Post on 01-Dec-2014
description
PemexPemex’’ss ReformReformandand Investment Projects Investment Projects
20092009--20122012
February 10, 2009
Bookmarks: MEI
2/30
• This presentation contains forward-looking statements. We may also make written or oral forward-looking statements in our periodic reports to the National Banking and Securities Commission (CNBV) and the U.S. Securities and Exchange Commission (SEC), in our annual report, in our proxy statements, in our offering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties.
• We may include forward-looking statements that address, among other things, our:
− drilling and exploration activities;
− import and export activities;
− projected and targeted capital expenditures and other costs, commitments and revenues; and liquidity, etc.
• Actual results could differ materially from those projected in such forward-looking statements as a result of various factors that may be beyond our control. These factors include, but are not limited to:
− changes in international crude oil and natural gas prices;
− effects on us from competition;
− limitations on our access to sources of financing on competitive terms;
− significant economic or political developments in Mexico;
− developments affecting the energy sector; and
− changes in our regulatory environment.
• Accordingly, you should not place undue reliance on these forward-looking statements. In any event, these statements speak only as of their dates, and we undertake no obligation to update or revise any of them, whether as a result of new information, future events or otherwise.
• These risks and uncertainties are more fully detailed in PEMEX’s most recent PEMEX prospectus filed with the CNBV and available through the Mexican Stock Exchange (www.bmv.com.mx) and the Form 20-F filing, as amended, with the SEC (www.sec.gov). These factors could cause actual results to differ materially from those contained in any forward-looking statement.
FORWARD-LOOKING STATEMENT
Bookmarks: MEI
3/30
• The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this document, such as total reserves, probable reserves and possible reserves, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, “File No. 0-99”available from us at www.pemex.com or Marina Nacional 329 Floor 38 Col. Huasteca, Mexico City 11311 or at (52 55) 1944 9700. You can also obtain this Form from the SEC by calling 1-800-SEC-0330.
• EBITDA, free cash-flow and discretionary cash-flow are non-GAAP measures.
CAUTIONARY NOTE
Bookmarks: MEI
4/30
INDEX
1. Pemex Reform
a. Strengthening of operations
b. Planning & Control
c. Policy & Regulation
2. Procurement and EPCs
3. Investment program: 2009-2012
Bookmarks: MEI
5/30
Pemex Reform: Introduction
As a result of President Calderon’s initiative, an ample legal reform was passed by Congress
Pemex is the main beneficiary of the reform
Not everything was achieved, but it’s an important first step, covering three main aspects:
Strengtheningof Operations
Planning &
Control
Policy&
Regulation
Bookmarks: MEI
6/30
I. Strengthening of Pemex’s operations Strengtheningof Operations
Planning &
Control
Policy&
Regulation
HIGHLIGHTSa) Management
Corporate Governance
Pemex’s Board is strengthened, with new functions and responsibilities
Integration
Specialized Board: four independent, professional members join the Board (approved by the Senate)
New Rules
Professional Board members will be incorporated into decision-making process
A wholly new law, specifically for Pemex, which regulates not only organization and operations, but also procurement, construction, budgeting, debt and
administrative responsibilities
Petróleos Mexicanos Law
Bookmarks: MEI
7/30
Committees
OrganizationMore flexibility to decide on the optimal organization for the company
Business unitsThe General Director may propose to the Board the creation of business units to carry out productive activities
Subsidiaries and non-state-owned companiesThe General Director may propose the creation of subsidiaries with private participation for activities not reserved to the Mexican State
1) Audit and performance evaluation2) Strategy and investments3) Compensations4) Purchases, leasing, construction & services procurement5) Environment and sustainable development6) Transparency and accountability7) Technological research and development
