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Mexican Petroleum | United Mexican States | |
(Translation of registrant’s name into English) | (Jurisdiction of incorporation or organization) |
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• | drilling and other exploration activities; | |
• | import and export activities; | |
• | projected and targeted capital expenditures and other costs, commitments and revenues; and | |
• | liquidity. |
• | 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; |
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• | developments affecting the energy sector; and | |
• | changes in our regulatory environment. |
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Item 1. | Identity of Directors, Senior Management and Advisers |
Item 2. | Offer Statistics and Expected Timetable |
Item 3. | Key Information |
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Year Ended December 31,(1)(2) | ||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | 2006(4) | |||||||||||||||||||
(in millions of constant pesos as of | (in millions | |||||||||||||||||||||||
December 31, 2006)(3) | of U.S. | |||||||||||||||||||||||
dollars) | ||||||||||||||||||||||||
Income Statement Data | ||||||||||||||||||||||||
Amounts in accordance with Mexican FRS: | ||||||||||||||||||||||||
Net sales(5) | Ps. | 582,306 | Ps. | 707,374 | Ps. | 831,769 | Ps. | 966,284 | Ps. | 1,062,495 | $ | 97,647 | ||||||||||||
Total revenues(5) | 582,205 | 710,724 | 843,763 | 978,601 | 1,132,236 | 104,056 | ||||||||||||||||||
Total revenues net of the IEPS tax | 443,726 | 604,321 | 784,943 | 957,567 | 1,132,236 | 104,056 | ||||||||||||||||||
Operating income | 334,466 | 415,726 | 489,437 | 518,970 | 581,348 | 53,428 | ||||||||||||||||||
Comprehensive financing cost | 7,057 | 34,770 | 7,578 | 4,661 | 22,983 | 2,112 | ||||||||||||||||||
Net income (loss) for the period | (27,795 | ) | (45,970 | ) | (27,413 | ) | (79,374 | ) | 45,252 | 4,159 | ||||||||||||||
Balance Sheet Data (end of period) | ||||||||||||||||||||||||
Amounts in accordance with Mexican FRS: | ||||||||||||||||||||||||
Cash and cash equivalents | 51,598 | 82,945 | 91,256 | 125,724 | 188,684 | 17,341 | ||||||||||||||||||
Total assets | 868,309 | 956,248 | 1,018,792 | 1,084,818 | 1,204,734 | 110,719 | ||||||||||||||||||
Long-term debt | 224,672 | 343,394 | 436,358 | 521,924 | 505,474 | 46,455 | ||||||||||||||||||
Total long-term liabilities | 616,968 | 749,523 | 831,893 | 941,634 | 994,854 | 91,430 | ||||||||||||||||||
Equity (deficit) | 117,521 | 51,870 | 35,851 | (27,959 | ) | 39,954 | 3,672 | |||||||||||||||||
Amounts in accordance with U.S. GAAP: | ||||||||||||||||||||||||
Total revenues net of IEPS tax | 443,726 | 604,321 | 780,302 | 957,564 | 1,129,349 | 103,791 | ||||||||||||||||||
Operating income net of IEPS tax | 189,472 | 279,203 | 435,156 | 516,025 | 655,141 | 60,210 | ||||||||||||||||||
Comprehensive financing (cost) income | (9,557 | ) | (30,325 | ) | 2,239 | (11,341 | ) | (17,494 | ) | (1,608 | ) | |||||||||||||
Net income (loss) for the period | (36,946 | ) | (74,997 | ) | (13,990 | ) | (76,900 | ) | 54,667 | 5,024 | ||||||||||||||
Total assets | 860,435 | 922,318 | 981,673 | 1,040,628 | 1,179,919 | 108,438 | ||||||||||||||||||
Equity (deficit) | 19,376 | (50,240 | ) | (52,530 | ) | (116,561 | ) | (22,054 | ) | (2,027 | ) | |||||||||||||
Other Financial Data | ||||||||||||||||||||||||
Amounts in accordance with Mexican FRS: | ||||||||||||||||||||||||
Depreciation and Amortization | 38,245 | 45,856 | 45,051 | 54,931 | 63,293 | 5,817 | ||||||||||||||||||
Investments in fixed assets at cost(6) | 107,413 | 76,756 | 80,708 | 86,600 | 100,856 | 9,269 |
(1) | Includes Petróleos Mexicanos, the subsidiary entities and the subsidiary companies (including the Pemex Project Funding Master Trust and, for U.S. GAAP purposes, Pemex Finance, Ltd.). For Mexican FRS purposes, beginning with the year ended December 31, 2005, we include the financial position and results of Pemex Finance, Ltd. For Mexican FRS and U.S. GAAP purposes, beginning with the year ended December 31, 2003, we include the financial position and results of Fideicomiso F/163 and RepCon Lux, S.A. | |
(2) | Mexican FRS differs from U.S. GAAP. For the most significant differences between U.S. GAAP and Mexican FRS affecting our consolidated financial statements, see Note 20 to our consolidated financial statements included herein and “Item 5—Operating and Financial Review and Prospects—U.S. GAAP Reconciliation.” | |
(3) | Our consolidated financial statements for each of the five years ended December 31, 2006 were prepared in accordance with Mexican FRS, including the recognition of the effects of inflation in accordance withBulletin B-10. | |
(4) | Translations into U.S. dollars of amounts in pesos have been made at the established exchange rate for accounting purposes of Ps. 10.8810 = U.S. $1.00 at December 31, 2006. Such translations should not be construed as a representation that the peso amounts have been or could be converted into U.S. dollar amounts at the foregoing or any other rate. |
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(5) | Includes the Special Tax on Production and Services, which we refer to as the “IEPS tax” as part of the sales price of the products sold, except in 2006, when the IEPS tax rate was negative. | |
(6) | Includes investments in fixed assets and capitalized interest. For 2003, it excludes certain expenditures charged to the oil field exploration and depletion reserve. See Note 2e. to our financial statements included herein and “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources.” |
Period | Exchange Rate | |||||||||||||||
Year Ended December 31, | High | Low | Average(1) | Period End | ||||||||||||
2002 | 10.425 | 9.001 | 9.746 | 10.425 | ||||||||||||
2003 | 11.406 | 10.113 | 10.846 | 11.242 | ||||||||||||
2004 | 11.635 | 10.805 | 11.309 | 11.154 | ||||||||||||
2005 | 11.411 | 10.414 | 10.894 | 10.628 | ||||||||||||
2006 | 11.460 | 10.431 | 10.949 | 10.799 | ||||||||||||
2007 | ||||||||||||||||
January | 11.092 | 10.765 | 10.957 | 11.038 | ||||||||||||
February | 11.157 | 10.917 | 10.995 | 11.157 | ||||||||||||
March | 11.185 | 11.013 | 11.114 | 11.043 | ||||||||||||
April | 11.031 | 10.924 | 10.980 | 10.930 | ||||||||||||
May | 10.931 | 10.738 | 10.822 | 10.738 | ||||||||||||
June(2) | 10.979 | 10.712 | 10.833 | 10.790 |
(1) | Average of month-end rates, except for 2007 monthly exchange rates. | |
(2) | For the period from June 1, 2007 to June 29, 2007. |
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Item 4. | Information on the Company |
• | theLey Reglamentaria del Artículo 27 Constitucional en el Ramo del Petróleo(the Regulatory Law to Article 27 of the Political Constitution of the United Mexican States Concerning Petroleum Affairs, which we refer to as the Regulatory Law); and | |
• | theLey Orgánica de Petróleos Mexicanos y Organismos Subsidiarios(the Organic Law of Petróleos Mexicanos and Subsidiary Entities, which we refer to as the Organic Law). |
• | explore, exploit, refine, transport, store, distribute and sell (first-hand) crude oil; | |
• | explore, exploit, produce and sell (first-hand) natural gas and transport and store natural gas, to the extent the transportation and storage activities are inextricably linked with such exploitation and production; and | |
• | produce, store, transport, distribute and sell (first-hand) the derivatives of petroleum (including petroleum products) and natural gas used as basic industrial raw materials that constitute basic petrochemicals, which include ethane, propane, butanes, pentanes, hexanes, heptanes, naphthas, carbon black feedstocks and methane, but, in the case of methane, only if obtained from hydrocarbons used as basic raw materials by the petrochemical industry and obtained from deposits located in Mexico. |
• | Pemex-Exploration and Production explores for and exploits crude oil and natural gas and transports, stores and markets these hydrocarbons; | |
• | Pemex-Refining refines petroleum products and derivatives that may be used as basic industrial raw materials and stores, transports, distributes and markets these products and derivatives; | |
• | Pemex-Gas and Basic Petrochemicals processes natural gas, natural gas liquids and derivatives that may be used as basic industrial raw materials and stores, transports, |
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distributes and markets these products and produces, stores, transports, distributes and markets basic petrochemicals; and |
• | Pemex-Petrochemicals engages in industrial petrochemical processes and stores, distributes and markets petrochemicals other than basic petrochemicals. |
• | First, PEMEX identifies a project as a PIDIREGAS and the Mexican Government authorizes expenditures related to its development. |
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• | Then, private sector companies, in cooperation with us, build and deliver the project to the specific subsidiary entity in charge of each project. | |
• | Finally, we, with the Mexican Government’s authorization, pay all amounts owing to contractors and make final payments to receive delivery of the completed project and then record as a liability the full principal amount of all indebtedness incurred to finance the project. |
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Year ended December 31,(1)(2) | |||||||||||||||||||||||||
Budget | |||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | 2007(3) | ||||||||||||||||||||
(millions of nominal pesos) | (millions of | ||||||||||||||||||||||||
constant 2007 | |||||||||||||||||||||||||
pesos) | |||||||||||||||||||||||||
Pemex-Exploration and Production | |||||||||||||||||||||||||
Ku-Maloob-Zaap | Ps. | 865 | Ps. | 3,072 | Ps. | 10,222 | Ps. | 16,424 | Ps. | 26,724 | Ps. | 30,097 | |||||||||||||
Cantarell | 24,397 | 23,011 | 27,240 | 25,030 | 25,992 | 26,644 | |||||||||||||||||||
Strategic Gas Program(4) | 8,967 | 18,079 | 23,413 | 20,635 | 23,420 | 20,664 | |||||||||||||||||||
Burgos | 9,383 | 10,995 | 16,344 | 12,439 | 15,726 | 19,193 | |||||||||||||||||||
Antonio J. Bermúdez | 471 | 3,622 | 6,270 | 7,045 | 6,908 | 7,249 | |||||||||||||||||||
Chuc(5) | 302 | 1,753 | 4,152 | 2,266 | 3,150 | 3,832 | |||||||||||||||||||
Jujo-Tecominoacán | 279 | 1,668 | 1,699 | 2,340 | 2,943 | 2,628 | |||||||||||||||||||
Caan(6) | 374 | 834 | 1,393 | 1,808 | 2,241 | 3,183 | |||||||||||||||||||
Arenque | 183 | 1,089 | 2,274 | 2,344 | 2,231 | 1,833 | |||||||||||||||||||
Agua Fría-Coapechaca-Tajín(7) | 93 | 1,860 | 2,402 | 1,628 | 2,207 | — | |||||||||||||||||||
Bellota-Chinchorro | 244 | 1,399 | 2,001 | 1,550 | 1,985 | 2,648 | |||||||||||||||||||
Delta del Grijalva | 1,439 | 641 | 728 | 1,100 | 1,663 | 2,153 | |||||||||||||||||||
El Golpe-Puerto Ceiba | 396 | 1,915 | 1,695 | 2,124 | 1,634 | 3,114 | |||||||||||||||||||
Integral Poza Rica | 22 | 424 | 938 | 1,192 | 1,321 | 873 | |||||||||||||||||||
Cactus-Sitio Grande | 114 | 1,276 | 918 | 493 | 1,221 | 1,412 | |||||||||||||||||||
Ek-Balam | 99 | 748 | 668 | 639 | 603 | 276 | |||||||||||||||||||
Taratunich(6) | 92 | 938 | 787 | 489 | 441 | — | |||||||||||||||||||
Carmito-Artesa | 187 | 606 | 614 | 320 | 325 | 440 | |||||||||||||||||||
Integral Yaxche | — | 18 | 158 | 383 | 271 | 858 | |||||||||||||||||||
Och-Uech-Kax | 261 | 750 | 718 | 347 | 268 | 385 | |||||||||||||||||||
Cárdenas | 44 | 241 | 215 | 143 | 245 | 586 | |||||||||||||||||||
Pol(5) | 720 | 1,466 | 481 | 217 | 186 | — | |||||||||||||||||||
Amatitlán-Profeta-Tzapotempa-Vinazco(7) | 8 | 465 | 650 | 291 | 106 | — | |||||||||||||||||||
Ayín-Alux | 17 | 37 | 108 | 30 | 37 | 349 | |||||||||||||||||||
Integral Batab(5) | 57 | 388 | 593 | 17 | 27 | — | |||||||||||||||||||
Integral Abkatún(6) | 529 | 1,856 | 2,769 | 409 | 26 | — | |||||||||||||||||||
Integral Kanaab(6) | 13 | 284 | 186 | 121 | 26 | — | |||||||||||||||||||
Aceite Terciario del Golfo(7) | — | — | — | — | — | 8,828 | |||||||||||||||||||
Total | 49,557 | 79,435 | 109,638 | 101,823 | 121,929 | 137,245 | |||||||||||||||||||
Pemex-Refining | |||||||||||||||||||||||||
Cadereyta(8) | 115 | — | — | — | — | — | |||||||||||||||||||
Madero(9) | 6,608 | 11,323 | — | — | — | — | |||||||||||||||||||
Salamanca(10) | — | 2,679 | — | — | — | — | |||||||||||||||||||
Tula(11) | 1,461 | 133 | — | — | — | — | |||||||||||||||||||
Minatitlán | — | — | 445 | 2,459 | 7,861 | 11,865 | |||||||||||||||||||
Fuel Quality Investments | — | — | — | — | — | 1,392 | |||||||||||||||||||
Residual Conversion from Tula Refinery | — | — | — | — | — | 907 | |||||||||||||||||||
Residual Conversion from Salamanca Refinery | — | — | — | — | — | 1,149 | |||||||||||||||||||
Total | 8,184 | 14,134 | 445 | 2,459 | 7,861 | 15,314 | |||||||||||||||||||
Pemex-Gas and Basic Petrochemicals | |||||||||||||||||||||||||
Modular Cryogenic Plants in Reynosa | 75 | 1,105 | 537 | 1,270 | 477 | 1,297 | |||||||||||||||||||
Total | 75 | 1,105 | 537 | 1,270 | 477 | 1,297 | |||||||||||||||||||
Pemex-Petrochemicals | |||||||||||||||||||||||||
Modernization and Enlargement of the Aromatics Train 1 at Cangrejera petrochemical complex | — | — | — | — | — | 626 | |||||||||||||||||||
Styrene plant at Cangrejera petrochemical complex | — | — | — | — | — | 267 | |||||||||||||||||||
Ethylene plant at Cangrejera petrochemical complex | — | — | — | — | — | 123 | |||||||||||||||||||
Total | — | — | — | — | — | 1,016 | |||||||||||||||||||
Total PIDIREGAS Expenditures | 57,815 | 94,674 | 110,620 | 105,552 | 130,267 | 154,872 | |||||||||||||||||||
Maintenance by Pemex-Exploration and Production included in PIDIREGAS Expenditures(12) | 13,671 | 21,749 | 19,802 | 18,942 | 24,209 | 22,616 | |||||||||||||||||||
Total PIDIREGAS Capital Expenditures | Ps. | 44,144 | Ps. | 72,925 | Ps. | 90,818 | Ps. | 86,610 | Ps. | 106,058 | Ps. | 132,256 | |||||||||||||
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(1) | Amounts based on cash basis method of accounting and on the approved dollar amount of capital expenditure translated into pesos at the exchange rate of Ps. 11.20. | |
(2) | Includes capitalized interest during construction period. | |
(3) | Approved budget. | |
(4) | The Strategic Gas Program includes 23 different natural gas projects expected to increase domestic supply of natural gas, thereby minimizing imports. | |
(5) | The Pol and the Integral Batab projects were merged into the Chuc project as of January 2007. | |
(6) | The Integral Abkatún, the Integral Kanaab and the Taratunich projects were merged into the Caan project as of January 2007. | |
(7) | The Agua Fría-Coapechaca-Tajín and the Amatitlán-Profeta-Tzapotempa-Vinazco projects were merged into the new Aceite Terciario del Golfo Project as of January 2007. | |
(8) | In November 2003, the Cadereyta project was certified as 99.31% complete and formally concluded. | |
(9) | The Madero project was completed on October 24, 2002, and the final payment was made to the contractor on March 3, 2003. | |
(10) | The Salamanca project was completed on January 9, 2003. | |
(11) | The Tula project was completed and contractors were paid on August 27, 2002, although amounts were budgeted for and paid in 2003 to cover potential adjustments or additional works required in connection with this project. | |
(12) | Maintenance expenditures are not capitalized in accordance with Mexican FRS. |
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Year ended December 31,(1)(2) | ||||||||||||||||
2007 | 2008 | 2009 | 2010 | |||||||||||||
(millions of constant 2007 pesos) | ||||||||||||||||
Pemex-Exploration and Production | ||||||||||||||||
Ku-Maloob-Zaap | Ps. | 30,097 | Ps. | 16,471 | Ps. | 13,543 | Ps. | 9,629 | ||||||||
Cantarell | 26,644 | 16,775 | 14,661 | 17,338 | ||||||||||||
Strategic Gas Program | 20,664 | 19,694 | 23,517 | 14,094 | ||||||||||||
Burgos | 19,193 | 25,431 | 26,470 | 28,724 | ||||||||||||
Antonio J. Bermúdez | 7,249 | 5,577 | 5,090 | 2,896 | ||||||||||||
Chuc(3) | 3,832 | 3,532 | 1,801 | 42 | ||||||||||||
Jujo-Tecominoacán | 2,628 | 243 | 994 | 882 | ||||||||||||
Caan(4) | 3,183 | 1,532 | 1,153 | 317 | ||||||||||||
Arenque | 1,833 | 2,336 | 6,262 | 1,382 | ||||||||||||
Bellota-Chinchorro | 2,648 | 2,347 | 617 | 464 | ||||||||||||
Delta del Grijalva | 2,153 | 2,595 | 47 | — | ||||||||||||
El Golpe-Puerto Ceiba | 3,114 | 2,783 | 2,264 | 63 | ||||||||||||
Integral Poza Rica | 873 | 739 | 1,084 | 966 | ||||||||||||
Cactus-Sitio Grande | 1,412 | 980 | 1,205 | 330 | ||||||||||||
Ek-Balam | 276 | 899 | 566 | 579 | ||||||||||||
Carmito-Artesa | 440 | 306 | 435 | 333 | ||||||||||||
Integral Yaxche | 858 | 504 | 440 | 593 | ||||||||||||
Och-Uech-Kax | 385 | 801 | 585 | 8 | ||||||||||||
Cárdenas | 586 | 501 | 104 | 36 | ||||||||||||
Ayín-Alux | 349 | 1,018 | 1,785 | 974 | ||||||||||||
Aceite Terciario del Golfo(5) | 8,828 | 11,733 | 18,549 | 749 | ||||||||||||
Total | 137,245 | 116,794 | 121,173 | 80,400 | ||||||||||||
Pemex-Refining | ||||||||||||||||
Minatitlán | 11,865 | 4,553 | — | — | ||||||||||||
Salina Cruz | — | — | 1,755 | 6,877 | ||||||||||||
Fuel Quality Investments | 1,392 | 6,340 | 19,389 | 0 | ||||||||||||
Residual Conversion from Tula Refinery | 907 | 5,023 | 5,885 | 5,625 | ||||||||||||
Residual Conversion from Salamanca Refinery | 1,149 | 4,013 | 4,267 | 4,476 | ||||||||||||
Total | 15,314 | 19,929 | 31,296 | 16,978 | ||||||||||||
Pemex-Gas and Basic Petrochemicals | ||||||||||||||||
Modular Cryogenic Plants in Reynosa | 1,297 | 1,619 | 164 | — | ||||||||||||
Total | 1,297 | 1,619 | 164 | — | ||||||||||||
Pemex-Petrochemicals | ||||||||||||||||
Modernization and Enlargement of the Aromatics Train 1 at Cangrejera petrochemical complex | 626 | 2,266 | 171 | — | ||||||||||||
Styrene plant at Cangrejera petrochemical complex | 267 | 600 | 246 | — | ||||||||||||
Ethylene plant at Cangrejera petrochemical complex | 123 | 360 | 754 | 671 | ||||||||||||
Total | 1,016 | 3,226 | 1,171 | 671 | ||||||||||||
Total PIDIREGAS Expenditures Budget | 154,872 | 141,568 | 153,804 | 98,049 | ||||||||||||
Maintenance by Pemex-Exploration and Production included in PIDIREGAS Expenditures Budget(6) | 22,616 | 21,637 | 21,325 | 19,713 | ||||||||||||
Total PIDIREGAS Capital Expenditures Budget | Ps. | 132,256 | Ps. | 119,931 | Ps. | 132,479 | Ps. | 78,336 | ||||||||
(1) | Amounts based on cash basis method of accounting. | |
(2) | Includes capitalized interest during the construction period. | |
(3) | The Pol and the Integral Batab projects were merged into the Chuc project as of 2007. | |
(4) | The Integral Abkatún, the Integral Kanaab and the Taratunich projects were merged into the Caan project as of 2007. | |
