Pemex will continue with its optimization program in all its processes and associated services in order to strengthen areas that create value to the company, identifying those areas that require new strategies to perform efficiently its activities.
2,559.9 Mbd
1,331.3 Mbd
1,175.7 Mbd
445.1 Mbd
6,165.7 MMpcd
MMpcd
Crude Oil
production
Domestic
Market
International
Petroleum
Products imports
Natural Gas
Dry gas
imports
Pemex Strategy for 2012
(Main goals)

18. Scenario 2012
Major resources for investment expenditure segment allow fulfill with maintenance and infrastructure development programs, in order to continue with modernization of the company, while reduction in current expenditure indicates a minor bureaucracy in Pemex operation.
Pemex Budget by Economic Classification, 2012
(pesos & percentage structure)
141,230,386,919,
32%
Current
Expenditure
Investment
Expenditure
301,255,000,000,
68%

19. Current Expenditure Budget
Scenario 2012
Current Expenditure Budget
40,213,237,592
60,059,251,227
7,328,309,969
772,689,260
32,856,898,871
10,000,000,000
20,000,000,000
30,000,000,000
40,000,000,000
50,000,000,000
60,000,000,000
70,000,000,000
Public Services
Public Goods
Budget support
& improving efficiency
Support public function
& management
improvement
Pensions &
retirements
Current Expenditure Budget, 2012
(Pesos)

20. Investment Expenditure Budget
Scenario 2012
Investment Expenditure Budget
301,255,000,000
274,132,762,537
213,527,446
16,087,135
3,658,787,248
17,407,323,789
3,193,598,577
785,996,808
1,846,916,460
50,000,000,000
100,000,000,000
150,000,000,000
200,000,000,000
250,000,000,000
300,000,000,000
350,000,000,000
Investment
Expenditure
Hydrocarbons
economic
infrastructure
Social
Infrastructure
Estate
Other projects
maintenance
Pre-investment
studies
Acquisition
Programs
Other
investments
Breakdown
Pemex Investment Expenditure Budget, 2012
(Pesos)

21. Scenario 2012
Total annual expenditure programmed for Pemex in 2012 amounts to 442,485.4 million pesos, while non-programmed is 34,839.6 million pesos. Pemex Exploration & Production receives 291,075.5 million pesos from programmed expenditure and 34,475.5 million pesos from non-programmed. PEP becomes subsidiary that receives more resources..
Total programmed expenditure, investment expenditure by subsidiary (Million pesos & percentage)

22. Scenario 2012
Strategic Objectives
Based on Business Plan , Pemex Exploration & Production update its strategic objectives for this period as follows:
Maintain an average of oil production between 2.6 to 2.9 MMbd
Maintain an average of gas production between 5.8 to 6.1 MMMcfd
Replace 100% of proven reserves
Maintain production costs in the first quartile and optimize discovery and development costs in order to reach first quartile
Achieve the goal of zero accidents
To be considered as a socially responsible company

23. Investment Programs & Projects
Scenario 2012
Investment Programs & Projects
43.4
30.7
20.7
12.7
6.5
49.5
45.8
39.3
18.3
18.1
13.5
5.6
20.6
52.8 10 20 30 40 50 60
Cantarell
Gas
Strategic
Program
Ku-Maloob-
Zaap
ATG
Burgos
Antonio J.
Bermúdez
Complex
Jujo-
Tecominoacán
2011
2012
PEP, Investment Programs and Projects,
(Thousand Million pesos)

24. Investment Programs & Projects
Scenario 2012
Investment Programs & Projects
5.8
4.2 7
6.1
2.8
5.4
4.9
2.9
2.5
4.5
6.6
4.8
3.2
3.0
0.0
1.0
2.0
4.0
5.0
6.0
7.0
8.0
Chuc
Delta del
Grijalva
Yaxche
Caan
Bellota-
Chinchorro
Poza Rica
Arenque
El Golpe-
Puerto Ceiba
2010
2011
PEP, Investment Programs & Projects,
(Thousand million pesos)

25. Investment Programs & Projects
Scenario 2012
Investment Programs & Projects
2.1
1.1
3.3
3.4
2.4
1.6
1.4
0.6
0.8
0.7
0.5
1.0
1.9
2.3
1.2
0.0
1.5
2.0
2.5
3.0
3.5
4.0
Ek-Balam
Tamaulipas-
Constituciones
Cactus Sitio-
Grande
Och-Uech-Kax
Ayin-Alux
Carmito-Artesa
Cárdenas
Lakach
2011
2012
PEP, Investment Program & Projects,
(Thousand million pesos)

26. Investments
During current administration, investment budget has increased 100%. In 2011, Cantarell projects, Gas strategic program, Ku-Maloob-Zaap, Aceite Terciario del Golfo, Burgos and Antonio J. Bermúdez exert most of total investment.
65,525
67,471
67,657
94,123
116,757
122,161
143,600
164,629
198,247
251,882
268,599
286,338
350,000
50,000
100,000
150,000
200,000
250,000
300,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Pemex Investments
(Billion pesos)