Seven specialized committees are created to enhance the Board’s
functions
Strengtheningof Operations
Planning &
Control
Policy&
Regulation
Bookmarks: MEI
8/30
b) Operation and contractual regime
Specific contractual regime
Tailored to Pemex’s productive activities
Specific procedures
New requirements will facilitate awarding contracts, in modalities more adequate for the oil & gas industry
Special procurement and bidding procedures
New specific rules for Pemex projects are established
Direct awards (no bidding necessary)
Bidding in a restricted group
o For cases related to technological innovation, as well as engineering, research, training and studies
Strengtheningof Operations
Planning &
Control
Policy&
Regulation
Bookmarks: MEI
9/30
Special contractual modalitiesNew contractual modalities, in addition to those considered in the Public Works Law:
Paymento New modality, based on pre-determined formulas or schemeso Full certainty on compensation methods and quantities
Contract updateso Revisions to multi-annual contracts due to technological advances, changes
in market prices and factors contributing to improving the project’s efficiency
Incentives and penalizationso May be established based on positive or negative environmental impact, or
non-compliance with scheduling or quality indicators
Variable compensationo May be awarded due to faster project execution, the appropriation of (or
benefit from) new technologies by Pemex, or other circumstances which increase Pemex’s profit and improve the project’s performance
Strengtheningof Operations
Planning &
Control
Policy&
Regulation
Bookmarks: MEI
10/30
Schemes to support suppliers and contractors
Pemex will design a program which will include a diagnosis, specific objectives and quantitative goals to gradually achieve a national content of at least 25%
An annual procurement fund at NAFIN (national development bank) of 5 billion pesos in 2009 and 2.5 billion in 2010, to promote the development of Pemex’s suppliers
Strengtheningof Operations
Planning &
Control
Policy&
Regulation
Bookmarks: MEI
11/30
c) Fiscal and financial
Specific budgetary regime
More autonomy for budgetary planning and execution
Financial balance goals
Pemex will propose every year to the finance ministry and Congress a five-year financial program, as part of its strategic business plan
Budgetary modifications
The Pemex Board will approve changes to the budget during the course of the year (subject to the “financial balance” goals)
Autonomy in deciding budget allocation for operation or investment
Excess income
Pemex will be able to use gradually a larger proportion of its excess income (above its income estimate)
From 35% in the 1st year to 100% in the 7th year, subject to meeting several specific goals, to be detailed in its business plan
Strengtheningof Operations
Planning &
Control
Policy&
Regulation
Bookmarks: MEI
12/30
Budget execution calendar
Pemex will be able to execute its budget as defined by the Board, without needing the approval of the finance ministry
Budgetary execution is made independent from the public sector’s financial situation
Investment project registration
The Board will authorize the budget and use of resources for investment projects
Various requirements for registering projects within the finance ministry are eliminated or simplified
Transition period
Seven years for budgetary autonomy, subject to meeting business plan goals
Transfer prices
Annual study performed by an independent expert in July. Will be published.
Strengtheningof Operations
Planning &
Control
Policy&
Regulation
Bookmarks: MEI
13/30
Specific regime for debt
PIDIREGAS
PIDIREGAS financing is eliminated and
substituted by budgetary resources
Pemex investment expense will no
longer be part of public sector
financial balance (more flexible
investment ceiling, tied to Pemex’s
resource availability)
DEBT ISSUANCE
Pemex will be able to issue debt
according to the company’s priorities and consistent with the public sector’s financing program
Pemex will be able to tap local and foreign financial markets without specific approval from the finance
ministry
STABILIZATION FUND
Pemex may use the resources
accumulated until 2008 in the