(5) | The Agua Fría-Coapechaca-Tajín and the Amatitlán-Profeta-Tzapotempa-Vinazco were merged into the new Aceite Terciario del Golfo Project as of 2007. | |
(6) | Maintenance expenditures are not capitalized in accordance with Mexican FRS. |
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Year ended December 31, | ||||||||||||||||||||||||||||
Budget | Budget | |||||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | 2007(2)(3) | 2008(4) | ||||||||||||||||||||||
(in millions of nominal pesos) | ||||||||||||||||||||||||||||
Pemex-Exploration and Production | Ps. | 13,443 | Ps. | 8,945 | Ps. | 3,694 | Ps. | 11,040 | Ps. | 8,142 | Ps. | 4,247 | Ps. | 23,171 | ||||||||||||||
Pemex-Refining | 5,893 | 5,744 | 4,647 | 6,542 | 7,369 | 8,097 | 15,140 | |||||||||||||||||||||
Pemex-Gas and Basic Petrochemicals | 1,721 | 2,148 | 1,961 | 1,936 | 2,845 | 3,457 | 5,373 | |||||||||||||||||||||
Pemex-Petrochemicals | 1,454 | 1,627 | 1,598 | 1,530 | 1,426 | 1,747 | 4,591 | |||||||||||||||||||||
Petróleos Mexicanos | 432 | 549 | 343 | 388 | 349 | 447 | 700 | |||||||||||||||||||||
Subtotal Non-PIDIREGAS Expenditures | 22,942 | 19,013 | 12,243 | 21,436 | 20,130 | 17,997 | 48,975 | |||||||||||||||||||||
Maintenance by Pemex-Exploration and Production included in Non-PIDIREGAS Capital Expenditures(5) | 8,146 | 5,640 | 2,737 | 3,474 | 3,511 | 2,262 | 2,164 | |||||||||||||||||||||
Total Non-PIDIREGAS Capital Expenditures | Ps. | 14,796 | Ps. | 13,373 | Ps. | 9,506 | Ps. | 17,962 | Ps. | 16,619 | Ps. | 15,735 | Ps. | 46,811 | ||||||||||||||
(1) | There are no capital expenditures at the subsidiary company level. | |
(2) | Amended capital budget for 2007, which includes resources provided by Article 25 of the Federal Budget Law. | |
(3) | The 2007 non-PIDIREGAS budget is subject to revision if our revenues increase. | |
(4) | Subject to approval by the Mexican Congress during the 2008 budgetary process. | |
(5) | Maintenance expenditures are not capitalized in accordance with Mexican FRS. |
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• | experience in the area; | |
• | stage of development; | |
• | quality and completeness of basic data; and | |
• | production and pressure histories. |
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(including natural gas liquids)(1)
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||
(in millions of barrels) | ||||||||||||||||||||
Proved developed and undeveloped reserves | ||||||||||||||||||||
At January 1 | 18,767 | 17,196 | 16,041 | 14,803 | 13,671 | |||||||||||||||
Revisions(2) | (247 | ) | 120 | (109 | ) | 197 | 433 | |||||||||||||
Extensions and discoveries(2) | (36 | ) | 84 | 245 | 25 | 79 | ||||||||||||||
Production | (1,288 | ) | (1,359 | ) | (1,374 | ) | (1,354 | ) | (1,332 | ) | ||||||||||
At December 31 | 17,196 | 16,041 | 14,803 | 13,671 | 12,849 | |||||||||||||||
Proved developed reserves at December 31 | 11,725 | 10,473 | 9,745 | 9,617 | 8,978 |
(1) | Crude oil and condensate reserves include the fraction of liquefiable hydrocarbons recoverable in natural gas processing plants. | |
(2) | Revisions and extensions include positive and negative changes due to new data gathered through drilling of extension wells. |
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||
(in billions of cubic feet) | ||||||||||||||||||||
Proved developed and undeveloped reserves | ||||||||||||||||||||
At January 1 | 16,256 | 14,985 | 14,850 | 14,807 | 14,557 | |||||||||||||||
Revisions(1) | (443 | ) | 695 | 547 | 661 | 280 | ||||||||||||||
Extensions and discoveries(1) | 313 | 354 | 641 | 394 | 505 | |||||||||||||||
Production(2) | (1,141 | ) | (1,184 | ) | (1,231 | ) | (1,305 | ) | (1,487 | ) | ||||||||||
At December 31 | 14,985 | 14,850 | 14,807 | 14,557 | 13,856 | |||||||||||||||
Proved developed reserves at December 31 | 8,572 | 8,094 | 8,325 | 8,888 | 8,688 |
(1) | Revisions and extensions include positive and negative changes due to new data gathered through drilling of extension wells. | |
(2) | Production refers to dry gas, although natural gas production reported in other tables refers to sour wet gas. There is a shrinkage in volume when natural gas liquids and impurities are extracted to obtain dry gas. Therefore, reported natural gas volumes are greater than dry gas volumes. |
24
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Proved | Developed | Undeveloped | Producing | Undeveloped | ||||||||||||||||
Field | Reserves | Reserves | Reserves | Wells | Locations(2) | |||||||||||||||
(in millions of barrels of crude oil equivalent)(1) | ||||||||||||||||||||
Akal | 4,600.1 | 4,006.4 | 593.7 | 183 | 13 | |||||||||||||||
Ku-Maloob-Zaap | 2,487.1 | 1,410.7 | 1,076.4 | 74 | 98 | |||||||||||||||
Jujo-Tecominoacán | 964.7 | 554.8 | 410.0 | 58 | 16 | |||||||||||||||
Samaria | 850.4 | 590.4 | 260.1 | 45 | 10 | |||||||||||||||
Chicontepec | 653.6 | 117.6 | 536.1 | 577 | 1,719 | |||||||||||||||
Iride | 610.7 | 451.6 | 159.1 | 39 | 8 | |||||||||||||||
Sihil | 286.0 | 73.0 | 213.0 | 4 | 8 | |||||||||||||||
Ixtal | 211.5 | 128.8 | 82.8 | 4 | 4 | |||||||||||||||
Cunduacán | 201.0 | 119.9 | 81.1 | 18 | 3 | |||||||||||||||
Oxiacaque | 160.5 | 46.6 | 113.9 | 8 | 8 | |||||||||||||||
Sinán | 156.8 | 126.2 | 30.6 | 14 | 5 | |||||||||||||||
Caan | 140.0 | 140.0 | 0.0 | 24 | 0 | |||||||||||||||
Bolontikú | 133.0 | 60.6 | 72.3 | 5 | 5 | |||||||||||||||
May | 131.1 | 64.5 | 66.6 | 6 | 7 | |||||||||||||||
Chuc | 129.4 | 126.2 | 3.2 | 16 | 3 | |||||||||||||||
Cactus | 101.0 | 44.6 | 56.3 | 21 | 7 | |||||||||||||||
Chiapas-Copanó | 95.2 | 95.2 | 0.0 | 14 | 0 | |||||||||||||||
Muspac | 94.9 | 94.9 | 0.0 | 15 | 0 | |||||||||||||||
Balam | 90.4 | 90.4 | 0.0 | 4 | 0 | |||||||||||||||
Poza Rica | 89.7 | 73.2 | 16.6 | 192 | 12 | |||||||||||||||
Puerto Ceiba | 89.0 | 66.9 | 22.1 | 16 | 3 | |||||||||||||||
Cárdenas | 84.9 | 70.7 | 14.2 | 14 | 3 | |||||||||||||||
Sen | 66.2 | 47.0 | 19.2 | 13 | 4 | |||||||||||||||
Ogarrio | 55.3 | 36.6 | 18.7 | 48 | 22 | |||||||||||||||
Paredón | 52.6 | 52.6 | 0.0 | 7 | 0 | |||||||||||||||
Lum | 52.6 | 27.3 | 25.2 | 1 | 3 | |||||||||||||||
Caparroso-Pijije-Escuintle | 51.7 | 42.8 | 8.9 | 14 | 2 | |||||||||||||||
Abkatún | 50.7 | 50.7 | 0.0 | 14 | 0 | |||||||||||||||
Platanal | 48.7 | 11.9 | 36.9 | 2 | 3 | |||||||||||||||
Papán | 46.5 | 46.5 | 0.0 | 0 | 0 | |||||||||||||||
Ayín | 45.6 | 0.0 | 45.6 | 0 | 3 | |||||||||||||||
Ek | 39.7 | 39.7 | 0.0 | 2 | 0 | |||||||||||||||
Alux | 36.9 | 0.0 | 36.9 | 0 | 2 | |||||||||||||||
Cuitláhuac | 35.2 | 27.9 | 7.3 | 223 | 29 | |||||||||||||||
Bacab | 30.9 | 30.9 | 0.0 | 4 | 0 | |||||||||||||||
Culebra | 29.2 | 23.1 | 6.2 | 444 | 38 | |||||||||||||||
Tizón | 25.4 | 11.4 | 14.0 | 3 | 3 | |||||||||||||||
Arcabuz | 18.8 | 14.7 | 4.2 | 183 | 21 | |||||||||||||||
Kutz | 15.3 | 15.3 | 0.0 | 3 | 0 | |||||||||||||||
Ixtoc | 14.4 | 14.4 | 0.0 | 3 | 0 | |||||||||||||||
Arcos | 13.6 | 13.6 | 0.0 | 156 | 0 | |||||||||||||||
Nohoch | 12.6 | 12.6 | 0.0 | 5 | 0 | |||||||||||||||
Pol | 9.9 | 9.9 | 0.0 | 12 | 0 | |||||||||||||||
Misón | 6.9 | 0.0 | 6.9 | 0 | 3 | |||||||||||||||
Chac | 6.2 | 6.2 | 0.0 | 2 | 0 | |||||||||||||||
Luna-Palapa | 3.3 | 3.3 | 0.0 | 6 | 0 | |||||||||||||||
Citam | 2.3 | 1.2 | 1.2 | 1 | 1 | |||||||||||||||
Escarbado | 1.5 | 1.5 | 0.0 | 1 | 0 | |||||||||||||||
Total | 13,133.3 | 9,094.2 | 4,039.1 | 2,498 | 2,066 | |||||||||||||||
Mexico’s proved reserves | 15,514.2 | 10,648.1 | 4,866.1 | |||||||||||||||||
Percentage | 85% | 85% | 83% |
(1) | To convert dry gas to barrel of oil equivalent, a factor is used of 5.201 thousand cubic feet of dry gas per barrel of oil equivalent. | |
(2) | Undeveloped locations refers to the number of geographic sites or locations where a well will be drilled to produce undeveloped proved reserves. |
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Year Ended December 31, | ||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||
Wells drilled | 447 | 653 | 733 | 759 | 672 | |||||||||||||||
Exploratory wells drilled | 58 | 96 | 105 | 73 | 58 | |||||||||||||||
Development wells drilled | 389 | 557 | 628 | 686 | 614 | |||||||||||||||
Wells completed | 459 | 593 | 727 | 742 | 656 | |||||||||||||||
Exploratory wells | 55 | 88 | 103 | 74 | 69 | |||||||||||||||
Exploratory productive wells | 27 | 53 | 42 | 39 | 32 | |||||||||||||||
Success rate% | 49 | 60 | 41 | 53 | 46 | |||||||||||||||
Development wells | 404 | 505 | 624 | 668 | 587 | |||||||||||||||
Development productive wells | 355 | 455 | 581 | 612 | 541 | |||||||||||||||
Success rate% | 88 | 90 | 93 | 92 | 92 | |||||||||||||||
Producing wells (annual averages)(2) | 4,590 | 4,941 | 5,286 | 5,682 | 6,080 | |||||||||||||||
Marine region | 346 | 369 | 380 | 388 | 411 | |||||||||||||||
Southern region | 1,000 | 979 | 935 | 959 | 958 | |||||||||||||||
Northern region | 3,245 | 3,593 | 3,972 | 4,335 | 4,711 | |||||||||||||||
Producing wells (at year end) | 2,067 | 2,307 | 5,217 | 5,671 | 5,998 | |||||||||||||||
Producing fields | 309 | 340 | 355 | 357 | 364 | |||||||||||||||
Marine region | 20 | 23 | 25 | 29 | 30 | |||||||||||||||
Southern region | 93 | 102 | 97 | 84 | 88 | |||||||||||||||
Northern region | 196 | 215 | 233 | 244 | 246 | |||||||||||||||
Drilling Rigs | 70 | 101 | 132 | 116 | 103 | |||||||||||||||
Kilometers drilled | 1,186 | 1,763 | 2,106 | 2,004 | 1,858 | |||||||||||||||
Average depth by well (meters) | 2,478 | 2,904 | 2,692 | 2,828 | 2,771 | |||||||||||||||
Discovered fields(1) | 16 | 33 | 24 | 16 | 13 | |||||||||||||||
Crude oil | 2 | 11 | 8 | 3 | 2 | |||||||||||||||
Natural gas | 14 | 22 | 16 | 13 | 11 | |||||||||||||||
Crude oil and natural gas output by well (barrels per day) | 900 | 880 | 833 | 774 | 729 |
(1) | Includes only fields with proved reserves. | |
(2) | In May 2007, the monthly average of total producing wells was 6,361. |
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Average Lifting Costs | ||||||||
Year Ended December 31, | ||||||||
2004 | 2005 | 2006 | ||||||
(U.S. dollars per barrel) | ||||||||
$3.78 | $ | 4.24 | $ | 4.13 |
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28
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29
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30
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Year ended December 31,(1) | ||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||
(millions of nominal pesos) | ||||||||||||||||||||
Exploration | Ps. | 8,552 | Ps. | 16,411 | Ps. | 21,664 | Ps. | 14,653 | Ps. | 12,960 | ||||||||||
Development | 32,630 | 44,580 | 69,129 | 75,794 | 89,391 | |||||||||||||||
Total | Ps. | 41,182 | Ps. | 60,991 | Ps. | 90,793 | Ps. | 90,447 | Ps. | 102,351 | ||||||||||
(1) | Amounts based on cash basis method of accounting. |
Year ended December 31,(1) | ||||||||||||||||
2007(2) | 2008 | 2009 | 2010 | |||||||||||||
(millions of nominal pesos) | ||||||||||||||||
Exploration(3) | Ps. | 16,328 | Ps. | 16,367 | Ps. | 16,131 | Ps. | 14,912 | ||||||||
Development(3) | 100,286 | 99,796 | 98,357 | 90,922 | ||||||||||||
Total | Ps. | 116,614 | Ps. | 116,163 | Ps. | 114,488 | Ps. | 105,834 | ||||||||
(1) | Amounts based on cash basis method of accounting. | |
(2) | Approved budget. | |
(3) | Estimated budgets for 2008 through 2010 are based on amounts authorized by the Ministry of Finance and Public Credit for projects in 2007. |
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Table of Contents
Contract amount | ||||||||
(in millions of | ||||||||
Block | Signature date | Contractor | U.S. dollars) | |||||
Reynosa-Monterrey | November 14, 2003 | Repsol Exploración México, S.A. de C.V. | $ | 2,437 | ||||
Cuervito | November 21, 2003 | PTD Servicios Múltiples, S. de R.L. de C.V., a consortium comprised by Petróleo Brasileiro, S.A. (Petrobras), Teikoku Oil Co., Ltd. and D&S Petroleum | 260 | |||||
Misión | November 28, 2003 | Servicios Múltiples de Burgos, S.A. de C.V., a consortium comprised by Tecpetrol (a subsidiary of Techint Group) and Industrial Perforadora de Campeche, S.A. de C.V. | 1,036 | |||||
Fronterizo | December 8, 2003 | PTD Servicios Múltiples, S. de R.L. de C.V., a consortium comprised by Petróleo Brasileiro, S.A. (Petrobras), Teikoku Oil Co., Ltd. and D&S Petroleum | 265 | |||||
Olmos | February 9, 2004 | Lewis Energy México, S. de R.L. de C.V. | 344 | |||||
Pandura-Anáhuac | December 9, 2004 | Industrial Perforadora de Campeche, S.A. de C.V. and Compañía de Desarrollo y Servicios Petroleros, S.A. de C.V. | 900 | |||||
Pirineo | March 23, 2005 | Monclova Pirineo Gas, S. de R.L. de C.V., a consortium comprised by Constructora Industrial Monclova, Materiales la Gloria, Alianz Petroleum, Steel Serv., Suelopetrol, NCT, Estudios y Proyectos and Petrotesting Colombia | 645 | |||||
Total | $ | 5,887 | ||||||
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Table of Contents
Contract amount | ||||||||
(in millions of | ||||||||
Block | Signature date | Contractor | U.S. dollars) | |||||
Nejo | April 3, 2007 | Iberoamericana de Hidrocarburos, S. A. de C. V. | $ | 911.5 | ||||
Monclova | April 20, 2007 | GPA Energy, S. A. de C. V: | 433.5 | |||||
Total | $ | 1,345.0 | ||||||
• | Altamira, a heavy crude oil; | |
• | Maya, a heavy crude oil; | |
• | Isthmus, a light crude oil; and | |
• | Olmeca, a very light crude oil. |
33
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2006 | ||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2005 | |||||||||||||||||||
(in thousands of barrels per day) | (%) | |||||||||||||||||||||||
Marine region | ||||||||||||||||||||||||
Heavy crude oil | 2,127.1 | 2,380.9 | 2,412.3 | 2,330.8 | 2,173.6 | (6.7 | ) | |||||||||||||||||
Light crude oil | 476.7 | 433.0 | 416.7 | 422.5 | 506.2 | 19.8 | ||||||||||||||||||
Total | 2,603.8 | 2,813.9 | 2,829.0 | 2,753.3 | 2,679.8 | (2.7 | ) | |||||||||||||||||
Southern region | ||||||||||||||||||||||||
Heavy crude oil | 6.2 | 6.4 | 7.1 | 20.8 | 14.2 | (31.7 | ) | |||||||||||||||||
Light crude oil | 492.2 | 476.9 | 465.6 | 475.7 | 477.1 | 0.3 | ||||||||||||||||||
Total | 498.4 | 483.3 | 472.7 | 496.6 | 491.3 | (1.1 | ) | |||||||||||||||||
Northern region | ||||||||||||||||||||||||
Heavy crude oil | 40.3 | 38.0 | 38.6 | 35.4 | 55.9 | 57.9 | ||||||||||||||||||
Light crude oil | 34.6 | 35.6 | 42.6 | 48.1 | 28.6 | (40.5 | ) | |||||||||||||||||
Total | 74.9 | 73.6 | 81.2 | 83.5 | 84.5 | 1.2 | ||||||||||||||||||
Total heavy crude oil | 2,173.7 | 2,425.4 | 2,458.0 | 2,387.0 | 2,243.8 | (6.0 | ) | |||||||||||||||||
Total light crude oil | 1,003.5 | 945.5 | 924.9 | 946.4 | 1,011.8 | 6.9 | ||||||||||||||||||
Total crude oil | 3,177.1 | 3,370.9 | 3,382.9 | 3,333.3 | 3,255.6 | (2.3 | ) | |||||||||||||||||
2006 | ||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2005 | |||||||||||||||||||
(in thousands of barrels per day) | (%) | |||||||||||||||||||||||
Northern region | ||||||||||||||||||||||||
Burgos | — | — | — | — | — | — | ||||||||||||||||||
Poza Rica-Altamira | 73.4 | 72.1 | 79.5 | 81.6 | 83.0 | 1.7 | ||||||||||||||||||
Veracruz | 1.5 | 1.5 | 1.7 | 1.9 | 1.5 | (24.3 | ) | |||||||||||||||||
Total | 74.9 | 73.6 | 81.2 | 83.5 | 84.5 | 1.2 | ||||||||||||||||||
Southern region | ||||||||||||||||||||||||
Cinco Presidentes | 34.3 | 37.3 | 37.7 | 38.8 | 39.3 | 1.3 | ||||||||||||||||||
Bellota-Jujo | 201.8 | 195.4 | 212.3 | 224.0 | 219.1 | (2.2 | ) | |||||||||||||||||
Macuspana | 1.6 | 2.5 | 4.9 | 5.0 | 6.6 | 33.3 | ||||||||||||||||||
Muspac | 48.2 | 42.2 | 36.1 | 33.3 | 33.6 | 0.8 | ||||||||||||||||||
Samaria-Luna | 212.3 | 205.9 | 181.6 | 195.5 | 192.7 | (1.4 | ) | |||||||||||||||||
�� | ||||||||||||||||||||||||
Total | 498.4 | 483.3 | 472.7 | 496.6 | 491.3 | (1.1 | ) | |||||||||||||||||
Marine region | ||||||||||||||||||||||||
Cantarell | 1,902.3 | 2,122.8 | 2,136.4 | 2,035.3 | 1,800.9 | (11.5 | ) | |||||||||||||||||
Ku-Maloob-Zaap(P) | 249.3 | 293.6 | 304.4 | 321.7 | 403.8 | 25.5 | ||||||||||||||||||
Abkatún-Pol-Chuc | 406.8 | 359.0 | 321.8 | 299.8 | 332.2 | 10.8 | ||||||||||||||||||
Litoral de Tabasco | 45.4 | 38.6 | 66.4 | 96.5 | 142.9 | 48.1 | ||||||||||||||||||
Total | 2,603.8 | 2,813.9 | 2,829.0 | 2,753.3 | 2,679.8 | (2.7 | ) | |||||||||||||||||
Total crude oil | 3,177.1 | 3,370.9 | 3,382.9 | 3,333.3 | 3,255.6 | (2.3 | ) | |||||||||||||||||
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Year Ended December 31, | 2006 | |||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2005 | |||||||||||||||||||
(in million cubic feet per day) | (%) | |||||||||||||||||||||||
Northern region | ||||||||||||||||||||||||
Burgos | 1,006.9 | 1,030.7 | 1,094.5 | 1,217.3 | 1,330.3 | 9.3 | ||||||||||||||||||
Veracruz | 153.9 | 205.2 | 313.8 | 499.2 | 723.3 | 44.9 | ||||||||||||||||||
Poza Rica-Altamira | 107.1 | 110.8 | 119.5 | 118.8 | 174.1 | 46.5 | ||||||||||||||||||
1,267.9 | 1,346.7 | 1,527.8 | 1,835.2 | 2,227.6 | 21.4 | |||||||||||||||||||
Southern region | ||||||||||||||||||||||||
Cinco Presidentes | 56.5 | 58.7 | 67.8 | 62.8 | 56.7 | (9.7 | ) | |||||||||||||||||
Bellota-Jujo | 292.2 | 276.6 | 276.6 | 281.9 | 271.4 | (3.7 | ) | |||||||||||||||||
Macuspana | 132.4 | 147.5 | 179.6 | 167.5 | 192.9 | 15.2 | ||||||||||||||||||
Muspac | 725.7 | 686.0 | 558.1 | 449.2 | 368.5 | (18.0 | ) | |||||||||||||||||
Samaria-Luna | 497.0 | 461.2 | 412.9 | 438.9 | 462.6 | 5.4 | ||||||||||||||||||
1,703.8 | 1,630.0 | 1,495.1 | 1,400.3 | 1,352.1 | (3.4 | ) | ||||||||||||||||||
Marine region | ||||||||||||||||||||||||
Cantarell | 704.3 | 786.1 | 789.1 | 760.7 | 717.7 | (5.7 | ) | |||||||||||||||||
Ku-Maloob-Zaap | 126.8 | 154.4 | 158.4 | 167.1 | 202.5 | 21.2 | ||||||||||||||||||
Abkatún-Pol-Chuc | 520.3 | 494.3 | 456.1 | 431.8 | 512.5 | 18.7 | ||||||||||||||||||
Litoral de Tabasco | 100.3 | 87.0 | 146.5 | 222.9 | 343.6 | 54.1 | ||||||||||||||||||
1,451.8 | 1,521.8 | 1,550.0 | 1,582.5 | 1,776.4 | 12.3 | |||||||||||||||||||
Total natural gas | 4,423.5 | 4,498.4 | 4,572.9 | 4,818.0 | 5,356.1 | 11.2 | ||||||||||||||||||
35
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36
Table of Contents
• | Sen. This field covers an area of 41 square kilometers. As of December 31, 2006, there were a total of 34 wells drilled, 13 of which were producing. During 2006, the field produced an average of 21.5 thousand barrels of crude oil and 55.6 million cubic feet of natural gas per day. As of December 31, 2006, cumulative production was 192.1 million barrels of crude oil and 526.5 billion cubic feet of natural gas, and proved hydrocarbon reserves totaled 40.9 million barrels of crude oil and 105.8 billion cubic feet of natural gas. Total proved reserves were 66.2 million barrels of crude oil equivalent as of December 31, 2006, of which 47.0 million were developed. | |