27. Investments
Long-term investments of Pemex Exploration & Production are focus on maintain crude oil production above 2.5 MMbd, gas extraction above 6,100 MMcfd, and reserve replacement rate exceeding 100%. 5 10 15 20 25 30
Exploration 3 4 6
Production 17 18 19
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
Exploration & Production Esteemed Investments
(Billion dollars)

28. Investments
On Business Plan , Pemex forecast a growth rate of 2% regarding crude oil production during period , projection includes implementation of integral contracts for exploration & production.
2,606
2,628
2,675
2,731
2,821
2,450
2,500
2,550
2,600
2,650
2,700
2,750
2,800
2,850
2012
2013
2014
2015
2016
Crude Oil Production,
(Thousand barrels per day)

29. Scenario
For period , oil exports will maintain stability, growth rate for reference period is of 1%, coupled with high prices projected, will maintain high income rates in the country.
1,221
1,252
1,260
1,314
1,271
1,160
1,180
1,200
1,220
1,240
1,280
1,300
1,320
2012
2013
2014
2015
2016
Crude Oil Exports,
(Thousand barrels daily)

30. Scenario
The Energy Information Administration (EIA) reviewed oil production projections in Mexico according different scenarios; in referent scenario for 2011 forecast a decline annual rate of -2.4% for period , projection for 2010 rate was of -2.9% between
0.9
1.8
2.7
3.6
4.5
Reference
High oil prices
Low oil prices
High economic growth
Low economic growth
3.7
3.5
3.2
3.0
2.9
2.8
2.3
1.4
1.5
1.7
1.6
2.4
2006
2007
2008
2009
2010
2011
2015
2020
2025
2030
2035
Mexico: liquid hydrocarbons production scenarios
(million barrels daily)
Historic
Esteemed

31. Exploration & Production
Strategies
Pemex has outlined the following objectives & strategies
Main initiatives by subsidiaries
Increase incorporation of reserves
•Maintain production platform (Cantarell)
•Development of complex fields in an efficient way (ATG,AP)
•Reactivate marginal fields – Incentivated Contracts
•Increase and maintain use of gas
Exploration & Production
Refining
Increase reliability and profitability of the National Refining System
•Deep conversion projects
•Meet gas & diesel standards
•Increase import capacity and strengthen storage & distribution capacities
Gas & PQB
Increase process and transport capacity, according with growth in primary production and demand
Petrochemical
Increase efficiency of profitable chains
•Stimulate participation of private sector in new projects development

32. Cross-cutting initiatives
Strategies
Cross-cutting initiatives
Consolidation and continuous improvement of SSPA
Sustainability and Environment Protection
Security
emex
Operational Reliability
Control of fuels illicit market P
Reliability de ol
Best practices in Projects development
Integral Business Model of supplies
Human Resources Strategy r t
Profitability n o
and efficiency c jo a
Strategic Technological Program
Suppliers Development
Management Processes System B
Sustainability

33. Prioritized initiatives: importance vs. progress
Strategies
Prioritized initiatives: importance vs. progress
Importance
Medium
High
Main initiatives • R e s rv es
Crude oil production
Gas Production C
hicont p c
Deep
waters M
inat
ilá n
Operative
reliability
Human
resources
Fuels quality S
curity
Gas
production N ew
Refin
ery
Oil production Lo g is t i
Reserves
Environmental r
Protection
Use of gas
New Tula Refinery . a l
amanca
Petroleum logistic A
liances
Human resources
Structural issues
Deep waters
natit án
Chi
ont ec
Energy
Operative reliability
Illicit market
Environmental Protection
Energy reform
Corporate governance
Structural issues: –
Fiscal regime
Labor liabilities
Subsidies
Citizen bonds emission m
Corporate Governance
reform
2008
Debt structure diversification -
dvance +

34. Develop complex fields and reactivate marginal fields
Strategies
Complexity
Develop complex fields and reactivate marginal fields n
In short-term, Pemex must use different schemes in order to develop internal capacities in
substantive areas
New schemes proposed are:
Integral contracts
(IC)
Integral field laboratories (
IL)
Transactional contracts
(TC )
Internal capacity
Low
Medium
High IC IL TC
Internal capacity : •
Human resources • T
echnology • P r
ocess C
omplexity: •
Scale •
Technological challenges •
Market service
Deep waters C h
icon t e p ec
Mature s
fields ( R a
ctivation)

35. Reactivate marginal fields: Incentivated Contracts
Strategies
Reactivate marginal fields: Incentivated Contracts
Rates U S$ / b ) Sa n t u a ri o M g ll e s C
rriz
aximum
7.97
9.78
12.31
Winning bid
5.01
9.40 20 1
2012 I II
III IV
Mature Fields .
North Region
hicontepec
Deep
Waters R er v es 3P
(MM e)
104
Current production ( bd
Original volume , 46 5 4 51 Ma l la S ar i
Carr z 32
6 fields grouped in 3 blocks
Reserves 3P of 195 MMboe; Average surface: 312 km2.
First round
(2011):
Mature Fields in the South Region
Award: August18, 2011
Next Bid Calls (2012)

36. This report was prepared by: Sergio Rivas F.
Office:
Mobile:
Mobile:
Please feel welcome to contact Sergio Rivas F.
( for any questions concerning this report.