Stabilization Fund for Investment in
Infrastructure (12 billion pesos). This will enable startup for the construction
of new refining capacity, among other projects
CITIZEN BONDS
Credit titles that do not award property
or control rights
Their yield will reflect Pemex’sfinancial results
after taxes
Will boost transparency and accountability in
Pemex’s operations and finances
Strengtheningof Operations
Planning &
Control
Policy&
Regulation
Bookmarks: MEI
14/30
New fiscal modalities for strategic projects:
1. Rate applicable for 2009
Acknowledges the higher complexity and cost of new fields
Chicontepec
71.5% rate and cost-deduction cap of USD $11/bl, compared to
74.5%1 and USD $6.5/bl in general regime
Deep waters
Rate range of 60%-71.5% (depending on oil
price level) and cost-deduction cap of USD
$16/b
Abandoned fields
Minimum additional production requirement is eliminated to grant more favorable fiscal regime
Strengtheningof Operations
Planning &
Control
Policy&
Regulation
Bookmarks: MEI
15/30
Business plan (five-year projection)Five-year financial-balance goal scenario
II. Planning and controlStrengtheningof Operations
Planning &
Control
Policy&
Regulation
Planning
Control
Pemex will be subject to new and additional control, transparency and accountability mechanisms
Board Audit and Performance Evaluation committee A corporate commissioner to support the Board in looking out for the interests of citizen bond holders
Reports
Reports specified by law: from the General Director to the Board; from the corporatecommissioner to bond holders
Bookmarks: MEI
16/30
Pemex will be subject to the energy policy defined by the ministry, in terms of reserve replacement and production platform
Pemex will obtain a formal opinion (‘dictamen’) for the technical aspects of its exploration and exploitation projects from this Commission, and it will subject itself to the technical rules established by it
New authority in regulating prices for first-hand sales, pipeline transportation and storage for fuel-oil and basic petrochemicals
Will establish the National Energy Strategy, with a 15 year horizon, which will be approved by Congress
III. Policy and regulationStrengtheningof Operations
Planning &
Control
Policy&
Regulation
SENER
National Hydrocarbon Commission
National Energy Council
Energy Regulatory Commission
(CRE)
Bookmarks: MEI
17/30
1. Pemex Reform
a. Strengthening of operations
b. Planning & Control
c. Policy & Regulation
2. Procurement and EPCs
3. Investment program: 2009-2012
Bookmarks: MEI
18/30
Reform Timeline
Executive, SHCPArt. 14 provisional Pemex Law
(90 days after the Law is signed)
Fund to promote the development of Pemex suppliers by NAFIN
FIRST MONTHFebruary
General Director, BA
Art. 31 fract. III Pemex Law
(Annual)
Annual operational and financial program
PEMEXArt. 49 fract. I Pemex LawFive-year financial-balance goal scenario
PEMEX and subsidiaries
Art. 13 provisional Pemex Law
(Annual)
Publication of a Procurement plan for small and medium companies
PEMEX and subsidiaries
Art. 50, and 13 provisional Pemex Law
(180 days after the Law has been signed)
Strategy to support Mexican and foreign suppliers and contractors
PEMEX and BAArt. 19 fract. III Pemex Law
(Yearly basis with a five-year projection)
Business PlanFOURTH MONTHMay
RESPONSIBLELEGAL FOUNDINGACTIONMONTH
Bookmarks: MEI
19/30
Director GeneralArt. 13 provisional, Pemex Law
(Every six months)
A report on the progress of the quantitative goals set by the strategy to promote Mexican suppliers and contractors
ELEVENTH MONTH
December
RESPONSIBLELEGAL FOUNDINGACTIONMONTH
Reform Timeline (cont.)
Bookmarks: MEI
20/30
Pemex Law, Art. 53Oil industry catalogue of unit prices for procurement and contracting
Pemex Law, Art. 19 Fract. IV-j; and Art. 53
Special contractual regime:
Procurement and contracting strategies and procedures
Pemex Law, Art. 53 fract. VIMechanisms for the determination of product prices
Pemex’s Board committee for purchases, leasing and procurement of services
Pemex Law, Art. 60 y 61New contractual models for construction and procurement of services for substantial activities
RESPONSIBLELEGAL FOUNDINGSPECIAL CONTRACTUAL REGIME
Special procurement conditions
Bookmarks: MEI
21/30
1. Pemex Reform
a. Strengthening of operations
b. Planning & Control
c. Policy & Regulation