• | Luna-Palapa. This field covers an area of 17 square kilometers. As of December 31, 2006, there were a total of 41 wells drilled, six of which were producing. During 2006, the field produced an average of 3.4 thousand barrels of crude oil and 20.2 million cubic feet of natural gas per day. As of December 31, 2006, cumulative production was 117.2 million barrels of crude oil and 655.9 billion cubic feet of natural gas, and proved hydrocarbon reserves totaled 1.7 million barrels of crude oil and 6.5 billion cubic feet of natural gas. Total proved reserves were 3.3 million barrels of crude oil equivalent as of December 31, 2006, all of which are developed. | |
• | Caparroso-Pijije-Escuintle. This field covers an area of 16.6 square kilometers. As of December 31, 2006, there were a total of 35 wells drilled, 14 of which were producing. During 2006, the field produced an average of 18.6 thousand barrels of crude oil and 55.5 million cubic feet of natural gas per day. As of December 31, 2006, cumulative production was 123.4 million barrels of crude oil and 359.5 billion cubic feet of natural gas, and proved hydrocarbon reserves totaled 30.2 million barrels of crude oil and 89.6 billion cubic feet of natural gas. Total proved reserves were 51.7 million barrels of crude oil equivalent as of December 31, 2006, 42.8 million of which were developed. |
37
Table of Contents
• | Tizón. This field covers an area of 14 square kilometers. As of December 31, 2006, there were a total of six wells drilled, three of which were producing. During 2006, the field produced an average of 5.2 thousand barrels of crude oil and 29.3 million cubic feet of natural gas per day. As of December 31, 2006, cumulative production was 9.9 million barrels of crude oil and 60.9 billion cubic feet of natural gas, and proved hydrocarbon reserves totaled 13.0 million barrels of crude oil and 52.4 billion cubic feet of natural gas. Total proved reserves were 25.4 million barrels of crude oil equivalent as of December 31, 2006, of which 11.4 million were developed. |
• | Arcabuz-Culebra. This field covers an area of 380 square kilometers. As of December 31, 2006, there were a total of 790 wells drilled in this area, 627 of which were producing. During 2006, the field produced an average of 245.3 million cubic feet of natural gas per day. As of December 31, 2006, cumulative production was 1,414.3 billion cubic feet of natural gas, and proved gas reserves totaled 249.2 billion cubic feet of natural gas, of which 195.2 billion were developed. | |
• | Cuitláhuac. This field covers an area of 190 square kilometers. As of December 31, 2006, there were a total of 339 wells drilled in this area, 223 of which were producing. During 2006, the field produced an average of 117.9 million cubic feet of natural gas per day. As of December 31, 2006, cumulative production was 479.6 billion cubic feet of natural gas, and proved hydrocarbon reserves totaled 159.6 billion cubic feet of natural gas, of which 126.4 billion were developed. | |
• | Arcos. This field covers an area of 45 square kilometers. As of December 31, 2006, there were a total of 184 wells drilled in this area, 156 of which were producing. During 2006, the field produced an average of 97.1 million cubic feet of natural gas per day. As of December 31, 2006, cumulative production was 550.5 billion cubic feet of natural gas, and proved gas reserves totaled 74.5 billion cubic feet of natural gas, of which 74.5 billion were developed. |
38
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At December 31, | 2006 | |||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2005 | |||||||||||||||||||
(in thousands of barrels per day) | (%) | |||||||||||||||||||||||
Production | 3,177.1 | 3,370.9 | 3,382.9 | 3,333.3 | 3,255.6 | (2.3 | ) | |||||||||||||||||
Distribution | ||||||||||||||||||||||||
Refineries | 1,171.9 | 1,246.4 | 1,257.9 | 1,274.9 | 1,242.1 | (2.6 | ) | |||||||||||||||||
Products under processing agreements(1) | 130.4 | 112.5 | 97.4 | 81.4 | 80.2 | (1.5 | ) | |||||||||||||||||
Petrochemicals | 144.5 | 150.4 | 133.8 | 131.0 | 122.3 | (6.6 | ) | |||||||||||||||||
Exports | 1,716.2 | 1,848.3 | 1,873.6 | 1,832.6 | 1,789.1 | (2.4 | ) | |||||||||||||||||
Total | 3,163.1 | 3,357.6 | 3,362.7 | 3,319.9 | 3,233.7 | (2.6 | ) | |||||||||||||||||
Stock changes, statistical | ||||||||||||||||||||||||
differences(2) | 14.0 | 13.3 | 20.3 | 13.4 | 21.8 | 62.7 |
39
Table of Contents
• | Atmospheric distillation. This process heats crude oil in a tube furnace at atmospheric pressure to distill refined products. The primary products produced are gasoline, kerosene, jet fuel, diesel, atmospheric gas oil and atmospheric residual crude oil. | |
• | Vacuum distillation. This process heats crude oil or other feedstock in a vacuum distillation column, which is operated at low pressures. The objective of this process is to maximize production of heavy vacuum gas oil, which is produced by boiling crude oil. | |
• | Cracking. This process uses either heat and pressure or a catalytic agent to increase gasoline yields from crude oil. | |
• | Visbreaking. This is a thermal cracking process, which uses a horizontal-tube heater fired to a high temperature. Visbreaking reduces flasher bottom viscosity and produces some heavy gas oil. | |
• | Reforming processes. These processes use heat and catalysts to transform smaller or unstable hydrocarbon molecules into larger, more useful refining or blending products. For example, Pemex-Refining uses reforming processes to convert low-octane gasoline into higher-octane stocks that are suitable for blending into finished gasoline and to convert naphthas into more volatile, higher-octane products. | |
• | Hydrotreatment or resid hydrocracking. This process uses a catalyst and hydrogen at high temperature and pressure to remove sulphur, nitrogen and some aromatic compounds. Hydrotreatment also processes some lighter liquid product off-take. | |
• | Alkylation and isomerization. This polymerization process unites olefins and isoparaffins. Butylenes and isobutanes are combined with sulphuric acid or hydrofluoric acid to rearrange straight-chain hydrocarbon molecules into branched-chain products. Pentanes and hexanes, which are difficult to reform, are isomerized through the use of aluminum chloride and other precious-metal catalysts. Normal butane may be isomerized to provide a portion of the isobutane feed needed for the alkylation process. The process produces a high octane, low sensitivity blending agent for gasoline. | |
• | Coking. This process is a severe method of thermal cracking used to upgrade heavy residuals into lighter products or distillates. Coking produces straight-run gasoline (coker naphtha) and various middle-distillate fractions used as catalytic feedstock, thus generating a concentrated solid material called coke of petroleum. |
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At December 31, | ||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||
(in thousands of barrels per day) | ||||||||||||||||||||
Production Process | ||||||||||||||||||||
Atmospheric distillation | 1,540.0 | 1,540.0 | 1,540.0 | 1,540.0 | 1,540.0 | |||||||||||||||
Vacuum distillation | 768.4 | 768.4 | 768.4 | 768.4 | 754.0 | |||||||||||||||
Cracking | 395.5 | 395.5 | 374.5 | 374.5 | 380.5 | |||||||||||||||
Visbreaking | 141.0 | 141.0 | 141.0 | 141.0 | 91.0 | |||||||||||||||
Reforming | 301.3 | 301.3 | 301.3 | 301.3 | 279.3 | |||||||||||||||
Hydrotreatment | 987.1 | 987.1 | 987.1 | 987.1 | 926.1 | |||||||||||||||
Alkylation and isomerization | 143.9 | 143.9 | 143.9 | 143.9 | 152.5 | |||||||||||||||
Coking | — | 100.0 | 100.0 | 100.0 | 100.0 |
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Year Ended December 31, | 2006 | |||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2005 | |||||||||||||||||||
(in thousands of barrels per day) | (%) | |||||||||||||||||||||||
Refinery crude oil runs | 1,245.4 | 1,285.9 | 1,303.4 | 1,284.4 | 1,284.2 | 0.0 | ||||||||||||||||||
Refined products | ||||||||||||||||||||||||
Liquefied petroleum gas | 31.3 | 33.8 | 28.0 | 30.6 | 25.4 | (17.0 | ) | |||||||||||||||||
Gasoline | ||||||||||||||||||||||||
Nova (leaded)/Base | 16.4 | 10.5 | 3.9 | 4.8 | 7.5 | 56.3 | ||||||||||||||||||
Pemex Magna | 359.4 | 396.5 | 418.5 | 412.0 | 413.7 | 0.4 | ||||||||||||||||||
Pemex Premium | 21.8 | 37.6 | 43.8 | 38.2 | 35.0 | (8.4 | ) | |||||||||||||||||
Others | 0.7 | 0.6 | 0.4 | 0.1 | 0.1 | 0.0 | ||||||||||||||||||
Total | 398.2 | 445.2 | 466.7 | 455.1 | 456.2 | 0.2 | ||||||||||||||||||
Kerosenes | ||||||||||||||||||||||||
Jet fuel | 56.7 | 59.6 | 62.1 | 63.3 | 64.8 | 2.4 | ||||||||||||||||||
Total | 56.7 | 59.6 | 62.1 | 63.3 | 64.8 | 2.4 | ||||||||||||||||||
Diesel | ||||||||||||||||||||||||
Pemex Diesel | 246.7 | 290.8 | 319.6 | 312.3 | 318.3 | 1.9 | ||||||||||||||||||
Low sulphur diesel | 0.7 | 0.6 | — | — | — | — | ||||||||||||||||||
Others | 19.5 | 16.4 | 5.1 | 5.9 | 9.8 | 66.1 | ||||||||||||||||||
Total | 266.9 | 307.8 | 324.7 | 318.2 | 328.1 | 3.1 | ||||||||||||||||||
Fuel oil | 449.6 | 396.5 | 368.0 | 350.8 | 325.2 | (7.3 | ) | |||||||||||||||||
Other refined products | ||||||||||||||||||||||||
Asphalts | 28.8 | 25.6 | 27.2 | 29.3 | 32.3 | 10.2 | ||||||||||||||||||
Lubricants | 4.9 | 5.5 | 5.4 | 5.2 | 5.1 | (1.9 | ) | |||||||||||||||||
Paraffins | 1.0 | 0.9 | 1.0 | 1.1 | 1.0 | (9.1 | ) | |||||||||||||||||
Still gas | 37.4 | 51.3 | 49.9 | 51.9 | 56.7 | 9.2 | ||||||||||||||||||
Other refined products(1) | 1.1 | 16.7 | 28.2 | 32.8 | 34.8 | 6.1 | ||||||||||||||||||
Total | 73.3 | 100.1 | 111.7 | 120.2 | 129.9 | 8.1 | ||||||||||||||||||
Total refined products | 1,275.9 | 1,342.9 | 1,361.2 | 1,338.3 | 1,329.7 | (0.6 | ) | |||||||||||||||||
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Year Ended December 31, | 2006 | |||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2005 | |||||||||||||||||||
(in millions of constant pesos at December 31, 2006)(2) | (%) | |||||||||||||||||||||||
Oil Products | ||||||||||||||||||||||||
Gasoline | ||||||||||||||||||||||||
Pemex Magna | Ps. | 69,338.1 | Ps. | 93,277.3 | Ps. | 126,220.0 | Ps. | 156,905.2 | Ps. | 181,286.7 | 15.5 | |||||||||||||
Pemex Premium | 15,032.9 | 21,183.2 | 29,666.3 | 35,230.0 | 40,410.7 | 14.7 | ||||||||||||||||||
Aviation fuels | 151.6 | 150.1 | 128.7 | 179.0 | 180.4 | 0.8 | ||||||||||||||||||
Others | 148.5 | 97.8 | 97.7 | 63.7 | 94.4 | 48.2 | ||||||||||||||||||
Total | 84,671.0 | 114,708.6 | 156,112.7 | 192,377.8 | 221,972.2 | 15.4 | ||||||||||||||||||
Kerosene | ||||||||||||||||||||||||
Jet fuel | 6,282.1 | 8,338.7 | 11,774.8 | 16,899.6 | 18,897.1 | 11.8 | ||||||||||||||||||
Other kerosene | 160.9 | 132.7 | 140.3 | 153.4 | 192.3 | 25.4 | ||||||||||||||||||
Total | 6,443.0 | 8,471.4 | 11,914.9 | 17,053.0 | 19,089.5 | 11.9 | ||||||||||||||||||
Diesel | ||||||||||||||||||||||||
Pemex Diesel | 30,751.7 | 42,148.0 | 55,562.5 | 69,730.7 | 76,036.1 | 9.0 | ||||||||||||||||||
Others | 5,829.8 | 9,421.8 | 10,534.1 | 12,197.2 | 12,337.5 | 1.2 | ||||||||||||||||||
Total | 36,581.4 | 51,569.9 | 66,096.6 | 81,927.9 | 88,373.6 | 7.9 | ||||||||||||||||||
Fuel oil | ||||||||||||||||||||||||
Total | 32,305.0 | 35,639.3 | 33,900.1 | 41,122.6 | 43,298.9 | 5.3 | ||||||||||||||||||
Other refined products | ||||||||||||||||||||||||
Asphalts | 2,191.7 | 2,657.9 | 3,072.7 | 3,681.7 | 5,759.5 | 56.4 | ||||||||||||||||||
Lubricants | 1,034.5 | 1,299.6 | 1,338.6 | 1,598.6 | 2,059.9 | 28.9 | ||||||||||||||||||
Paraffins | 148.6 | 138.1 | 155.6 | 209.5 | 225.2 | 7.5 | ||||||||||||||||||
Others(3) | 1.2 | 27.8 | 35.1 | 48.6 | 79.8 | 64.2 | ||||||||||||||||||
Total | 3,375.8 | 4,123.4 | 4,602.0 | 5,538.3 | 8,124.3 | 46.7 | ||||||||||||||||||
Total Oil Products | Ps. | 163,376.4 | Ps. | 214,512.4 | Ps. | 272,626.6 | Ps. | 338,019.6 | Ps. | 380,858.5 | 12.7 | |||||||||||||
Petrochemicals(4) | Ps. | 662.1 | Ps. | 1,058.4 | Ps. | 1,814.6 | Ps. | 2,155.9 | Ps. | 2,448.6 | 13.6 |
(1) | Excludes IEPS tax and value added tax. See “—Taxes and Duties” below. | |
(2) | Figures have been restated to constant pesos as of December 31, 2006, by applying the inflation factors, as measured by the NCPI, from the respective years through December 31, 2006. For the five years ended December 31, 2006, the inflation factor is the average inflation rate for each of these years. | |
(3) | Includes aeroflex 1-2, coke and furfural extract. | |
(4) | These are petrochemical products produced at refineries operated by Pemex-Refining. |
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Year Ended December 31, | 2006 | |||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2005 | |||||||||||||||||||
(in thousands of barrels per day, except where otherwise indicated) | (%) | |||||||||||||||||||||||
Oil Products | ||||||||||||||||||||||||
Gasoline | ||||||||||||||||||||||||
Pemex Magna | 476.5 | 500.2 | 525.5 | 559.6 | 601.8 | 7.5 | ||||||||||||||||||
Pemex Premium | 88.5 | 100.1 | 110.4 | 111.7 | 116.3 | 4.1 | ||||||||||||||||||
Aviation fuels | 0.4 | 0.4 | 0.4 | 0.5 | 0.5 | 0.0 | ||||||||||||||||||
Others | 0.8 | 0.4 | 0.4 | 0.3 | 0.2 | (33.3 | ) | |||||||||||||||||
Total | 566.2 | 601.2 | 636.7 | 672.1 | 718.9 | 7.0 | ||||||||||||||||||
Kerosenes | ||||||||||||||||||||||||
Jet fuel | 53.3 | 54.2 | 57.8 | 58.7 | 61.2 | 4.3 | ||||||||||||||||||
Other kerosenes | 0.8 | 0.7 | 0.7 | 0.8 | 1.0 | 25.0 | ||||||||||||||||||
Total | 54.1 | 54.9 | 58.5 | 59.5 | 62.2 | 4.5 | ||||||||||||||||||
Diesel | ||||||||||||||||||||||||
Pemex Diesel | 228.0 | 240.7 | 255.4 | 273.4 | 297.9 | 9.0 | ||||||||||||||||||
Others | 42.7 | 54.0 | 47.3 | 46.7 | 46.9 | 0.4 | ||||||||||||||||||
Total | 270.7 | 294.7 | 302.7 | 320.1 | 344.9 | 7.7 | ||||||||||||||||||
Fuel oil | ||||||||||||||||||||||||
Total | 406.2 | 354.6 | 332.5 | 340.6 | 263.7 | (22.6 | ) | |||||||||||||||||
Other oil products | ||||||||||||||||||||||||
Asphalts | 21.6 | 22.2 | 24.5 | 26.9 | 28.8 | 7.1 | ||||||||||||||||||
Lubricants | 5.2 | 5.7 | 5.7 | 5.7 | 5.5 | (3.5 | ) | |||||||||||||||||
Paraffins | 1.1 | 1.0 | 1.1 | 1.1 | 1.0 | (9.1 | ) | |||||||||||||||||
Others(1) | 1.3 | 22.8 | 28.4 | 31.2 | 31.4 | 0.6 | ||||||||||||||||||
Total | 29.1 | 51.7 | 59.7 | 64.8 | 66.7 | 2.9 | ||||||||||||||||||
Total oil products | 1,326.2 | 1,357.1 | 1,390.0 | 1,457.1 | 1,456.4 | 0.0 | ||||||||||||||||||
Petrochemicals(2) | 235.3 | 272.3 | 286.0 | 289.0 | 333.8 | 15.5 |
(1) | Includes aeroflex 1-2, coke and furfural extract. | |
(2) | In thousands of metric tons. These are petrochemical by-products of the refining process produced and sold by Pemex-Refining. |
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• | Cactus: This facility contains twenty-two plants that together produced 652 million cubic feet per day of dry gas (which is natural gas with a methane content of more than 93%), 24 thousand barrels per day of ethane, 45 thousand barrels per day of liquefied gas, 21 thousand barrels per day of naphtha and 242 thousand tons of sulphur in 2006. | |
• | Ciudad Pemex: This facility contains eight plants that together produced 798 million cubic feet per day of dry gas and 232 thousand tons of sulphur in 2006. |
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• | Cangrejera: This facility contains two plants that together produced 36 thousand barrels per day of ethane, 44 thousand barrels per day of liquefied gas and 12 thousand barrels per day of naphtha in 2006. | |
• | Morelos: This facility contains one plant that produced 35 thousand barrels per day of ethane, 46 thousand barrels per day of liquefied gas and 11 thousand barrels per day of naphtha in 2006. | |
• | Nuevo Pemex: This facility contains 13 plants that together produced 899 million cubic feet per day of dry gas, 18 thousand barrels per day of ethane, 58 thousand barrels per day of liquefied gas, 33 thousand barrels per day of naphtha and 214 thousand tons of sulphur in 2006. | |
• | Pajaritos: This facility contains one plant that produced 10 thousand barrels per day of ethane in 2006. | |
• | La Venta: This facility contains one plant that produced 115 million cubic feet per day of dry gas in 2006. | |
• | Matapionche: This facility contains five plants that together produced 66 million cubic feet per day of dry gas, two thousand barrels per day of liquefied gas, one thousand barrels per day of naphtha and 11 thousand tons of sulphur in 2006. |
• | Reynosa: This facility contains two plants that together produced 188 million cubic feet per day of dry gas, 0.4 thousand barrels per day of ethane, three thousand barrels per day of liquefied gas, four thousand barrels per day of naphtha and one thousand barrels per day of other products in 2006. | |
• | Poza Rica: This facility contains four plants that together produced 85 million cubic feet per day of dry gas, three thousand barrels per day of ethane, two thousand barrels per day of liquefied gas, one thousand barrels per day of naphtha and nine thousand tons of sulphur in 2006. | |
• | Arenque: This facility contains three plants that together produced 30 million cubic feet per day of dry gas, one thousand barrels per day of ethane plus liquids and three thousand tons of sulphur in 2006. | |
• | Burgos: This facility contains seven plants that together produced 612 million cubic feet per day of dry gas, 14 thousand barrels per day of liquefied gas and eight thousand barrels per day of naphtha in 2006. | |
• | The following tables set forth Pemex-Gas and Basic Petrochemicals’ total natural gas processing and production, as well as processing capacity, for the five years ended December 31, 2006. |
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Year Ended December 31, | 2006 | |||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2005 | |||||||||||||||||||
(in millions of cubic feet per day, | (%) | |||||||||||||||||||||||
except where otherwise indicated) | ||||||||||||||||||||||||
Processing | ||||||||||||||||||||||||
Wet gas | 3,770 | 3,853 | 3,963 | 3,879 | 4,153 | 7.1 | ||||||||||||||||||
Sour gas | 3,260 | 3,360 | 3,349 | 3,153 | 3,203 | 1.6 | ||||||||||||||||||
Sweet gas(2) | 510 | 492 | 614 | 726 | 950 | 30.9 | ||||||||||||||||||
Condensates(3) | 94 | 95 | 107 | 102 | 101 | (1.0 | ) | |||||||||||||||||
Gas to natural gas liquids extraction | 3,746 | 3,829 | 3,925 | 3,810 | 4,108 | 7.8 | ||||||||||||||||||
Wet gas | 3,600 | 3,689 | 3,803 | 3,712 | 3,987 | 7.4 | ||||||||||||||||||
Reprocessing streams(4) | 146 | 141 | 123 | 98 | 121 | 23.5 | ||||||||||||||||||
Production | ||||||||||||||||||||||||
Dry gas(5) | 2,916 | 3,029 | 3,144 | 3,147 | 3,445 | 9.5 | ||||||||||||||||||
Natural gas liquids(6)(7) | 418 | 428 | 451 | 436 | 436 | 0.0 | ||||||||||||||||||
Liquefied petroleum gas(6) | 205 | 212 | 225 | 215 | 215 | 0.0 | ||||||||||||||||||
Ethane(6) | 127 | 125 | 133 | 129 | 127 | (1.6 | ) | |||||||||||||||||
Naphtha(6)(8) | 84 | 86 | 90 | 88 | 92 | 4.5 | ||||||||||||||||||
Sulphur(9) | 703 | 757 | 759 | 692 | 711 | 2.7 |
(1) | Excludes operations of Pemex-Exploration and Production. Pemex-Exploration and Production produced a total of 5,356 million cubic feet per day of natural gas in 2006. | |
(2) | Includes sweet vapor from condensates. | |
(3) | Includes internal streams. | |
(4) | Reprocessing of pipeline dry gas at various cryogenic plants. | |
(5) | Does not include ethane reinjected into the natural gas stream. | |
(6) | In thousands of barrels per day. | |
(7) | Includes stabilized condensates, reprocessing streams from the Cangrejera petrochemical complex and other streams for fractionating. | |
(8) | Includes pentanes. | |
(9) | In thousands of tons. |
Year Ended December 31, | ||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||
(In millions of cubic feet per day, | ||||||||||||||||||||
except where otherwise indicated) | ||||||||||||||||||||
Sweetening plants | ||||||||||||||||||||
Sour condensates(1)(2) | 144 | 144 | 144 | 144 | 144 | |||||||||||||||
Sour natural gas(2)(3) | 4,173 | 4,503 | 4,503 | 4,503 | 4,503 | �� | ||||||||||||||
Natural gas liquids recovery plants | ||||||||||||||||||||
Cryogenics(4) | 4,559 | 4,592 | 4,992 | 4,992 | 5,392 | |||||||||||||||
Absorption(3)(5) | 475 | 554 | 554 | 350 | 350 | |||||||||||||||
Total | 5,034 | 5,146 | 5,546 | 5,342 | 5,742 | |||||||||||||||
Natural gas liquids fractionating(1)(3)(5) | 563 | 569 | 574 | 574 | 587 | |||||||||||||||
Processing of hydrosulphuric acid(6) | 219 | 219 | 219 | 219 | 219 |
(1) | In thousands of barrels per day. | |
(2) | In 2002, sour gas sweetening plants No. 1 and No. 2 at Ciudad Pemex increased production capacity from 400 to 525 million cubic feet per day. In 2003, a sour natural gas sweetening plant began operations at the Arenque complex, with a capacity of 34 million cubic feet per day. | |
(3) | In 2003, as a result of Pemex-Gas and Basic Petrochemicals’ processing capacity review, adjustments set forth above to the capacity of plants to process sour natural gas, absorb natural gas liquids and fractionate natural gas liquids were made. | |
(4) | Includes the cryogenic plant located in Cangrejera. In 2003, a new cryogenic plant began operations at the Arenque complex, with a capacity of 33 million cubic feet per day. In 2004, two modular cryogenic plants started operations at the Burgos complex, each with |
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a capacity of 200 million cubic feet per day. In 2006, two additional modular cryogenic plants started operations at the Burgos complex, each with a capacity of 200 million cubic feet per day. |
(5) | In 2002, the Cangrejera plant increased its liquids fractionating capacity from 104 thousand barrels per day to 113 thousand barrels per day. In 2004, a liquids fractionating plant began operations at the Burgos complex, with a capacity of 5.7 thousand barrels per day. In 2006, this plant’s processing capacity was adjusted to four thousand barrel per day. In 2006, two liquids fractionating plants began operations at the Burgos complex, each with a capacity of seven thousand barrels per day. | |
(6) | In 2003, one sulphur recovery plant began operations at the Arenque complex, with a capacity of 13 tons per day of sulphur production. This increase in capacity was offset by a decrease in capacity at Matapionche. |
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Year Ended December 31, | 2006 | |||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2005 | |||||||||||||||||||
(in millions of constant pesos at December 31, 2006)(2) | (%) | |||||||||||||||||||||||
Natural gas | Ps. | 36,664.0 | Ps. | 59,047.2 | Ps. | 74,399.7 | Ps. | 82,242.2 | Ps. | 75,354.6 | (8.4 | ) | ||||||||||||
Liquefied petroleum gas | 31,613.6 | 42,513.3 | 45,871.6 | 50,497.9 | 52,706.1 | 4.4 | ||||||||||||||||||
Petrochemicals | ||||||||||||||||||||||||
Hexane | 162.0 | 251.0 | 307.5 | 423.2 | 378.3 | (10.6 | ) | |||||||||||||||||
Dissolving agents | 258.1 | 48.5 | 67.1 | 116.4 | 109.8 | (5.7 | ) | |||||||||||||||||
Sulphur | 133.6 | 224.0 | 203.2 | 192.9 | 238.1 | 23.4 | ||||||||||||||||||
Carbon black | 164.1 | 316.5 | 398.9 | 662.3 | 819.8 | 23.8 | ||||||||||||||||||
Pentanes | 57.3 | 26.6 | 49.7 | 40.4 | 72.6 | 79.7 | ||||||||||||||||||
Heptane | 24.6 | 34.8 | 44.7 | 67.2 | 69.8 | 3.9 | ||||||||||||||||||
Butane | 44.1 | 63.2 | 74.9 | 91.8 | 100.3 | 9.3 | ||||||||||||||||||
Propane | 22.7 | 32.3 | 43.9 | 45.7 | 49.1 | 7.4 | ||||||||||||||||||
Isobutane | 3.0 | 0.4 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||
Others | 135.0 | 9.1 | 14.9 | 4.6 | 6.0 | 30.4 | ||||||||||||||||||
Total Petrochemicals | 1,004.8 | 1,006.2 | 1,204.8 | 1,644.7 | 1,843.9 | 12.1 | ||||||||||||||||||
Total | Ps. | 69,282.5 | Ps. | 102,566.7 | Ps. | 121,476.0 | Ps. | 134,384.6 | Ps. | 129,904.6 | (3.3 | ) | ||||||||||||
(1) | Excludes value added tax. | |
(2) | Figures have been restated to constant pesos as of December 31, 2006, by applying the inflation factors from the respective years through December 31, 2006. For the five years ended December 31, 2006, the inflation factor is the average inflation rate for each of these years. |
Ownership | ||||||
Subsidiary | Principal Activity | Interest | ||||
Mex Gas International, Ltd. | Holding company | 100.00 | % | |||
Pasco Terminals, Inc. | Storage and distribution of liquid sulphur | 100.00 | ||||
Pasco International, Ltd. | Holding company | 100.00 | ||||
Pan American Sulphur, Ltd. | Storage and distribution of sulphuric acid and distillates | 99.87 | ||||
Terrenos para Industrias, S.A. | Real estate holding company | 100.00 |
(1) | As of December 31, 2006. | |
(2) | Mex Gas International, Ltd. is the only subsidiary of Pemex-Gas and Basic Petrochemicals that is a consolidated subsidiary company. See Note 2c. to our consolidated financial statements included herein. |
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Ownership | ||||||
Subsidiary | Principal Activity | Interest | ||||
Gasoductos de Chihuahua, S. de R.L. de C.V | Transport of gas | 50.00 | % | |||
CH4 Energía, S.A. de C.V. | Trading of gas | 50.00 |
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• | Customers could purchase natural gas swaps from us at a fixed price equal to a maximum of U.S. $4.50 per million BTUs over the period from January 1, 2004 through December 31, 2006 for purchases of up to 10 million cubic feet per day. If the customer’s requirements were higher (up to 20 million cubic feet per day), the fixed price was U.S. $4.55 per million BTUs; or | |
• | Customers could purchase natural gas swaps from us for the period between January 2004 through December 2004 at a lower fixed price of U.S. $4.425 per million BTUs, so long as the reference price in Reynosa did not exceed U.S. $6.00 per million BTUs. If the reference price exceeded that amount, the customer would also pay the difference between U.S. $6.00 per million BTUs and the average spot price. In June 2004, all the customers who had already entered the program agreed to renew their respective contracts for the period from 2005 through 2006. |
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Year Ended December 31, | ||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||
(in thousands of tons) | ||||||||||||||||||||
Petrochemical Facility | ||||||||||||||||||||
Cosoleacaque | 4,998 | 4,975 | 4,975 | 4,975 | 4,975 | |||||||||||||||
Cangrejera | 2,427 | 3,205 | 3,255 | 3,280 | 3,280 | |||||||||||||||
Morelos | 2,107 | 2,263 | 2,263 | 2,263 | 2,263 | |||||||||||||||
Pajaritos | 1,021 | 1,021 | 1,021 | 1,021 | 1,021 | |||||||||||||||
Escolín | 337 | 337 | 337 | 337 | 337 | |||||||||||||||
San Martín Texmelucan | 268 | 288 | 288 | 288 | 288 | |||||||||||||||
Camargo | 333 | 333 | 333 | 333 | 333 | |||||||||||||||
Tula | 71 | 76 | 76 | 76 | 76 | |||||||||||||||
Total | 11,561 | 12,496 | 12,546 | 12,571 | 12,571 | |||||||||||||||
Source:Pemex BDI.
• | methane derivatives, such as ammonia and methanol; | |
• | ethane derivatives, such as ethylene, polyethylenes, vinyl chloride monomer, ethylene oxide and glycols; | |
• | aromatics and their derivatives, such as paraxylene, styrene, bencene, toluene and xylenes; | |
• | propylene and its derivatives, such as acrylonitrile and propylene; and | |
• | other products, such as oxygen, nitrogen, hexane, heptane, pyrolysis liquids, specialty petrochemical products, hydrochloric acid and muriatic acid. |
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�� | ||||||||||||||||||||||||
Year Ended December 31, | 2006 | |||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2005 | |||||||||||||||||||
(in thousands of tons per year) | (%) | |||||||||||||||||||||||
Liquids | ||||||||||||||||||||||||
Hexanes | 57 | 70 | 66 | 66 | 53 | (19.7 | ) | |||||||||||||||||
Heptanes | 8 | 18 | 11 | 15 | 14 | (6.7 | ) | |||||||||||||||||
Total | 65 | 88 | 77 | 81 | 68 | (16.0 | ) | |||||||||||||||||
Other inputs | ||||||||||||||||||||||||
Oxygen | 376 | 399 | 418 | 433 | 447 | 3.2 | ||||||||||||||||||
Nitrogen | 109 | 106 | 112 | 118 | 117 | (0.8 | ) | |||||||||||||||||
Hydrogen | — | 167 | 162 | 184 | 167 | (9.2 | ) | |||||||||||||||||
Total | 485 | 672 | 692 | 735 | 731 | (0.5 | ) | |||||||||||||||||
Petrochemicals | ||||||||||||||||||||||||
Methane derivatives | 1,663 | 1,383 | 1,668 | 1,242 | 1,404 | 13.0 | ||||||||||||||||||
Ethane derivatives | 2,309 | 2,218 | 2,073 | 2,440 | 2,748 | 12.6 | ||||||||||||||||||
Aromatics and derivatives | 670 | 795 | 1,222 | 1,187 | 1,089 | (8.3 | ) | |||||||||||||||||
Propylene and derivatives | 115 | 125 | 116 | 104 | 24 | (76.9 | ) | |||||||||||||||||
Others | 467 | 723 | 327 | 321 | 338 | 5.3 | ||||||||||||||||||
Total | 5,224 | 5,244 | 5,406 | 5,294 | 5,603 | 5.8 | ||||||||||||||||||
Other products | ||||||||||||||||||||||||
Hydrochloric acid | 92 | 66 | 38 | 93 | 126 | 35.5 | ||||||||||||||||||
Muriatic acid | 24 | 14 | 11 | 16 | 44 | 175.0 | ||||||||||||||||||
Total | 116 | 81 | 49 | 109 | 170 | 56.0 | ||||||||||||||||||
Total | 5,889 | 6,085 | 6,223 | 6,219 | 6,572 | 5.7 | ||||||||||||||||||
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Year Ended December 31, | 2006 | |||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2005 | |||||||||||||||||||
(in millions of constant pesos at December 31, 2006)(2) | (%) | |||||||||||||||||||||||
Petrochemical Product | ||||||||||||||||||||||||
Ethane derivatives | Ps. | 4,903.3 | Ps. | 7,144.8 | Ps. | 8,953.4 | Ps. | 10,682.9 | Ps. | 11,240.6 | 5.2 | |||||||||||||
Aromatics and derivatives | 1,586.9 | 2,204.4 | 5,005.0 | 5,789.3 | 5,831.5 | 0.7 | ||||||||||||||||||
Methane derivatives | 1,324.5 | 1,889.5 | 2,331.3 | 2,646.8 | 2,685.9 | 1.5 | ||||||||||||||||||
Propylene and derivatives | 636.2 | 877.8 | 1,200.9 | 1,131.4 | 339.8 | (70.0 | ) | |||||||||||||||||
Others | 105.2 | 152.2 | 156.8 | 276.7 | 268.4 | (3.0 | ) | |||||||||||||||||
Total | Ps. | 8,556.0 | Ps. | 12,268.7 | Ps. | 17,647.3 | Ps. | 20,527.1 | Ps. | 20,366.2 | (0.8 | ) | ||||||||||||
(1) | Excludes value added tax. | |
(2) | Figures have been restated to constant pesos as of December 31, 2006, by applying the inflation factors from the respective years through December 31, 2006. For the five years ended December 31, 2006, the inflation factor is the average inflation rate for each of these years. |
• | Petroquímica Cosoleacaque, S.A. de C.V.; | |
• | Petroquímica Escolín, S.A. de C.V.; | |
• | Petroquímica Tula, S.A. de C.V.; | |
• | Petroquímica Camargo, S.A. de C.V.; |
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• | Petroquímica Cangrejera, S.A. de C.V.; | |
• | Petroquímica Morelos, S.A. de C.V.; and | |
• | Petroquímica Pajaritos, S.A. de C.V. |
• | take advantage of the existing production chains in these former subsidiaries to improve our production, planning and commercialization processes and maximize the return on our investments; | |
• | generate synergies with respect to the installations, inventory, purchases and specialized technical resources of each of our production centers; | |
• | improve the management of our supply chains and our relationships with our suppliers and customers; | |
• | reduce our operational expenses; and | |
• | provide petrochemical products to national and international markets more effectively and focus our efforts on being an integrated company. |
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Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||||||||||||||||||||||
(tbpd) | (%) | (tbpd) | (%) | (tbpd) | (%) | (tbpd) | (%) | (tbpd) | (%) | |||||||||||||||||||||||||||||||
Crude oil exports (by volume) | ||||||||||||||||||||||||||||||||||||||||
Olmeca (API gravity of 38°-39°) | 245 | 14 | 216 | 12 | 221 | 12 | 216 | 12 | 231 | 13 | ||||||||||||||||||||||||||||||
Isthmus (API gravity of 32°-33°) | 46 | 3 | 25 | 1 | 27 | 1 | 81 | 4 | 68 | 4 | ||||||||||||||||||||||||||||||
Maya (API gravity of 21°-22°) | 1,398 | 82 | 1,590 | 86 | 1,608 | 86 | 1,506 | 83 | 1,480 | 83 | ||||||||||||||||||||||||||||||
Altamira (API gravity 15.0°-16.5°) | 17 | 1 | 14 | 1 | 13 | 1 | 15 | 1 | 14 | 1 | ||||||||||||||||||||||||||||||
Total | 1,705 | 100 | 1,844 | 100 | 1,870 | 100 | 1,817 | 100 | 1,793 | 100 | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||
(U.S. dollars per barrel) | ||||||||||||||||||||
Crude Oil Prices | ||||||||||||||||||||
Olmeca | U.S.$ | 24.87 | U.S.$ | 29.32 | U.S.$ | 39.34 | U.S.$ | 53.91 | U.S.$ | 64.67 | ||||||||||
Isthmus | 23.48 | 28.08 | 38.04 | 53.11 | 57.29 | |||||||||||||||
Maya | 20.89 | 24.13 | 29.82 | 40.61 | 51.10 | |||||||||||||||
Altamira | 19.41 | 22.81 | 28.12 | 36.07 | 45.75 | |||||||||||||||
Weighted average realized price | U.S.$ | 21.52 | U.S.$ | 24.78 | U.S.$ | 31.05 | U.S.$ | 42.71 | U.S.$ | 53.04 |
Percentage of Exports | ||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||
United States | 78.6 | % | 78.0 | % | 79.2 | % | 78.6 | % | 80.3 | % | ||||||||||
Spain | 8.3 | 7.8 | 8.0 | 8.9 | 8.0 | |||||||||||||||
Netherlands Antilles | 5.3 | 5.7 | 6.2 | 5.2 | 4.3 | |||||||||||||||
Japan | 0.6 | 0.6 | 0.0 | 0.0 | 0.0 | |||||||||||||||
Canada | 1.2 | 1.6 | 1.5 | 2.0 | 2.0 | |||||||||||||||
Others | 6.1 | 6.4 | 5.0 | 5.4 | 5.3 | |||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
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At December 31, | ||||||||||||||||||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||||||||||||||||||||||
(tbpd) | (%) | (tbpd) | (%) | (tbpd) | (%) | (tbpd) | (%) | (tbpd) | (%) | |||||||||||||||||||||||||||||||
PMI Crude Oil Export Sales to: | ||||||||||||||||||||||||||||||||||||||||
United States and Canada | 1,360 | 80 | 1,467 | 80 | 1,510 | 81 | 1,464 | 81 | 1,477 | 82 | ||||||||||||||||||||||||||||||
Europe | 181 | 11 | 176 | 10 | 178 | 10 | 194 | 11 | 171 | 10 | ||||||||||||||||||||||||||||||
Central and South America | 117 | 7 | 137 | 7 | 145 | 8 | 125 | 7 | 113 | 6 | ||||||||||||||||||||||||||||||
Far East | 47 | 3 | 63 | 3 | 36 | 2 | 34 | 2 | 32 | 2 | ||||||||||||||||||||||||||||||
Africa | — | — | 1 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Total | 1,705 | 100 | 1,844 | 100 | 1,870 | 100 | 1,817 | 100 | 1,793 | 100 | ||||||||||||||||||||||||||||||
Olmeca (API gravity of 38°-39°) | ||||||||||||||||||||||||||||||||||||||||
United States and Canada | 225 | 13 | 195 | 11 | 208 | 11 | 200 | 11 | 214 | 12 | ||||||||||||||||||||||||||||||
Others | 20 | 1 | 21 | 1 | 14 | 1 | 16 | 1 | 17 | 1 | ||||||||||||||||||||||||||||||
Total | 245 | 14 | 216 | 12 | 221 | 12 | 216 | 12 | 231 | 13 | ||||||||||||||||||||||||||||||
Isthmus (API gravity of 32°-33°) | ||||||||||||||||||||||||||||||||||||||||
United States and Canada | 29 | 2 | 11 | 1 | 6 | — | 38 | 2 | 41 | 2 | ||||||||||||||||||||||||||||||
Others | 17 | 1 | 14 | 1 | 22 | 1 | 43 | 2 | 27 | 1 | ||||||||||||||||||||||||||||||
Total | 46 | 3 | 25 | 1 | 27 | 1 | 81 | 4 | 68 | 4 | ||||||||||||||||||||||||||||||
Maya (API gravity of 21°-22°) | ||||||||||||||||||||||||||||||||||||||||
United States and Canada | 1,090 | 64 | 1,247 | 68 | 1,283 | 69 | 1,212 | 67 | 1,208 | 67 | ||||||||||||||||||||||||||||||
Others | 308 | 18 | 342 | 19 | 325 | 17 | 294 | 16 | 272 | 15 | ||||||||||||||||||||||||||||||
Total | 1,398 | 82 | 1,590 | 86 | 1,608 | 86 | 1,506 | 83 | 1,480 | 83 | ||||||||||||||||||||||||||||||
Altamira (API gravity of 15.0°-16.5°) | ||||||||||||||||||||||||||||||||||||||||
United States and Canada | 17 | 1 | 14 | 1 | 13 | 1 | 15 | 1 | 14 | 1 | ||||||||||||||||||||||||||||||
Others | — | — | — | — | — | — | — | — | 1 | — | ||||||||||||||||||||||||||||||
Total | 17 | 1 | 14 | 1 | 13 | 1 | 15 | 1 | 14 | 1 | ||||||||||||||||||||||||||||||
• | an agreement with Port Arthur Coker Co., signed on March 10, 1998, which was assigned to Valero Energy Corporation on November 1, 2005, to supply its Port Arthur, Texas refinery with Maya crude oil for a period of eight years following project completion, which |
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occurred in March 2001; the amount of Maya crude oil supplied is adjusted every six months and is currently set at 195 thousand barrels per day; |
• | an agreement with Coastal Aruba Refining Company, N.V. (which was assigned to Valero Energy Corporation on March 5, 2004 following its acquisition of Coastal Aruba Refining Company, N.V.), signed on July 30, 1998, to supply its refinery in Aruba with approximately 100 thousand barrels per day of Maya crude oil for a period of five years following project completion, which occurred in April 2000. The agreement was extended until July 2005, after which time PMI continued to supply the same amount of Maya crude oil for the refinery under an evergreen contract signed in July 1996 with Valero Marketing & Supply Company; | |
• | an agreement with Exxon Company U.S.A. and Exxon Trading Company International, signed on September 25, 1998, to supply its Baytown, Texas refinery with approximately 65 thousand barrels per day of Maya crude oil for a period of five years following project completion, which occurred in December 2001. Following the merger of Exxon Corporation and Mobil Corporation, this agreement was replaced with a new agreement containing similar terms and provisions, signed by Exxon Mobil Sales & Supply Corporation in December 1999. This long-term agreement ended on December 21, 2006, but PMI continues to supply the same amount of Maya crude oil for the refinery under an existing evergreen contract; | |