2. Procurement and EPCs
3. Investment program: 2009-2012
Bookmarks: MEI
22/30
Maintain crude production platform within 2.7-2.8 mmbd, and seek new opportunities to increase production to 3.0 mmbd, by 2015Maintain natural gas production above 6.0 bcfdIncrease reserve-replacement ratios to at least 100% towards 2012Re-establish reserve/production ratio to 10 years (after 2012)Reduce gasoline imports, by investing in conversion of residuals at existing refineries, as well as in additional refining capacityClose maintenance gaps to improve security and facilities’ integrityReduce environmental liabilities Reduce project-execution gaps
The investment strategy includes initiatives and projects in all company areas, with the objective of meeting the following medium and long-term goals:
Investment Strategy: Main Goals
Bookmarks: MEI
23/30
Petrochemicals3.7%
Gas & Basic Petrochemicals2.0%
E&P77.3%
2009 2009-2012
Exploration & Production 16,899 61,151
Refining 1,920 13,116
Gas & Basic Petrochemicals 353 1,609
Petrochemicals 208 2,929
Corporate 64 304
TOTAL 19,444 79,110
USD Million
Source: PEF 2009; exchange rate: 11.7 pesos/dollar
Refining16.6%
Does not include third-party projects (private pipelines, co-generation)
Corporate0.4%
Investment Portfolio: 2009-2012
Bookmarks: MEI
24/30
E&P: MAIN INVESTMENT PROJECTS 2009-2012
12,233Class IV: +35/-20%
2,562• Incorporate new reserves and re-classify existing reserves in order to reach a reserve/production ratio of 10 yearsExploration
PROJECT GOAL / REACH 2009 2009-2012
Chicontepec
• Contribute in meeting E&P goals by accelerating the recovery of oil and gas
• 2009 Activities: Finishing 1,063 wells, 501 major repairs, 274 minor repairs
2,314 11,149 Class III: +25/-15%
Cantarell
• Heavy crude and gas production through pressure maintenance, implementing an enhanced oil recovery system and optimizing production systems
• 2009 Activities: Finishing 14 wells, 51 major repairs, 8 minor repairs
2,176 5,559Class III: +25/-15%
Ku-Maloob-Zaap
• Produce oil and gas by drilling wells and implementing a pressure-maintenance system in producing fields
• 2009 Activities: Finishing 15 wells, 3 major repairs, 11 minor repairs
1,565 5,723Class III: +25/-15%
TOTAL 8,617 34,664
* Investment amounts are estimated for 2009-2012, and subject to budgetary approval. Exchange rate: 11.7 pesos/dólar
Investment(mmusd)
Investment is focused on maintaining production platform and increasing reserve-replacement ratio
Bookmarks: MEI
25/30
537Class I: +10/-5%
537• Increase production of value-added fuels
• Build and integrate 9 process plants; auxiliary services
MINATITLÁNRECONFIGURATION
2,209Class V: +50/-30%
279• Increase heavy crude process and production of value-added
dstillates; reduce fuel-oil production
• Includes construction of 8 new plants
SALAMANCARECONFIGURATION
PROJECT GOAL / REACH 2009 2009-2012
CLEAN FUELS –GASOLINE
• Meet Mexican environmental gasoline standards
• Includes 8 post-treatment plants, 2 complementary plants, auxiliary services and 2 storage tanks
250 1,977 Class III: +25/-15%
CLEAN FUELS -DIESEL
• Meet the national sulphur content requirements
• Construction of 5 new plants; 4 storage tanks; modernization of 18 process plants and 21 complementary plants
76 2,601Class V: +50/-30%
MÉXICO CITY SUPPLY
• Guarantee fuels supply to Mexico City area by increasing pipeline capacity and storage at Tuxpan terminal
• New pipeline (113 km) and 5 storage tanks (100 mb each)140 257
Class IV: +35/-20%
* Investment amounts are estimated for 2009-2012, and subject to budgetary approval. Exchange rate: 11.7 pesos/dólar
REFINING: MAIN INVESTMENT PROJECTS 2009-2012 (1/2)
Investment is focused on satisfying national fuels demand and meeting federal environmental requirements
Investment(mmusd)
Bookmarks: MEI
26/30
60Class I: +10/-5%
36• Replace 1,105 Pemex trucks (529 in 2009-10)TRUCK TRANSPORT REPLACEMENT
PROJECT GOAL / REACH 2009 2009-2012
NEW REFINING CAPACITY
• Increase distillate supply, reducing imports and enhancingnational energy security
• Build a new refinery to process heavy crude (300 mbd)66 8,160
Class V: +50/-30%
NEW PIPELINES• Increase transport capacity and optimize existing network
• Build Madero – San Luis Potosí (394 km) and Manzanillo -Guadalajara (314 km) pipelines.
- 730Class V: +50/-30%
TERMINAL CAPACITY
• Increase storage capacity and eliminate risks to population
• Re-locate 2 terminals (Tapachula, Reynosa) and build 2 newterminals (Caribbean, Mexico City)
4 99Class V: +50/-30%
TOTAL 1,389 16,631
* Investment amounts are estimated for 2009-2012, and subject to budgetary approval. Exchange rate: 11.7 pesos/dólar
REFINING: MAIN INVESTMENT PROJECTS 2009-2012 (2/2)
Investment(mmusd)
Bookmarks: MEI
27/30
205Class V: +50/-30%
10
• Supply ethane in Southeast Mexico for processing ethylene derivatives
• Supply pipelines for ethane: Cd.Pemex–Nvo.Pemex (70 km) and Nvo.Pemex–Cactus-Coatzacoalcos (140 km)
ETHYLENE XXI AND COMPLEMENTARY
PROJECTS
PROJECT GOAL / REACH 2009 2009-2012
POZA RICACRYOGENIC PLANT
• Develop capacity to process sweet, wet gas from Chicontepec Project
• Build one cryogenic plant (200 mmcf/d) and two LPG storage spheres (20 mb)
56 228Class IV: +35/-20%
COMPRESSION STATIONS: NORTH
• Increase natural gas transport capacity in Northern Mexico (110 mmcf/d)
• Upgrade Sta. Catarina station (overhaul of two 7,400 h.p. turbo-compressors) and build Cabrito station (two 7,400 h.p. turbo-compressors)
12 27Class V: +50/-30%
COMPRESSION STATIONS:
VALTIERRILLA –LÁZARO CÁRDENAS
• Increase natural gas transport capacity for Valtierrilla -Lázaro Cárdenas pipeline
• Upgrade Valtierrilla station (two 4,700 h.p. turbo-compressors) and build Zirahuen station (two 4,700 h.p. turbo-compressors)
3 34Class V: +50/-30%
TOTAL 81 494
* Investment amounts are estimated for 2009-2012, and subject to budgetary approval. Exchange rate: 11.7 pesos/dólar
GAS & BASIC PETROCHEMICALS: MAIN INVESTMENT PROJECTS 2009-2012 (1/2)
Investment is focused on increasing process and transport capacityInvestment
(mmusd)
Bookmarks: MEI
28/30
400-500Class IV: +35/-20%
• Increase efficiency and lower electric generation costs
• Build a co-generation plant with 300 MW and 550 t/h steam capacity
Co-generationNvo. Pemex
PROJECT GOAL / REACH 2009-2012
Pipeline: Tamazunchale –
San Luis de la Paz –San José Iturbide
• Alternate transport route to Central Mexico that increases transportcapacity (400 mmcf/d) and feeds new electricity plants
• Build the Tamazunchale - San Luis de la Paz (230 km) and San Luis de la Paz - San José Iturbide (56 km) pipelines
1,976 Class V: +50/-30%
Pipeline: Cd. Juarez -Chihuahua
• Meet demand growth and open supply alternatives in Northern border
• Buil the San Isidro–Gloria a Dios (22 km) and Gloria a Dios – El Encino (350 km) pipelines
Pipeline: Punta de Piedra -Poza Rica–Sta. Ana
• Alternate transport route to Central Mexico that increases transportcapacity (400 mmcf/d) and feeds new electricity plants
• Build two new pipelines (245 & 55 km) originating at Poza Rica gas plant
TOTAL 2,376 – 2,476
* Investment amounts are estimated for 2009-2012, and subject to budgetary approval. Exchange rate: 11.7 pesos/dólar
GAS & BASIC PETROCHEMICALS: MAIN INVESTMENT PROJECTS 2009-2012 (2/2)
Additionally, these projects are being promoted through third-party service contracts:
Investment(mmusd)
Bookmarks: MEI
29/30
224Class IV: +35/-20%
41
• Increase production capacity at Morelos processing center andenhance competitiveness by using latest technology
• Increase capacity from 225 to 360 thousand tonnes / year; modernize existing plant
EthyleneOxyde
(Morelos)
PROJECT GOAL / REACH 2009 2009-2012
Aromatics(Cangrejera)
• Increase paraxylene production capacity from 240 to 488 thousand tonnes / year, using less inputs and obtainingproducts with more value-added
• Build three new plants and modernize existing plants
63 504 Class III: +25/-15%
TOTAL 104 728
PETROCHEMICALS: MAIN INVESTMENT PROJECTS 2009-2012
Investment is focused on modernizing existing plants and increasing capacity in profitable product segments
Investment(mmusd)
* Investment amounts are estimated for 2009-2012, and subject to budgetary approval. Exchange rate: 11.7 pesos/dólar
Bookmarks: MEI
30/30
Implemented actions
To face the international financial crisis and its effects on the Mexican economy, President Felipe Calderón announced two programs that constitute anticyclical actions to boost the Mexican economy.
With those programs as reference, Pemex has adopted several actions in order to accelerate and anticipate the company’s programmed expenditure for 2009 (procurement and construction). Some of these actions are:
Launch most of the public biddings during the first quarter of 2009
Accelerate the public bidding processes
Accelerate the formalization of all contracts
Accelerate the maintenance calendar
Accelerate payments to Pemex suppliers
Increase credit terms to Pemex’s clients
Bookmarks: MEI
31/30Bookmarks: MEI