• | an agreement with Pecten Trading Company, which is a trading subsidiary of Shell Oil Company, signed on May 1, 1999, and an agreement with P.M.I. Norteamérica, S.A. de C.V., signed on the same date, to supply the Deer Park refinery joint venture with a total of approximately 50 thousand barrels per day of Maya crude oil for a period of seven years following project completion, which occurred in April 2001, and up to 170 thousand barrels per day until 2023; | |
• | an agreement with Marathon Petroleum Supply, LLC (formerly Marathon Ashland Supply, LLC), signed on May 19, 1999, to supply its Garyville, Louisiana refinery with approximately 100 thousand barrels per day of Maya crude oil for a period of five years following project completion, which occurred in December 2001. This agreement ended in December 2006, but PMI continues to supply the same amount of Maya crude oil for the refinery under a new evergreen contract; | |
• | an agreement with Valero Marketing and Supply Company and Valero Refining—Texas, L.P., signed on December 17, 2001, to supply their Texas City, Texas refinery with approximately 90 thousand barrels per day of Maya crude oil for a period of five years following project completion, which occurred in January 2004; | |
• | an agreement with Chevron Products Company, a division of Chevron U.S.A. Inc., signed on March 6, 2002, to supply its Pascagoula, Mississippi refinery with approximately 130 thousand barrels per day of Maya crude oil for a period of five years following project completion, which occurred in May 2003; and | |
• | an agreement with Hunt Crude Oil Supply Company, signed on December 19, 2005, to supply its refinery in Tuscaloosa, Alabama, with approximately 14 thousand barrels per day of Altamira crude oil for a period of five years following project completion, which is programmed to occur in June 2007. |
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Year Ended December 31, | 2006 | |||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2005 | |||||||||||||||||||
(in thousands barrels per day, except as noted) | (%) | |||||||||||||||||||||||
Exports | ||||||||||||||||||||||||
Crude Oil | ||||||||||||||||||||||||
Olmeca | 244.8 | 215.6 | 221.4 | 215.8 | 230.6 | 6.9 | ||||||||||||||||||
Isthmus | 45.8 | 24.9 | 27.4 | 81.0 | 68.3 | (15.7 | ) | |||||||||||||||||
Altamira | 16.9 | 13.7 | 13.4 | 14.7 | 14.3 | (2.7 | ) | |||||||||||||||||
Maya | 1,397.6 | 1,589.6 | 1,608.1 | 1,505.6 | 1,479.5 | (1.7 | ) | |||||||||||||||||
Total crude oil | 1,705.1 | 1,843.9 | 1,870.3 | 1,817.1 | 1,792.7 | (1.3 | ) | |||||||||||||||||
Natural gas(1) | 4.4 | — | — | 23.9 | 32.7 | 36.8 | ||||||||||||||||||
Refined products | 155.9 | 178.9 | 151.8 | 186.2 | 188.2 | 1.1 | ||||||||||||||||||
Petrochemical products(2) | 801.7 | 834.8 | 915.7 | 853.6 | 823.7 | (3.5 | ) | |||||||||||||||||
Imports | ||||||||||||||||||||||||
Natural gas(3) | 592.5 | 756.9 | 765.6 | 480.4 | 451.0 | (6.1 | ) | |||||||||||||||||
Refined products | 349.9 | 287.2 | 310.5 | 391.9 | 430.1 | 9.7 | ||||||||||||||||||
Petrochemical products(2) | 295.3 | 532.4 | 276.6 | 397.4 | 435.6 | 9.6 |
Note: | Numbers are subject to adjustment because the volume of crude oil exports actually sold during December 2006 may be adjusted to reflect the percentage of water in each shipment. |
(1) | Fuel oil equivalent. | |
(2) | Thousands of metric tons. | |
(3) | Millions of cubic feet per day. |
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Year ended December 31, | 2006 | |||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2005 | |||||||||||||||||||
(in millions of nominal U.S. dollars) | (%) | |||||||||||||||||||||||
Exports | ||||||||||||||||||||||||
Olmeca | $ | 2,222.9 | $ | 2,307.7 | 3,187.9 | 4,246.4 | 5,443.4 | 28.2 | ||||||||||||||||
Isthmus | 392.5 | 255.4 | 380.9 | 1,569.6 | 1,427.9 | (9.0 | ) | |||||||||||||||||
Altamira | 119.6 | 114.5 | 138.2 | 193.8 | 238.9 | 23.3 | ||||||||||||||||||
Maya | 10,657.2 | 13,998.7 | 17,551.0 | 22,319.8 | 27,596.9 | 23.6 | ||||||||||||||||||
Total crude oil(2) | $ | 13,392.2 | $ | 16,676.3 | $ | 21,257.9 | $ | 28,329.5 | $ | 34,707.2 | 22.5 | |||||||||||||
Natural gas | 4.0 | — | — | 78.9 | 71.8 | (9.0 | ) | |||||||||||||||||
Refined products | 1,288.1 | 1,743.5 | 2,036.8 | 3,119.2 | 3,758.0 | 20.5 | ||||||||||||||||||
Petrochemical products | 145.3 | 185.9 | 250.8 | 356.7 | 352.6 | (1.0 | ) | |||||||||||||||||
Total products | $ | 1,437.4 | $ | 1,929.4 | $ | 2,287.6 | $ | 3,554.8 | $ | 4,182.4 | 17.7 | |||||||||||||
Total exports | $ | 14,829.6 | $ | 18,605.7 | $ | 23,545.5 | $ | 31,884.1 | $ | 38,889.6 | 22.0 | |||||||||||||
Imports | ||||||||||||||||||||||||
Natural gas | $ | 775.4 | $ | 1,526.2 | $ | 1,715.1 | $ | 1,397.9 | $ | 1,134.5 | (18.8 | ) | ||||||||||||
Refined products | 3,827.4 | 3,777.3 | 5,306.2 | 9,418.2 | 11,973.7 | 27.1 | ||||||||||||||||||
Petrochemical products | 70.2 | 105.5 | 145.9 | 207.4 | 264.8 | 27.7 | ||||||||||||||||||
Total imports | $ | 4,673.0 | $ | 5,409.0 | $ | 7,167.2 | $ | 11,023.5 | $ | 13,373.0 | 21.3 | |||||||||||||
Net exports | $ | 10,156.6 | $ | 13,196.7 | $ | 16,378.3 | $ | 20,860.6 | $ | 25,516.6 | 22.3 | |||||||||||||
(1) | Does not include crude oil, refined products, petrochemicals and natural gas purchased by P.M.I. Trading, Ltd. or P.M.I. Norteamérica, S.A. de C.V. from third parties outside of Mexico and resold in the international markets. The figures expressed in this table differ from the amounts contained in the financial statements under “Net Sales” because of the differences in methodology associated with the calculation of the exchange rates and other minor adjustments. | |
(2) | Crude oil exports are subject to adjustment to reflect the percentage of water in each shipment. |
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Year Ended December 31, | ||||||||||||||||||||||||
2004 | 2005 | 2006 | ||||||||||||||||||||||
(tbpd) | (%) | (tbpd) | (%) | (tbpd ) | (%) | |||||||||||||||||||
Imports | ||||||||||||||||||||||||
Gasoline(1) | 192.6 | 62.0 | 249.4 | 63.6 | 280.2 | 65.1 | ||||||||||||||||||
Fuel oil | 17.1 | 5.5 | 27.5 | 7.0 | 14.3 | 3.3 | ||||||||||||||||||
Liquefied petroleum gas | 84.4 | 27.2 | 72.9 | 18.6 | 75.6 | 17.6 | ||||||||||||||||||
Diesel | 3.6 | 1.2 | 24.9 | 6.4 | 41.3 | 9.6 | ||||||||||||||||||
Others | 12.8 | 4.1 | 17.2 | 4.4 | 18.7 | 4.3 | ||||||||||||||||||
Total | 310.5 | 100.0 | % | 391.9 | 100.0 | % | 430.1 | 100.0 | % | |||||||||||||||
Exports | ||||||||||||||||||||||||
Gasoline(1) | 76.7 | 50.5 | 81.3 | 43.7 | 86.9 | 46.2 | ||||||||||||||||||
Diesel | 7.7 | 5.1 | 0.4 | 0.2 | 0.2 | 0.1 | ||||||||||||||||||
Liquefied petroleum gas | 0.2 | 0.1 | 1.8 | 0.9 | 2.1 | 1.1 | ||||||||||||||||||
Jet fuel | 6.8 | 4.5 | 6.9 | 3.7 | 6.3 | 3.3 | ||||||||||||||||||
Fuel oil | 3.5 | 2.3 | 0.8 | 0.4 | 38.0 | 20.2 | ||||||||||||||||||
Others | 56.9 | 37.5 | 94.9 | 51.0 | 54.6 | 29.0 | ||||||||||||||||||
Total | 151.8 | 100.0 | % | 186.2 | 100.0 | % | 188.2 | 100.0 | % | |||||||||||||||
(1) | Includes methyl terbutyl ether (MTBE) and pentanes. |
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Year Ended December 31, | ||||||||||||||||||||||||
2004 | 2005 | 2006 | ||||||||||||||||||||||
(tmt) | (%) | (tmt) | (%) | (tmt) | (%) | |||||||||||||||||||
Imports | ||||||||||||||||||||||||
Isobutane-butane-hex1 | 167.4 | 60.5 | 140.2 | 35.3 | 185.2 | 42.5 | ||||||||||||||||||
Methanol | 37.9 | 13.7 | 123.5 | 31.1 | 153.4 | 35.2 | ||||||||||||||||||
Ammonia | 14.7 | 5.3 | 74.6 | 18.8 | 50.7 | 11.6 | ||||||||||||||||||
Polyethylene | 10.7 | 3.9 | 4.1 | 1.0 | 0.0 | 0.0 | ||||||||||||||||||
Xylenes | 18.5 | 6.7 | 22.8 | 5.7 | 33.2 | 7.6 | ||||||||||||||||||
Toluene | 10.2 | 3.7 | 3.7 | 0.9 | 9.2 | 2.1 | ||||||||||||||||||
Benzene | 3.3 | 1.2 | — | — | — | — | ||||||||||||||||||
Others | 14.0 | 5.0 | 28.4 | 7.2 | 3.9 | 0.9 | ||||||||||||||||||
Total | 276.6 | 100.0 | % | 397.4 | 100.0 | % | 435.6 | 100.0 | % | |||||||||||||||
Exports | ||||||||||||||||||||||||
Sulphur | 607.2 | 66.3 | 487.1 | 57.1 | 484.6 | 58.8 | ||||||||||||||||||
Ammonia | 35.9 | 3.9 | 0.0 | 0.0 | 35.7 | 4.3 | ||||||||||||||||||
Ethylene | 154.3 | 16.9 | 163.9 | 19.2 | 80.1 | 9.7 | ||||||||||||||||||
Polyethylenes | 25.5 | 2.8 | 39.2 | 4.6 | 94.7 | 11.5 | ||||||||||||||||||
Others | 92.9 | 10.1 | 163.4 | 19.1 | 128.7 | 15.6 | ||||||||||||||||||
Total | 915.7 | 100.0 | % | 853.6 | 100.0 | % | 823.7 | 100.0 | % | |||||||||||||||
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• | foster a company culture of safety and environmental protection; | |
• | improve the safety of our workers and facilities; | |
• | reduce risks to the residents surrounding our facilities; and | |
• | protect the environment. |
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Estimated Affected Area | Estimated Liability | |||||||
(in hectares) | (in thousands of pesos) | |||||||
Northern region | 266.74 | Ps. 533,482 | ||||||
Southern region | 14.72 | 19,361 | ||||||
Southeastern Marine region | — | — | ||||||
Total(1) | 281.46 | Ps. 552,843 | ||||||
(1) | During 2006, environmental remediation was completed on 47.43 hectares. There were 41.29 hectares of additional affected areas, including 13.27 hectares in the Northern region and 28.01 hectares in the Southern region, which were affected as a result of spills from pipelines. |
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Holding Ponds Drainage | ||||||||
Number of | Estimated | |||||||
Holding Ponds | Liability | |||||||
(in thousands of | ||||||||
pesos) | ||||||||
Northern region(1) | 256 | Ps. | 127,541 | |||||
Southern region | 5 | 10,228 | ||||||
Total | 261 | 137,769 | ||||||
Total estimated environmental liabilities of Pemex-Exploration and Production | Ps.690,612 | |||||||
(1) | A total of 305 holding ponds, 300 in the Northern region and 5 in the Southern region, were restored and discharged as liabilities for 2006. A total of 229 holding ponds, in the Northern region, were classified as new liabilities. |
Estimated | Estimated | |||||||
affected area | Liability | |||||||
(in hectares) | (in thousands | |||||||
of pesos) | ||||||||
Pipelines | 7.48 | Ps. 63,012 | ||||||
Refineries(1) | 241.73 | 714,376 | ||||||
Storage and Distribution Terminals,(2) | 58.47 | 215,532 | ||||||
Other affected areas | 52.00 | 300,000 | ||||||
Total | 359.68 | Ps.1,292,919 | ||||||
(1) | In 2006, SEMARNAT required a complementary characterization site study at the former Azcapotzalco refinery. With the new study’s information, 76.42 hectares were classified as new liabilities, 59.42 hectares at the former Azcapotzalco refinery and 17.00 hectares at the former Azcapotzalco storage and distribution terminal, with an estimated cost of Ps. 511.40 million. |
(2) | New information from a contaminants dispersion evaluation at Santa Alejandrina swamp in Minatitlán, Veracruz increased the estimated liability of this site by Ps. 149.46 million. |
Estimated | Estimated | |||||||
affected area | Liability | |||||||
(in hectares) | (in thousands of | |||||||
pesos) | ||||||||
Gas Complex Processors(1) | 23.41 | Ps. 264,953 | ||||||
Pipelines | 1.80 | 8,935 | ||||||
Total | 25.21 | Ps. 273,888 | ||||||
(1) | Seven gas processing plant complexes and one gas processing plant have been audited and six gas processing plant complexes were determined to require environmental remediation. In 2006, restoration activities were performed at the processing plant complex in Reynosa with an associated cost of Ps. 1.12 million. |
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Estimated | Estimated | |||||||
affected area | Liability | |||||||
(in hectares) | (in thousands of | |||||||
pesos) | ||||||||
Cangrejera petrochemical complex | 0.30 | Ps. | 1,780 | |||||
Pajaritos petrochemical complex(1) | 10.53 | 52,175 | ||||||
Total(2) | 10.83 | Ps. | 53,955 | |||||
(1) | Current value adjustment, increasing the estimated liability of this site by Ps. 4,061 million. |
(2) | All of Pemex-Petrochemicals’ plants have been audited and the table above reflects the only plants determined to require environmental remediation. |
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• | We confirmed that we support the ten principles of the United Nations Global Compact in respect to human rights, labor rights, the environment and anti-corruption. | |
• | We sponsored and organized the Fourth International Symposium on Corporate Social Responsibility in the Americas, which was co-sponsored by the Regional Association of Oil and Gas Companies in Latin America and the Caribbean (ARPEL). | |
• | We launched the Ecological Restoration Program in Santa Alejandrina, pursuant to which we are refitting works at the Minatitlán Refinery in Veracruz in accordance with certain requirements of SEMARNAT. | |
• | We received authorization from SEMARNAT in order to start the remediation work at the former refinery in Azcapotzalco to transform it into a recreational park. This remediation work was initiated in 2007. |
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Ordinary Hydrocarbons Duty | For the years 2006 to 2009, a variable tax rate, which will fluctuate between 78.68% and 87.81%, will apply depending on the weighted average Mexican crude oil export price and the year. As of 2010, the applicable rate will be 79%. This duty is applied to the annual value of extracted production of crude oil and natural gas minus certain permitted deductions (including specific investments, certain costs and expenses, and the other duties referred to below, subject to certain conditions). | |
Hydrocarbon Duty for the Oil RevenuesStabilization Fund | Rates between 1% and 10% are applied to the value of the extracted crude oil production when the weighted average crude oil export price for a certain year exceeds between U.S. $22.00 and U.S. $31.00 per barrel. | |
Duty for the Fund for Scientific andTechnological Research onEnergy | A rate of 0.05% is applied to the value of extracted crude oil and natural gas production for the year. | |
Duty for Fiscal Monitoring of OilActivities | A rate of 0.003% is applied to the value of extracted production of crude oil and natural gas for the year. | |
Extraordinary Duty on Crude Oil Exports | A rate of 13.1% is applied to the value resulting from the multiplication of the difference between the annual weighted average price of the Mexican barrel of crude oil over the budgeted crude oil price times the annual export volume. The budgeted crude oil price for 2006 was U.S.$36.50 and for 2007 is U.S.$42.80 per barrel. | |
Additional Duty | This duty is applied if and only if annual crude oil production is below target production from 2006 to 2008, according to a formula based on the difference between target production and the actual crude oil production. If the target production cannot be reached by reason of force majeure, act of God or energy policy, this duty will not be paid. | |
Excess Gains Revenue Duty | This duty equals 6.5% of the revenues from crude oil export sales when the weighted average price of crude oil exceeds the threshold crude oil price set for the year, which in 2006 was U.S.$36.50 per barrel. This duty was credited against the Hydrocarbon Duty for the Oil Revenues Stabilization Fund and, if necessary, against the Ordinary Hydrocarbons Duty. | |
In 2007, the excess gains revenue duty was revoked. |
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Hydrocarbon Income Tax | This tax is equivalent to the regular income tax applied to all Mexican corporations, a tax to which Petróleos Mexicanos and its subsidiary entities are not subject. A tax rate of 30% is applied to net income, as determined in accordance with the Federal Revenue Law for the applicable fiscal year and the applicable provisions of theLey del Impuesto sobre la Renta(Income Tax Law). | |
IEPS Tax | The Special Tax on Production and Services (which we refer to as the IEPS Tax) is an indirect tax on domestic sales of gasoline and diesel that Pemex-Refining collects on behalf of the Mexican Government. The IEPS Tax on the sale of gasoline and diesel is equivalent to the difference between the international reference price of each product (adjusted by freight costs and quality factors) and the retail price of the product (not including value added tax, the retailers’ margin and freight costs). Thus, the Mexican Government ensures that we retain an amount reflecting the international prices (adjusted as described above) of these products, while the Mexican Government collects the difference between the international prices and the prices at which these products are sold in Mexico. | |
Since 2005, as a result of the new rules to calculate this tax rate, the rates have become negative. The Federal Revenue Law for the Fiscal Year of 2006 determined that the amounts resulting from IEPS negative taxes could be credited against the IEPS tax liability, and, if in excess, can be credited against the value added tax. Any remaining amount can be credited against the Ordinary Hydrocarbons Duty. |
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• | 50% for capital expenditures in exploration, production, refining, gas and petrochemical activities of Petróleos Mexicanos and the subsidiary entities; and | |
• | 50% for expenditures of infrastructure and equipment programs and investment projects carried out by the Mexican states. |
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Senate | Chamber of Deputies | |||||||||||||||
Seats | % of Total | Seats | % of Total | |||||||||||||
National Action Party | 52 | 40.6 | 206 | 41.2 | ||||||||||||
Institutional Revolutionary Party | 33 | 25.8 | 106 | 21.2 | ||||||||||||
Democratic Revolution Party | 26 | 20.3 | 127 | 25.4 | ||||||||||||
Ecological Green Party of Mexico | 6 | 4.7 | 17 | 3.4 | ||||||||||||
Convergence for Democracy | 5 | 3.9 | 17 | 3.4 | ||||||||||||
Labor Party | 5 | 3.9 | 11 | 2.2 | ||||||||||||
New Alliance | 0 | 0.0 | 9 | 1.8 | ||||||||||||
Alternative | 0 | 0.0 | 5 | 1.0 | ||||||||||||
Independent | 1 | 0.8 | 2 | 0.4 | ||||||||||||
Total | 128 | 100.0 | % | 500 | 100.0 | % | ||||||||||
• | guarantee national security, as well as safeguard national peace, territorial integrity, independence, and sovereignty, and to ensure the continued viability of the State and its democracy; | |
• | guarantee full enjoyment of the Rule of Law, fortifying the institutional framework and strengthening a culture of respect for the law; | |
• | achieve sustained economic growth at a higher rate than in the past several years, and increase employment in the formal sector; | |
• | promote a competitive economy that offers quality goods and services at affordable prices; | |
• | reduce extreme poverty, assuring equality of opportunity for all Mexicans to improve their quality of life and access to basic services; |
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• | reduce significantly the persistent social, economic and cultural gaps among the population; | |
• | guarantee that Mexicans have effective opportunities to exercise their rights as citizens, as well as to participate actively in the political, cultural, economic and social lives of their communities and nation; | |
• | ensure environmental sustainability; | |
• | consolidate a democratic regime; and | |
• | utilize the benefits of a globalized world to spur national development, while also promoting Mexico’s interests worldwide. |
• | improve the quality of the educational system, making it relevant at all levels to employment, and extending access to education to a greater percentage of the population; | |
• | promote economic growth, competitiveness of the economy, and strengthening of the State’s tax collections in order to provide social programs for human development; | |
• | strengthen government institutions through viable and responsible citizen participation that reaches all public affairs, and involves diverse forms of social and political organization; | |
• | observe policies aimed at political transparency and accountability; | |
• | promote policies contributing to the strengthening of families in matters of health, education, housing, culture and recreation; and | |
• | change Mexico’s environmental culture in order to conserve national resources. |
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First three | ||||||||||||||||||||||||
months | ||||||||||||||||||||||||
2002 | 2003(1) | 2004(1) | 2005(1) | 2006(1) | of 2007(1)(2) | |||||||||||||||||||
GDP (constant 1993 prices) | 0.8 | % | 1.4 | % | 4.2 | % | 3.0 | % | 4.8 | % | 2.6 | % | ||||||||||||
Transportation, storage and communications | 1.8 | 5.0 | 9.2 | 7.1 | 9.1 | 7.6 | ||||||||||||||||||
Electricity, gas and water | 1.0 | 1.5 | 2.8 | 1.4 | 5.0 | 5.3 | ||||||||||||||||||
Financial services, insurance and real estate | 4.2 | 3.9 | 3.9 | 5.8 | 5.4 | 4.9 | ||||||||||||||||||
Community, social and personal services | 0.9 | (0.6 | ) | 0.6 | 2.1 | 2.8 | 2.1 | |||||||||||||||||
Construction | 2.1 | 3.3 | 6.1 | 3.3 | 6.9 | 2.1 | ||||||||||||||||||
Commerce, hotels and restaurants | 0.0 | 1.5 | 5.5 | 3.1 | 3.7 | 1.6 | ||||||||||||||||||
Mining, petroleum and gas | 0.4 | 3.7 | 3.4 | 1.2 | 2.2 | 0.3 | ||||||||||||||||||
Agriculture, livestock, fishing and forestry | 0.1 | 3.1 | 3.5 | (1.5 | ) | 4.8 | 0.2 | |||||||||||||||||
Manufacturing | (0.7 | ) | (1.3 | ) | 4.0 | 1.2 | 4.7 | (0.1 | ) |
(1) | Preliminary. | |
(2) | First three months of 2007 results as compared to the same period of 2006. |
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• | inflation objectives; | |
• | a reference guideline for the analysis of the economic situation and inflationary pressures; | |
• | a framework for the monetary instruments to be used by the Central Bank to achieve its objectives; and | |
• | a plan for regular communication with the public that promotes the transparency, credibility and effectiveness of monetary policy. |
• | inflation objectives; | |
• | a reference guideline for the analysis of the economic situation and inflationary pressures; |
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• | a framework for the monetary instruments to be used by the Central Bank to achieve its objectives; and | |
• | a plan for regular communication with the public that promotes the transparency, credibility and effectiveness of monetary policy. |
• | enhance corporate governance by (1) expanding minority shareholders’ rights, (2) introducing independent board members and (3) requiring an audit committee of the board of directors; | |
• | improve the framework for banking operations by (1) providing adequate regulation regarding the provision of banking services using new technologies, (2) allowing banks to offer additional services and (3) setting a new framework for related operations; and | |
• | strengthen regulation and surveillance while reducing their cost by (1) introducing prompt corrective actions based on banks’ capitalization levels, (2) defining responsibilities and activities of the various financial authorities and (3) expanding the role of external auditors. |
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• | maintain at 20% the amount of deferred taxes arising from fiscal losses that may be included as Tier 1 capital; | |
• | include all new issuances of subordinated convertible debt as Tier 2 capital. Outstanding subordinated mandatorily convertible debt, subject to current limitations, will remain as Tier 1 capital until its maturity or conversion; | |
• | exclude investments in non-financial companies and companies whose shares are not traded on the Mexican Stock Exchange from Tier 1 capital, except where those investments result from the capitalization of restructured loans; and | |
• | exclude from Tier 2 capital certain specific assets, including credit card debt, mortgages and commercial loans, and establish general loan loss reserves for these types of assets. |
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• | strengthening economic activity and exports; | |
• | maintaining an adequate surplus in the Mexican Government’s primary balance while incurring only a moderate public sector deficit; |
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• | continuing the promotion of fiscal federalism; and | |
• | increasing the efficiency and competitiveness of the economy and the effectiveness of the tax collection system. |
• | significantly reducing the inflation rate to levels approximating those of Mexico’s major trading partners; | |
• | consolidating the process of sustainable economic growth; | |
• | promoting private sector savings; | |
• | continuing to modernize the economy; and | |
• | strengthening social policy through increased real spending on social development. |
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2006 Revised Budget Assumptions and Targets;
2007 Budget Assumptions and Targets
2006 | ||||||||||||||||
2005 Results | 2006 Budget | Results | 2007 Budget | |||||||||||||
Real GDP growth(%) | 3.0 | (1) | 3.6 | 4.8 | (1) | 3.6 | ||||||||||
Increase in the national consumer price index(%) | 3.3 | 3.0 | 4.0 | 3.0 | ||||||||||||
Average export price of Mexican oil mix (U.S.$/barrel) | 42.69 | 36.50 | 53.20 | 42.80 | ||||||||||||
Current account deficit as % of GDP | 0.6 | (1) | 2.2 | 0.3 | (1) | 2.3 | ||||||||||
Average exchange rate (Ps./$1.00) | 10.9 | 11.4 | 10.9 | 11.2 | ||||||||||||
Average rate on28-dayCetes(%) | 9.2 | 8.9 | 7.2 | 6.8 | ||||||||||||
Public sector balance as % of GDP | (0.1 | )(1) | (0.0 | ) | 0.3 | (1) | (0.0 | ) | ||||||||
Primary balance as% of GDP | 2.4 | (1) | N/A | 2.8 | (1) | 2.7 |
(1) | Preliminary. |
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• | increased use of long-term fixed rate contracts; | |
• | the issuance of long-term peso-denominated securities by Mexican companies; | |
• | the development of long-term financial hedging products; and | |
• | the potential to direct long-term savings toward the financing of long-term investment projects. |
December 31, | April 30 | |||||||||||||||||||||||||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006(2) | 2007 | |||||||||||||||||||||||||||||||||||||||||||
(in billions of pesos, except percentages) | ||||||||||||||||||||||||||||||||||||||||||||||||
Gross Debt | ||||||||||||||||||||||||||||||||||||||||||||||||
Government Securities | Ps. | 793.8 | 87.5 | % | Ps. | 956.7 | 94.5 | % | Ps. | 1,039.3 | 94.6 | % | Ps. | 1,173.3 | 94.5 | % | Ps. | 1,569.9 | 93.9 | % | Ps. | 1,640.3 | 94.0 | % | ||||||||||||||||||||||||
Cetes | 192.1 | 21.2 | 206.4 | 20.4 | 241.5 | 22.0 | 288.2 | 23.2 | 346.0 | 20.7 | 347.1 | 19.9 | ||||||||||||||||||||||||||||||||||||
Floating-Rate Bonds | 305.3 | 33.6 | 354.7 | 35.1 | 310.5 | 28.2 | 287.6 | 23.2 | 359.6 | 21.5 | 351.7 | 20.2 | ||||||||||||||||||||||||||||||||||||
Inflation-Linked Bonds | 92.7 | 10.2 | 83.9 | 8.3 | 84.6 | 7.7 | 95.3 | 7.7 | 155.3 | 9.3 | 180.6 | 10.4 | ||||||||||||||||||||||||||||||||||||
Fixed-Rate Bonds | 203.7 | 22.4 | 311.7 | 30.8 | 402.7 | 36.6 | 502.2 | 40.4 | 709.0 | 42.4 | 760.9 | 43.6 | ||||||||||||||||||||||||||||||||||||
Other | 113.6 | 12.5 | 55.2 | 5.5 | 59.9 | 5.4 | 68.8 | 5.5 | 102.9 | 6.1 | 104.5 | 6.0 | ||||||||||||||||||||||||||||||||||||
Total Gross Debt | Ps. | 907.4 | 100.0 | % | Ps 1,011.9 | 100.0 | % | Ps. | 1,099.2 | 100.0 | % | Ps. | 1,242.2 | 100.0 | % | Ps. | 1,672.8 | 100.0 | % | Ps. | 1,744.8 | 100.0 | % | |||||||||||||||||||||||||
Net Debt | ||||||||||||||||||||||||||||||||||||||||||||||||
Financial Assets(3) | (86.1 | ) | (84.8 | ) | (69.2 | ) | (58.8 | ) | (125.7 | ) | (197.1 | ) | ||||||||||||||||||||||||||||||||||||
Total Net Debt | Ps. | 821.3 | Ps. | 927.1 | Ps. | 1,030.0 | Ps. | 1,183.3 | Ps. | 1,547.1 | Ps. | 1,482.7 | ||||||||||||||||||||||||||||||||||||
Gross Debt/GDP | 13.6 | % | 13.9 | % | 13.2 | % | 13.8 | % | 17.8 | % | 18.1 | % | ||||||||||||||||||||||||||||||||||||
Net Debt/GDP | 12.3 | % | 12.7 | % | 12.4 | % | 13.2 | % | 16.5 | % | 16.0 | % |
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(1) | Internal debt figures do not include securities sold by Banco de México in open-market operations pursuant toRegulación Monetaria, which amounted to approximately Ps. 111.8 billion at December 29, 2006.Regulación Monetariadoes not increase the Government’s overall level of internal debt, because Banco de México must reimburse the Government for any allocated debt that Banco de México sells into the secondary market and that is presented to the Government for payment. If Banco de México undertakes extensive sales of allocated debt in the secondary market, however,Regulación Monetariacan result in a situation in which the level of outstanding internal debt is higher than the Government’s figure for net internal debt. | |
(2) | Preliminary. | |
(3) | Includes the net balance denominated in pesos of the General Account of the Federal Treasury with Banco de México. |
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By Type
Long-Term | Other | |||||||||||||||||||||||
Long-Term | Debt of | Long- | Total | |||||||||||||||||||||
Direct Debt of | Budget | Term | Long- | Total Long- | ||||||||||||||||||||
the Federal | Controlled | Public | Term | Total Short- | and Short- | |||||||||||||||||||
Government | Agencies | Debt(2) | Debt | Term Debt | Term Debt | |||||||||||||||||||
(in millions of dollars) | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2002 | 43,554 | 10,630 | 21,845 | 76,029 | 2,789 | 78,818 | ||||||||||||||||||
2003 | 44,898 | 11,190 | 21,248 | 77,336 | 1,688 | 79,024 | ||||||||||||||||||
2004 | 48,561 | 10,636 | 17,952 | 77,149 | 2,077 | 79,226 | ||||||||||||||||||
2005 | 48,689 | 6,736 | 15,464 | 70,889 | 786 | 71,675 | ||||||||||||||||||
2006(4) | 39,330 | 7,046 | 7,545 | 53,921 | 845 | 54,766 | ||||||||||||||||||
March 31, 2007(4) | 38,605 | 8,858 | 7,299 | 54,762 | 3,912 | 58,674 |
December 31, | March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006(4) | 2007(4) | |||||||||||||||||||||||||||||||||||||||||||
(in | (in | (in | (in | (in | (in | |||||||||||||||||||||||||||||||||||||||||||
millions | millions | millions | millions | millions | millions | |||||||||||||||||||||||||||||||||||||||||||
of $) | (%) | of $) | (%) | of $) | (%) | of $) | (%) | of $) | (%) | of $) | (%) | |||||||||||||||||||||||||||||||||||||
U.S. Dollars | 69,804 | 88.6 | 70,519 | 89.2 | 71,220 | 89.9 | 65,480 | 91.4 | 50,760 | 92.7 | 47,379 | 80.7 | ||||||||||||||||||||||||||||||||||||
Japanese Yen | 3,849 | 4.9 | 4,013 | 5.1 | 2,937 | 3.7 | 1,990 | 2.8 | 1,006 | 1.8 | 1,084 | 1.8 | ||||||||||||||||||||||||||||||||||||
Pounds Sterling | 156 | 0.2 | 173 | 0.2 | 186 | 0.2 | 80 | 0.1 | 91 | 0.2 | 1,030 | 1.8 | ||||||||||||||||||||||||||||||||||||
Swiss Francs | 173 | 0.2 | 184 | 0.2 | 236 | 0.3 | 171 | 0.2 | 175 | 0.3 | 410 | 0.7 | ||||||||||||||||||||||||||||||||||||
Others | 4,836 | 6.1 | 4,135 | 5.3 | 4,647 | 5.9 | 3,954 | 5.5 | 2,734 | 5.0 | 8,771 | 14.9 | ||||||||||||||||||||||||||||||||||||
Total | 78,818 | 100.0 | 79,024 | 100.0 | 79,226 | 100.0 | 71,675 | 100.0 | 54,766 | 100.0 | 58,674 | 100.0 | ||||||||||||||||||||||||||||||||||||
(1) | External debt denominated in foreign currencies other than dollars has been translated into dollars at exchange rates as of each of the dates indicated. External public debt does not include (a) repurchase obligations of Banco de México with the IMF (none of these were outstanding at March 31, 2007), (b) external borrowings by the public sector after March 31, 2007 and (c) loans from the Commodity Credit Corporation to public sector Mexican banks. External debt is presented herein on a “gross” basis, and includes external obligations of the public sector at their full outstanding face or principal amount. For certain informational and statistical purposes, Mexico sometimes reports its external public sector debt on a “net” or “economic” basis, which is calculated as the gross debt net of certain financial assets held abroad. These financial assets include the value of principal and interest collateral on restructured debt and Mexican public sector external debt that is held by public sector entities but that has not been canceled. | |
(2) | Includes debt of development banks and other administratively controlled agencies whose finances are consolidated with the Mexican Government. | |
(3) | Adjusted to reflect the effect of currency swaps. | |
(4) | Preliminary. |
• | On January 29, 2007, Mexico concluded an exchange and cash tender offer for certain series of its outstanding U.S. dollar-denominated bonds. The international offer invited |
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the holders of five series of Mexico’s external bonds maturing in 2019, 2022, 2026, 2031 and 2033 to submit offers, in a modified Dutch auction, to exchange their bonds for reopened 6.75% Global Notes due 2034 plus a cash payment, or to sell their bonds for cash. Following settlement, approximately $2.8 billion of outstanding bonds including Mexico’s 8.125% Global Bonds due 2019, 8.00% Global Notes due 2022, 11.50% Global Bonds due May 15, 2026, 8.30% Global Notes due 2031 and 7.500% Global Notes due 2033 were cancelled. An aggregate principal amount of U.S. $2,266,566,000 in reopened 6.75% Global Notes due 2034 was issued to holders participating in the exchange, and Mexico also made cash payments from available funds totaling approximately U.S. $1,067,637,570. Following the cancellation of the bonds tendered and accepted for exchange or purchase by Mexico, approximately U.S. $1,703,447,000 principal amount of 8.125% Global Bonds due 2019, U.S. $753,456,000 principal amount of 8.00% Global Notes due 2022, U.S. $338,580,000 principal amount of 11.50% Global Bonds due May 15, 2026, U.S. $1,878,333,000 principal amount of 8.30% Global Notes due 2031 and U.S. $1,315,425,000 principal amount of 7.500% Global Notes due 2033 remained outstanding. |
• | On March 21, 2007, Mexico issued 500,000 Series XWE07 Warrants and 1,000,000 XWD07 Units, each Unit consisting of one Series XWDA07 Warrant and one Series XWDB07 Warrant, which will trade separately after September 24, 2007. The Series XWE07, XWDA07 and XWDB07 Warrants entitle the holders to exchange, on September 19, October 11, and November 7, 2007, respectively, up to approximately $2.7 billion of various series of outstanding U.S. dollar, euro, Italian lira and Deutsche mark-denominated bonds issued by Mexico for peso-denominated bonds issued by the Mexican Government maturing in either 2014 or 2024. |
Item 5. | Operating and Financial Review and Prospects |
• | export sales, which consist of sales of crude oil and condensates, refined products and petrochemical products; | |
• | domestic sales, which consist of sales of natural gas, refined products (such as gasoline, diesel fuel and liquefied petroleum gas) and petrochemical products; and | |
• | other sources, including financial and investment income. |
• | costs of sales, including the cost of purchases of refined petroleum and other products, depreciation and amortization, a portion of the cost of the reserve for labor obligations, the variation of inventories, maintenance, and exploration and non-successful drilling expenses; | |
• | distribution expenses (including a portion of the cost of the reserve for labor obligations); | |
• | administrative expenses (including a portion of the cost of the reserve for labor obligations); and | |
• | interest expense. |
• | changes in international prices of crude oil and refined petroleum products, which are denominated in U.S. dollars, and domestic prices of petroleum products, which are denominated in pesos; | |
• | the type and volume of crude oil produced and exported; | |
• | the type and volume of natural gas produced and sold; |
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• | the results of development and exploration activities; | |
• | the amount of taxes and duties that the Mexican Government imposes on us; | |
• | Mexican inflation; | |
• | fluctuations in the peso-U.S. dollar exchange rate; and | |
• | Mexican and global economic conditions, including the levels of international interest rates. |
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• | the magnitude of the change in crude oil prices; | |
• | how quickly petroleum and petrochemical product prices in international markets adjust to reflect changes in crude oil prices; and | |
• | the extent to which prices in Mexico, where we sell most of our petroleum products and petrochemicals, reflect international prices for those products. |
Year Ended December 31, | ||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||
(in dollars per barrel) | ||||||||||||||||||||
West Texas Intermediate crude oil average price | $ | 26.16 | $ | 31.10 | $ | 41.49 | $ | 56.59 | $ | 66.04 | ||||||||||
PEMEX crude oil weighted average export price | 21.52 | 24.78 | 31.05 | 42.71 | 53.04 |
Note: | The numbers in this table are average prices for the full year. Spot prices at year end are different. On June 29, 2007, the spot price for West Texas Intermediate crude oil was U.S. $70.33 per barrel and the spot price for the PEMEX crude oil basket was an estimated U.S. $61.60 per barrel. |
Sources: | PMI operating statistics, which are based on information in bills of lading, and Platt’s U.S. Market Scan (McGraw-Hill Company). |
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2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||||||||||||||||||||||
Mexico | U.S. | Mexico | U.S. | Mexico | U.S. | Mexico | U.S. | Mexico | U.S. | |||||||||||||||||||||||||||||||
Oil Products | ||||||||||||||||||||||||||||||||||||||||
Unleaded regular gasoline(1) | $ | 94.70 | $ | 53.92 | $ | 87.79 | $ | 60.94 | $ | 86.48 | $ | 72.39 | $ | 92.45 | $ | 92.42 | $ | 96.46 | $ | 104.10 | ||||||||||||||||||||
Premium gasoline(1) | 106.32 | 61.68 | 98.55 | 68.78 | 101.17 | 80.38 | 109.31 | 100.67 | 114.64 | 112.62 | ||||||||||||||||||||||||||||||
Jet fuel(2) | 30.11 | 28.96 | 36.30 | 34.87 | 47.92 | 48.49 | 71.69 | 72.04 | 81.31 | 80.91 | ||||||||||||||||||||||||||||||
Kerosene(3) | 78.50 | 30.23 | 72.80 | 36.68 | 71.72 | 50.76 | 76.55 | 72.87 | 79.37 | 83.81 | ||||||||||||||||||||||||||||||
Natural Gas(4) | ||||||||||||||||||||||||||||||||||||||||
Industrial | 3.15 | 3.99 | 5.31 | 5.81 | 6.09 | 6.41 | 7.88 | 8.58 | 6.67 | 7.83 | ||||||||||||||||||||||||||||||
Residential | 5.65 | 8.45 | 7.62 | 10.63 | 9.58 | 12.03 | 11.75 | 14.78 | 11.22 | 13.99 | ||||||||||||||||||||||||||||||
Selected Petrochemicals | ||||||||||||||||||||||||||||||||||||||||
Ammonia(5) | 133.74 | 127.47 | 237.03 | 205.36 | 272.48 | 250.68 | 324.26 | 288.87 | 305.53 | 282.16 | ||||||||||||||||||||||||||||||
Polyethylene L.D.(6) | 735.36 | 1,013.47 | 948.07 | 1,286.82 | 1,221.15 | 1,504.37 | 1,542.75 | 1,510.54 | 1,504.40 | 1,509.98 | ||||||||||||||||||||||||||||||
Polyethylene H.D.(7) | 699.51 | 947.90 | 824.85 | 1,187.97 | 978.44 | 1,364.33 | 1,352.19 | 1,552.94 | 1,504.53 | 1,463.60 | ||||||||||||||||||||||||||||||
Styrene(8) | 757.67 | 701.30 | 885.89 | 873.94 | 1,297.79 | 1,231.44 | 1,419.03 | 1,360.48 | 1,475.00 | 1,358.50 |
(1) | In U.S. dollars per barrel. Prices to final consumers including taxes. Premium price in Mexico City. U.S. prices for Houston, Texas. | |
Sources: Pemex-Refining and Lundberg Retail Price Survey (Lundberg Survey Inc.). | ||
(2) | In U.S. dollars per barrel. Mexican prices at the gate of the refineries. U.S. spot prices in Houston, Texas (Jet Fuel Gulf Coast Waterborne). | |
Sources: Pemex-Refining and Platt’s U.S. Market Scan (McGraw-Hill Company). | ||
(3) | In U.S. dollars per barrel. In both countries, prices to final consumers. Mexico prices include taxes, while U.S. prices exclude them. | |
Sources: Pemex-Refining and Petroleum Marketing Monthly published by the Energy Information Administration (DOE) (Kerosene Type Jet Fuel, end users). |
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(4) | In U.S. dollars per thousand cubic feet. Prices exclude taxes. Industrial natural gas prices are for Mexico City and surrounding areas. Industrial prices correspond to nomination of additional volumes under contract with notification to the supplier. Until 2003, residential prices were nationally weighted and since 2004, residential prices are for the sector to which Mexico City belongs. Residential prices reflect the specific cost of transportation and distribution in that area. U.S. prices are national average industrial prices and Texas residential prices. | |
Sources: Pemex-Gas and Basic Petrochemicals, Energy Regulatory Commission and Petroleum Marketing Monthly published by the Energy Information Administration (DOE). | ||
(5) | In U.S. dollars per ton. Prices exclude taxes. Mexico prices to contract users at Cosoleacaque petrochemical plant. U.S. spot prices in Tampa, Florida. | |
Sources: Pemex-Petrochemicals, Fertecon Weekly Ammonia Fax (Fertecon Limited) and Fertilizer Market Bulletin (FMB Consultants Ltd.). | ||
(6) | In U.S. dollars per ton. LPDE film quality. Prices exclude taxes. Mexico prices to spot consumers. U.S. prices are domestic contract average. | |
Sources: Pemex-Petrochemicals and ICIS-LOR (Icis-Lor Group Ltd.). | ||
(7) | In U.S. dollars per ton. Block molding quality. Prices exclude taxes. Mexico prices to spot consumers. U.S. prices are domestic contract average. | |
Sources: Pemex-Petrochemicals and ICIS-LOR (Icis-Lor Group Ltd.). | ||
(8) | In U.S. dollars per ton. Prices exclude taxes. Mexico prices to spot consumers. U.S. prices are average of contract and spot prices. | |
Sources: Pemex-Petrochemicals and ICIS-LOR (Icis-Lor Group Ltd.). |
Year ended December 31,(1) | ||||||||||||
2004 | 2005 | 2006 | ||||||||||
(in millions of constant pesos as of | ||||||||||||
December 31, 2006) | ||||||||||||
Taxes and duties: | ||||||||||||
Hydrocarbon extraction duties and others | Ps. 412,208 | Ps. 518,571 | Ps. 565,754 | |||||||||
Excess gains duties | 36,980 | 58,665 | 7,926 | |||||||||
Hydrocarbon income tax | — | 2,058 | 4,737 | |||||||||
Income tax | 2,001 | 3,837 | 4,438 | |||||||||
Special tax on production and services(2) | 58,819 | 21,033 | — | |||||||||
Total | Ps. 510,009 | Ps. 604,164 | Ps. 582,855 | |||||||||
(1) | The amounts are expressed in millions of constant pesos as of December 31, 2006, and do not represent the amount in nominal terms effectively paid to the corresponding tax authorities. | |
(2) | During 2006, no IEPS tax was generated due to negative IEPS tax rates, as explained below. |
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• | Each year, we adjust the value of certain of our fixed assets, materials and spare parts on our balance sheet to reflect the effects of inflation. This revaluation will increase our assets in periods of high inflation. When we revalue fixed assets and inventories to reflect |
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the effects of inflation, our subsequent depreciation and cost of sales charges will increase, reducing our income. The higher carrying value further exposes us to subsequent impairment charges. Beginning in 2003, we revalue all of our fixed assets using the NCPI. See Note 2h. to our consolidated financial statements. |
• | Mexican FRS requires that financial statements recognize the effects of inflation in accordance withBulletin B-10. A component of inflation accounting which is not reflected in historical based accounting is the recognition of a gain or loss on monetary position, which is included in the income statement as a component of comprehensive financing cost. The gain or loss on monetary position captures the impact of purchasing power fluctuations on monetary assets and liabilities. To the extent that we have a net monetary liability position, the income statement will reflect a monetary gain as measured by the change in the NCPI. To the extent that we have a net monetary asset position, the income statement will reflect a monetary loss as measured by the change in the NCPI. |
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• | The peso depreciated against the U.S. dollar at a rate of 1.0% during 2006, as compared to a 4.3% appreciation of the peso against the U.S. dollar in 2005, which resulted in net foreign exchange losses of Ps. 2.4 billion in 2006, as compared to net foreign exchange gains of Ps. 18.3 billion in 2005. The depreciation in 2006 was due mainly to change in the exchange rate of pesos to U.S. dollars, which rose to Ps. 10.8810 per dollar at December 31, 2006 from Ps. 10.7777 per dollar at December 31, 2005. At December 31, 2005, the rate had dropped to Ps. 10.7777 per dollar from Ps. 11.2648 per dollar in 2004. | |
• | Although the inflation rate rose from 3.33% in 2005 to 4.05% in 2006, our net monetary liabilities decreased by 18.3% (because our monetary assets increased in comparison to our monetary liabilities), resulting in a net gain in monetary position of Ps. 14.3 billion, 16.5% lower than the net gain in monetary position in 2005 of Ps. 17.0 billion. | |
• | These increases in comprehensive financing cost were partially offset by a decrease in net interest expense of Ps. 5.1 billion, or 12.8%, from Ps. 40.0 billion in 2005 to Ps. 34.9 billion in 2006. In 2006, interest expense decreased by Ps. 10.6 billion as compared to 2005, while interest income decreased by Ps. 5.5 billion as compared to 2005. |
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• | The peso appreciated against the U.S. dollar at a rate of 4.32% during 2005, as compared to a 0.26% depreciation of the peso against the U.S. dollar in 2004, which resulted in net foreign exchange gains of Ps. 18.3 billion in 2005, as compared to net foreign exchange losses of Ps. 3.7 billion in 2004. | |
• | The inflation rate decreased from 5.2% in 2004 to 3.3% in 2005, resulting in a net gain in monetary position of Ps. 17.0 billion, 19.0% lower than the net gain in monetary position in 2004 of Ps. 21.0 billion. | |
• | These decreases in comprehensive financing cost were partially offset by an increase in net interest expense of Ps. 15.1 billion, or 60.6%, from Ps. 24.9 billion in 2004 to Ps. 40.0 billion in 2005. In 2005, interest expense increased by Ps. 20.9 billion as compared to 2004, while interest income increased by Ps. 5.8 billion as compared to 2004. As of July 1, 2005, interest from Pemex Finance, Ltd. is consolidated into our total debt for both U.S. and Mexican FRS purposes. |
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Year Ended December 31, | ||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||
(in millions of constant pesos as of December 31, 2006) | ||||||||||||||||||||
Total advance payments to the Mexican Government | Ps. | 11,421 | Ps. | 11,508 | Ps. | 11,169 | Ps. | 15,903 | Ps. | 259 | ||||||||||
Dividends declared in respect of Certificates of Contribution “A”(1) | 2,625 | 11,290 | 11,169 | 11,067 | 15,799 |
(1) | In each of the five years ended December 31, 2006, the dividends were approved by the Board of Directors of Petróleos Mexicanos. |
(in millions of | ||||
nominal pesos) | ||||
Excess Gains Duty, in accordance with the Federal Expenditures Budget for the Fiscal Year of 2005 | Ps. 22,067 | |||
Other payments pursuant to the Federal Expenditures Budget for the Fiscal Year of 2005 | 22,163 | |||
Increase in equity | Ps. 44,230 | |||
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• | cash flow generated from operations; | |
• | the issuance ofcertificados bursátiles (peso-denominated publicly-traded notes) in the domestic market; | |
• | the issuance of other debt securities in the international capital markets; | |
• | the renewal of existing and the entering into of new lines of credit from international and local commercial banks; and | |
• | other additional financing activities. |
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• | On February 2, 2007, Pemex Project Funding Master Trust issued through an inter-company private placement U.S. $2,000,000,000 of its Floating Rate Notes due in 2012; the notes were issued under the Pemex Project Funding Master Trust’s Medium-Term Note Program, Series A, and were re-openings of earlier issuances; all of the notes were purchased by Petróleos Mexicanos; | |
• | on March 16, 2007, the Pemex Project Funding Master Trust issued through an inter-company private placement U.S. $2,500,000,000 of Floating Rate Notes due in 2016, under its Medium-Term Note Program, Series A; all of the notes were purchased by Petróleos Mexicanos; and | |
• | on May 4, 2007, the Pemex Project Funding Master Trust issued through an inter-company private placement U.S. $1,500,000,000 of Floating Rate Notes due in 2014, under its Medium-Term Note Program, Series A; all of the notes were purchased by Petróleos Mexicanos. | |
• | on June 22, 2007, the Pemex Project Funding Master Trust issued through an inter-company private placement U.S.$2,000,000,000 of Floating Rate Notes due in 2020, under its Medium-Term Note Program Series A; all of the notes were purchased by Petróleos Mexicanos. |
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Aggregate Principal | ||||||||||||||
Amount | ||||||||||||||
Aggregate Principal | Repurchased in | Aggregate Principal | ||||||||||||
Amount Outstanding | Open Market | Amount Outstanding | ||||||||||||
Title of Purchased Securities | ISIN | before Repurchases | Transactions | after Repurchases | ||||||||||
8.50% Notes due 2008 | US706451AA95 | U.S. $ | 984,674,000 | U.S. $ | 54,595,000 | U.S. $ | 930,079,000 | |||||||
6.125% Notes due 2008 | US70645KAK51 | 33,742,000 | 9,911,000 | 23,831,000 | ||||||||||
6.125% Notes due 2008 | US706451AM34 | 716,258,000 | 6,414,000 | 709,844,000 | ||||||||||
9.375% Notes due 2008 | US706451BA86 | 487,600,000 | 18,999,000 | 468,601,000 | ||||||||||
7.875% Notes due 2009 | US706451AE18 | 995,449,000 | 87,846,000 | 907,603,000 | ||||||||||
Floating Rate Notes due 2009 | USU70577AG35 | 424,550,000 | 40,000,000 | 384,550,000 | ||||||||||
Floating Rate Notes due 2010 | USU70577AJ73 | 847,676,000 | 95,505,000 | 752,171,000 | ||||||||||
Floating Rate Notes due 2010 | US706451AP64 | 652,324,000 | 8,000,000 | 644,324,000 | ||||||||||
9.125% Notes due 2010 | US706451AB78 | 998,206,000 | 70,382,000 | 927,824,000 | ||||||||||
8.00% Notes due 2011 | US706451AF82 | 743,614,000 | 12,566,000 | 731,048,000 | ||||||||||
Floating Rate Notes due 2012 | US70645KAR05 | 496,410,000 | 62,859,000 | 433,551,000 | ||||||||||
7.375% Notes due 2014 | US706451AH49 | 1,747,650,000 | 196,591,000 | 1,551,059,000 | ||||||||||
5.75% Notes due 2015 | US706451BF73 | 1,749,457,000 | 28,510,000 | 1,720,947,000 | ||||||||||
9.25% Notes due 2018 | US706451BB69 | 339,915,000 | 5,000,000 | 334,915,000 | ||||||||||
8.625% Notes due 2022 | US706451AG65 | 969,990,000 | 215,756,000 | 754,234,000 | ||||||||||
9.50% Notes due 2027 | US706451BD26 | 790,497,000 | 217,164,000 | 573,333,000 | ||||||||||
7.75% Perpetual Notes | XS0201926663 | 1,750,000,000 | 9,598,000 | 1,740,402,000 |
• | on January 4, 2006, Petróleos Mexicanos borrowed U.S. $800,000,000 under its U.S. $1.25 billion syndicated revolving facility entered into on July 15, 2005 with a group of international financial institutions; under this agreement, borrowings may be made by either the Pemex Project Funding Master Trust or Petróleos Mexicanos; the facility matures in 2010; this borrowing was made in two tranches, A and B, each in the amount of U.S. $400,000,000; both tranches were repaid on February 3, 2006; | |
• | the Pemex Project Funding Master Trust issued U.S. $750,000,000 of its 5.75% Notes due in 2015 and U.S. $750,000,000 of its 6.625% Bonds due 2035 on February 2, 2006; the notes and bonds were issued under the Pemex Project Funding Master Trust’s Medium-Term Note program, Series A, are guaranteed by Petróleos Mexicanos and were re-openings of earlier issuances; | |
• | on February 13, 2006, the Pemex Project Funding Master Trust completed a second exchange of outstanding Petróleos Mexicanos debt securities for new securities issued by the Pemex Project Funding Master Trust, pursuant to which the Pemex Project Funding Master Trust issued U.S. $29,334,000 of its 9.00% Guaranteed Notes due 2007, U.S. $34,289,000 of its 8.85% Guaranteed Notes due 2007, U.S. $54,011,000 of its 93/8% Guaranteed Notes due 2008, U.S. $16,207,000 of its 91/4% Guaranteed Bonds due 2018, U.S. $11,920,000 of its 8.625% Guaranteed Bonds due 2023, U.S. $21,773,000 of its 9.50% |
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Guaranteed Bonds due 2027 and U.S. $17,776,000 of its 9.50% Guaranteed Puttable or Mandatory Exchangeable Securities (“POMESsm”) due 2027, in exchange for an equal principal amount of corresponding 9.00% Guaranteed Notes due 2007, 8.85% Global Guaranteed Notes due 2007, 93/8% Global Guaranteed Notes due 2008, 91/4% Global Guaranteed Bonds due 2018, 8.625% Bonds due 2023, 9.50% Global Guaranteed Bonds due 2027 and 9.50% POMESsm due 2027 (collectively, the “old securities”) issued by Petróleos Mexicanos; the old securities were subsequently acquired by Petróleos Mexicanos from the Pemex Project Funding Master Trust; |
• | the Pemex Project Funding Master Trust entered into a credit agreement in the amount of U.S. $4.25 billion on May 23, 2006 with a group of international financial institutions, to refinance the syndicated facility dated March 22, 2005 with improved financial conditions; this agreement is guaranteed by Petróleos Mexicanos and consists of two separate tranches of U.S. $1.5 billion and U.S. $2.75 billion, which become due in 2011 and 2013, respectively; | |
• | on June 7 and on June 22, 2006, Petróleos Mexicanos borrowed U.S. $250.0 million and U.S. $1.0 billion, respectively, under its U.S. $1.25 billion syndicated revolving facility entered into on July 15, 2005 referred to above; each borrowing was made in two tranches; the U.S. $1.0 billion borrowed on June 22, 2006 was repaid on July 24, 2006; | |
• | on June 7, 2006, Petróleos Mexicanos borrowed the full amount of its U.S. $1.25 billion new syndicated revolving facility, entered into with a group of international financial institutions on May 3, 2006; under this agreement, borrowings may be made by either the Pemex Project Funding Master Trust or Petróleos Mexicanos; this borrowing was repaid on October 6, 2006; | |
• | on June 16, 2006, Fideicomiso F/163 issued a total of Ps. 10 billion in nominal terms of itscertificados bursátiles(publicly-traded notes) guaranteed by Petróleos Mexicanos in the Mexican domestic market; | |
• | on September 22, 2006, the Pemex Project Funding Master Trust borrowed U.S. $1.0 billion under its syndicated revolving facility of U.S. $1,250,000,000 entered into on July 15, 2005. The facility was fully repaid in December 2006; | |
• | on October 31, 2006, the Pemex Project Funding Master Trust reutilized the full amount of its U.S. $1.25 billion syndicated revolving facility entered into with a group of financial institutions on May 3, 2006; the facility was fully repaid in December 2006; | |
• | on December 28, 2006, the Pemex Project Funding Master Trust issued through an inter-company private placement U.S. $1,000,000,000 of Floating Rate Notes due 2011 and U.S. $2,000,000,000 of Floating Rate Notes due 2012; both notes were issued under the Pemex Project Funding Master Trust’s Medium-Term Note Program, Series A, and were purchased by Petróleos Mexicanos; and | |
• | on December 29, 2006, Fideicomiso F/163 issued through an inter-company private placement Ps. 22,000,000,000 of floating rate debt securities due in 2008, which were purchased by Petróleos Mexicanos. |
• | Petróleos Mexicanos obtained loans from export credit agencies totaling U.S. $59.9 million; |
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• | Petróleos Mexicanos issued, under its short-term peso-denominated publicly-traded notes program, a total of Ps. 16.0 billion in nominal terms of notes in the Mexican domestic market, none of which was outstanding as of December 31, 2005; | |
• | on October 26, 2005, Petróleos Mexicanos utilized U.S. $800,000,000 from its U.S. $1.25 billion syndicated revolving facility; this utilization was made in two tranches, A and B, each in the amount of U.S. $400,000,000; both tranches were rolled-over on November 25, 2005 and repaid on December 28, 2005; | |
• | the Pemex Project Funding Master Trust increased the size of its Medium-Term Note program, Series A, from U.S. $11 billion to U.S. $20 billion, and on February 24, 2005, it issued €1 billion of its 5.50% Notes due 2025, guaranteed by Petróleos Mexicanos, under the program; | |
• | the Pemex Project Funding Master Trust entered into a syndicated credit agreement in the amount of U.S. $4.25 billion on March 22, 2005 with a group of international financial institutions to refinance outstanding amounts of certain syndicated facilities and for new PIDIREGAS financing; this agreement was guaranteed by Petróleos Mexicanos and consisted of two separate tranches, which become due in 2010 and 2012, respectively; this agreement was refinanced in May 2006, as discussed under “—2006 Financing Activities” above; | |
• | the Pemex Project Funding Master Trust issued U.S. $1,500,000,000 of notes on June 8, 2005, under its Medium-Term Note Program, Series A, in two tranches: U.S. $1,000,000,000 of 5.75% Notes due in 2015 and U.S. $500,000,000 of 6.625% Bonds due 2035, both guaranteed by Petróleos Mexicanos; | |
• | the Pemex Project Funding Master Trust issued U.S. $175,000,000 of floating rate notes due 2008 on August 31, 2005, bearing interest at a rate per annum equal to LIBOR for a period of one, two, three or six months (at the election of the Pemex Project Funding Master Trust), plus 42.5 basis points, and guaranteed by Petróleos Mexicanos; | |
• | the Pemex Project Funding Master Trust issued U.S. $750,000,000 of floating rate notes due 2012 on December 1, 2005, under its Medium-Term Note Program, Series A, guaranteed by Petróleos Mexicanos and bearing interest at a rate per annum equal to LIBOR plus 60 basis points; | |
• | Fideicomiso F/163 issued a total of Ps. 6 billion in nominal terms of its publicly-traded notes denominated inUnidades de Inversión(Units of Investment, or “UDIs”) in the Mexican domestic market on February 1, 2005, which were guaranteed by Petróleos Mexicanos and were issued in a reopening of an earlier issuance. The value of UDIs are calculated daily by Banco de México based on the National Consumer Price Index; | |
• | Fideicomiso F/163 issued a total of Ps. 15 billion in nominal terms of its publicly-traded notes in the Mexican domestic market on February 11, 2005, guaranteed by Petróleos Mexicanos, consisting of two separate tranches: | |
• | Ps. 7.5 billion of its publicly-traded notes due February 11, 2010, bearing interest at the91-day Cetes (Treasury bill) rate plus 51 basis points; and | |
• | Ps. 7.5 billion of its publicly-traded notes due February 11, 2013, bearing interest at the182-day Cetes rate plus 57 basis points; | |
• | Fideicomiso F/163 issued a total of Ps. 10 billion in nominal terms of its publicly-traded notes in the Mexican domestic market on May 13, 2005, which were guaranteed by |
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Petróleos Mexicanos and were reopenings of previous issuances, consisting of two separate tranches: |
• | Ps. 5,012.6 million of its publicly-traded notes due February 4, 2010, bearing interest at the91-dayCetes(Treasury bill) rate plus 51 basis points; and | |
• | Ps. 4,987.4 million of its publicly-traded notes due January 31, 2013, bearing interest at the182-dayCetesrate plus 57 basis points; |
• | Fideicomiso F/163 issued a total of Ps. 5,000,000,000 in nominal terms of notes due July 15, 2015, in the Mexican domestic market on July 29, 2005, guaranteed by Petróleos Mexicanos, bearing interest at a fixed rate of 9.91%; | |
• | Fideicomiso F/163 issued a total of Ps. 4,500,000,000 in nominal terms of notes due July 16, 2015, guaranteed by Petróleos Mexicanos, in the Mexican domestic market on October 21, 2005, through a reopening of an earlier issue, bearing interest at a fixed rate of 9.91%; and | |
• | Fideicomiso F/163 issued a total of Ps. 5,500,000,000 in nominal terms of notes due October 20, 2011, guaranteed by Petróleos Mexicanos, in the Mexican domestic market on October 21, 2005 at the 91-dayCetes rate plus 35 basis points. |
• | U.S. $54.9 million in respect of direct loans; | |
• | U.S. $151.7 million in respect of credit lines from export credit agencies; | |
• | U.S. $800.0 million in respect of revolving credits; | |
• | U.S. $3.4 billion in respect of bond issues; | |
• | U.S. $38.2 million in respect of restructured debt; and | |
• | U.S. $42.0 million in respect of leases. |
• | U.S. $2.3 billion in respect of foreign trade financing; | |
• | U.S. $660.0 million in respect of project financing; | |
• | U.S. $500.0 million in respect of bond issues; | |
• | U.S. $1.9 billion in respect of financing from commercial banks; and | |
• | U.S. $101.2 million in respect of theConvenio de Derivación de Fondos(Transfer of Funds Agreement) with the Mexican Government. |
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In millions | ||||
of dollars | ||||
Short-term debt | ||||
Lines of credit with variable interest rates established under committed credit facilities with various international commercial banks | U.S. $ | 2,711 | ||
Lines of credit with fixed interest rates | 3,017 | |||
Total short-term debt | 5,728 | |||
Long-term debt | ||||
Instruments with fixed annual interest rates ranging from 3.23% to 10.61% and maturities ranging from 2008 to 2035 | 27,048 | |||
Variable rate instruments | ||||
Drawings under lines of credit based on LIBOR and other variable rates with maturities ranging from 2008 to 2018 | 11,193 | |||
Floating rate notes with maturities ranging from 2008 to 2014 | 8,214 | |||
Total variable rate instruments | 19,407 | |||
Total long-term debt | 46,455 | |||
Total indebtedness(1) | U.S. $ | 52,183 | ||
(1) | Excludes accrued interest and includes notes payable to contractors. |
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In millions | ||||
of dollars | ||||
Pemex Project Funding Master Trust | ||||
Long-term debt | ||||
Instruments with fixed annual interest rates ranging from 3.23% to 10.61% maturities ranging from 2008 to 2035 | U.S. | $20,248 | ||
Drawings under lines of credit based on LIBOR and other variable rates maturities ranging from 2008 to 2018 | 9,878 | |||
Floating rate notes with maturities ranging from 2008 to 2012 | 2,925 | |||
Obligation to Pemex-Exploration and Production in respect of funds allocated to the Pemex Project Funding Master Trust relating to the sale of accounts receivables by PMI to Pemex Finance, Ltd.(1) | 1,491 | |||
Intercompany private placements at fixed rate(2) | 2,000 | |||
Intercompany private placements at variable rate(2) | 1,000 | |||
Short-term debt | ||||
Lines of credit with variable interest rates established under committed credit facilities with various international commercial banks | 970 | |||
Lines of credit with fixed interest rates | 1,515 | |||
Obligation to Pemex-Exploration and Production in respect of funds allocated to the Pemex Project Funding Master Trust relating to the sale of accounts receivables by PMI to Pemex Finance, Ltd.(1) | 377 | |||
Total Pemex Project Funding Master Trust | U.S. | $40,404 | ||
Fideicomiso F/163 | ||||
Long-term debt | ||||
Instruments with fixed annual interest rates ranging from 8.38% to 11% and maturities ranging from 2008 to 2019 | U.S. | $2,986 | ||
Drawings under lines of credit based on LIBOR and other variable rates and maturities ranging from 2008 to 2014 | 6,007 | |||
Intercompany private placements at floating rate(2) | 2,022 | |||
Short-term debt | ||||
Lines of credit with variable interest rates established under committed credit facilities with various international commercial banks | 1,556 | |||
Lines of credit with fixed interest rates | 94 | |||
Total Fideicomiso F/163 | 12,665 | |||
Total Indebtedness of Pemex Project Funding Master Trust and Fideicomiso F/163(3) | U.S. | $53,068 | ||
(1) | This amount is not reflected in our consolidated financial statements due to the offsetting effects of the consolidation of the results of both Pemex-Exploration and Production, Pemex Project Funding Master Trust and Pemex Finance, Ltd. (i.e., the effects of intercompany indebtedness are eliminated). | |
(2) | Intercompany private placements do not increase PEMEX’s total indebtedness, since their balance is eliminated in the consolidation. | |
(3) | Excludes accrued interest and notes payable to contractors. |
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Year Ended December 31,(1) | ||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||||||
(in millions of U.S. dollars)(3) | ||||||||||||||||||||||||
Domestic Debt in Various Currencies(3) | U.S.$ | 694 | U.S. $ | 2,900 | U.S. $ | 6,530 | U.S.$ | 10,416 | U.S.$ | 10,885 | ||||||||||||||
External Debt(4) | ||||||||||||||||||||||||
MYRA(5) | U.S.$ | 224 | U.S. $ | 153 | U.S. $ | 77 | U.S. $ | 38 | — | |||||||||||||||
Other direct bank loans | 3,674 | 2,769 | 1,789 | 1,186 | 686 | |||||||||||||||||||
Securities | ||||||||||||||||||||||||
Bonds(6) | 11,515 | 16,285 | 22,133 | 25,931 | 27,583 | |||||||||||||||||||
Commercial paper | 433 | 432 | — | — | — | |||||||||||||||||||
Total securities | 11,948 | 16,717 | 22,133 | 25,931 | 27,583 | |||||||||||||||||||
Trade financing(7) | ||||||||||||||||||||||||
Acceptance lines | 785 | 540 | — | — | — | |||||||||||||||||||
Advances from commercial banks(8) | 2,150 | 3,323 | 2,409 | 4,370 | 4,310 | |||||||||||||||||||
Total trade financing | 2,935 | 3,863 | 2,409 | 4,370 | 4,310 | |||||||||||||||||||
Purchasing loans(9) | 380 | 387 | 366 | 309 | 257 | |||||||||||||||||||
Financial leases | 279 | 254 | 197 | 153 | 70 | |||||||||||||||||||
Export credit agency loans (project finance)(10) | 2,866 | 4,636 | 5,471 | 6,322 | 7,439 | |||||||||||||||||||
Notes payable to contractors | 1,330 | 1,195 | 1,186 | 1,068 | 952 | |||||||||||||||||||
Total external debt | U.S.$ | 23,636 | U.S.$ | 29,974 | U.S.$ | 33,628 | U.S.$ | 39,377 | U.S.$ | 41,297 | ||||||||||||||
Total Indebtedness(2) | U.S.$ | 24,330 | U.S.$ | 32,874 | U.S.$ | 40,158 | U.S.$ | 49,793 | U.S.$ | 52,183 | ||||||||||||||
(1) | Figures do not include accrued interest. Accrued interest was U.S. $331 million, U.S. $459 million, U.S. $231 million, U.S. $95 million and U.S. $139 million at December 31, 2002, 2003, 2004, 2005 and 2006, respectively. | |
(2) | Includes U.S. $14.1 billion, U.S. $22.5 billion, U.S. $26.0 billion, U.S. $32.9 billion and U.S. $37.4 billion of indebtedness of the Pemex Project Funding Master Trust as of December 31, 2002, 2003, 2004, 2005 and 2006, respectively, and U.S. $1.4 billion, U.S. $5.5 billion, U.S. $9.9 billion and U.S. $10.6 billion of indebtedness of Fideicomiso F/163 as of December 31, 2003, 2004, 2005 and 2006, respectively. | |
(3) | Indebtedness payable in currencies other than U.S. dollars was first converted into pesos for accounting purposes at the exchange rates set by Banco de México and then converted from pesos to U.S. dollars at the following exchange rates: Ps. 10.3125 = U.S. $1.00 for 2002, Ps. 11.236 = U.S. $1.00 for 2003, Ps.11.2648 = U.S. $1.00 for 2004, Ps. 10.7777 = U.S. $1.00 for 2005 and Ps. 10.8810 = U.S. $1.00 for 2006. See Notes 3 and 9 to our consolidated financial statements included herein. | |
(4) | Indebtedness payable other than in pesos and owed to persons or institutions having its head office or chief place of business outside Mexico, and payable outside the territory of Mexico. | |
(5) | Multi-Year Restructuring Agreement. | |
(6) | Includes, in 2004, 2005 and 2006, issuance by RepCon Lux, S.A. of U.S. $1.37 billion of its 4.5% Guaranteed Exchangeable Bonds due 2011 and in 2005 and 2006, U.S. $2.3 billion and U.S. $1.9 billion of bonds issued by Pemex Finance, Ltd., respectively. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—2005 Financing Activities.” | |
(7) | To finance external trade of crude oil and derivatives. | |
(8) | Includes indebtedness of the Pemex Project Funding Master Trust of U.S. $1.9 billion in trade financing advances from commercial banks as of December 31, 2002, U.S. $3.2 billion as of December 31, 2003, U.S. $2.4 billion as of December 31, 2004, U.S. $4.4 billion as of December 31, 2005 and U.S. $4.3 billion as of December 31, 2006. | |
(9) | To finance imports of equipment and spare parts. | |
(10) | Includes U.S. $2,771 million, U.S. $4,529 million, U.S. $5,428 million, U.S. $6,285 million and U.S. $7,409 million of indebtedness of the Pemex Project Funding Master Trust as of December 31, 2002, 2003, 2004, 2005 and 2006, respectively. |
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Series | Outstanding Principal Amount | |||
6.55% Notes due 2008 | U.S. $ | 194,117,647.07 | ||
6.30% Notes due 2010 | U.S. $ | 400,000,000.00 | ||
7.33% Notes due 2012 | U.S. $ | 250,000,000.00 | ||
7.80% Notes due 2013 | U.S. $ | 150,000,000.00 |
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Payments due by period | ||||||||||||||||||||
Less than 1 | After | |||||||||||||||||||
Total | year | 1-3 years | 4-5 years | 5 years | ||||||||||||||||
(in millions of U.S. dollars) | ||||||||||||||||||||
Contractual obligations recognized in balance sheet: | ||||||||||||||||||||
Long-term debt(2) | U.S. $ | 51,160.6 | U.S.$ | 5,405.9 | U.S.$ | 10,808.7 | U.S.$ | 12,166.6 | U.S.$ | 22,779.5 | ||||||||||
Notes payable to contractors(2) | 952.5 | 309.6 | 520.1 | 122.9 | — | |||||||||||||||
Capital lease obligations(3) | 70.3 | 13.2 | 22.4 | 22.4 | 12.3 | |||||||||||||||
Other long-term liabilities: | ||||||||||||||||||||
Dismantlement and abandonment costs obligations(4) | 1,419.6 | 50.3 | 183.5 | 199.3 | 986.4 | |||||||||||||||
Employee benefit plan(5) | 41,777.2 | 2,525.0 | 5,505.0 | 6,452.0 | 27,295.2 | |||||||||||||||
Total contractual obligations recognized in balance sheet | 95,380.2 | 8,304.0 | 17,039.8 | 18,963.2 | 51,073.4 | |||||||||||||||
Other contractual obligations not recognized in liabilities: | ||||||||||||||||||||
PIDIREGAS commitments(6) | 8,356.7 | 3,478.2 | 2,459.6 | 328.6 | 2,090.3 | |||||||||||||||
Financed Public Works Contracts(7) | 5,760.0 | 378.1 | 756.1 | 756.1 | 3,869.7 | |||||||||||||||
Nitrogen supply contract(8) | 1,184.9 | 214.3 | 263.1 | 230.5 | 477.0 | |||||||||||||||
Minimum guaranteed dividends(9) | 392.3 | 392.3 | — | — | — | |||||||||||||||
Total contractual obligations not recognized in liabilities | 15,693.9 | 4,462.9 | 3,478.8 | 1,315.2 | 6,437.0 | |||||||||||||||
Total contractual obligations | U.S.$ | 111,074.1 | U.S. $ | 12,766.9 | U.S.$ | 20,518.6 | U.S.$ | 20,278.4 | U.S.$ | 57,510.4 | ||||||||||
(1) | All amounts calculated in accordance with Mexican FRS. | |
(2) | See Note 9 to our consolidated financial statements. | |
(3) | See Notes 9 and 20 II g. to our consolidated financial statements. | |
(4) | See Note 2h. to our consolidated financial statements. | |
(5) | See Note 11 to our consolidated financial statements. | |
(6) | See Note 12e. to our consolidated financial statements. | |
(7) | See Note 12c. to our consolidated financial statements. | |
(8) | See Note 12a. to our consolidated financial statements. | |
(9) | See Note 14 and 20 I l. to our consolidated financial statements and “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Equity Structure and the Certificates of Contribution A.” |
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Fair value of contracts outstanding at the beginning of the period | U.S. $ | (455,431 | ) | |
Contracts realized or otherwise settled during the period | (175,988 | ) | ||
Fair value of new contracts when entered into during the period | 5,047 | |||
Other changes in fair values | 279,837 | |||
Fair value of contracts outstanding at the end of the period | U.S.$ | 5,441 | ||
Maturity | Maturity in | |||||||||||||||||||
less than | Maturity | Maturity | excess of 5 | Total fair | ||||||||||||||||
Source of Fair Value | 1 year | 1-3 years | 4-5 years | years | value | |||||||||||||||
(in thousands of U.S. dollars) | ||||||||||||||||||||
Prices actively quoted | U.S.$ | 527 | U.S.$ | 294 | U.S.$ | 0 | U.S.$ | 0 | U.S.$ | 822 | ||||||||||
Prices provided by other external sources | U.S.$ | 3,750 | U.S.$ | 869 | U.S.$ | 0 | U.S.$ | 0 | U.S.$ | 4,620 |
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Year Ended December 31, | 2005 | 2006 | ||||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2004 | vs. 2005 | ||||||||||||||||||||||
(in millions of constant pesos at December 31, 2006) | ||||||||||||||||||||||||||||
(%) | (%) | |||||||||||||||||||||||||||
Exploration and Production | ||||||||||||||||||||||||||||
Trade sales(1) | — | — | — | — | — | — | — | |||||||||||||||||||||
Intersegment sales | Ps. | 340,683 | Ps. | 482,533 | Ps. | 603,190 | Ps. | 745,320 | Ps. | 857,769 | 23.6 | 15.1 | ||||||||||||||||
Total net sales | 340,683 | 482,533 | 603,190 | 745,320 | 857,769 | 23.6 | 15.1 | |||||||||||||||||||||
Refining | ||||||||||||||||||||||||||||
Trade sales(1)(2) | 302,518 | 322,080 | 339,916 | 367,539 | 392,220 | 8.1 | 6.7 | |||||||||||||||||||||
Intersegment sales | 16,992 | 26,512 | 29,054 | 39,811 | 44,567 | 37.0 | 11.9 | |||||||||||||||||||||
Total net sales | 319,510 | 348,592 | 368,970 | 407,350 | 436,787 | 10.4 | 7.2 | |||||||||||||||||||||
Gas and Basic Petrochemicals | ||||||||||||||||||||||||||||
Trade sales(1) | 69,238 | 103,557 | 124,778 | 139,735 | 133,664 | 12.0 | (4.3 | ) | ||||||||||||||||||||
Intersegment sales | 31,348 | 57,461 | 72,240 | 85,940 | 80,049 | 19.0 | (6.8 | ) | ||||||||||||||||||||
Total net sales | 100,586 | 161,018 | 197,018 | 225,675 | 213,713 | 14.5 | (5.3 | ) | ||||||||||||||||||||
Petrochemicals | ||||||||||||||||||||||||||||
Trade sales(1) | 8,782 | 12,336 | 18,090 | 21,036 | 20,855 | 16.3 | (0.9 | ) | ||||||||||||||||||||
Intersegment sales | 4,741 | 6,854 | 7,919 | 9,174 | 9,305 | 15.8 | 1.4 | |||||||||||||||||||||
Total net sales | 13,523 | 19,190 | 26,009 | 30,210 | 30,160 | 16.1 | (0.2 | ) | ||||||||||||||||||||
Corporate and Subsidiary Companies | ||||||||||||||||||||||||||||
Trade sales(1) | 201,768 | 269,400 | 348,985 | 437,973 | 515,757 | 25.5 | 17.8 | |||||||||||||||||||||
Intersegment sales and eliminations | (393,764 | ) | (573,360 | ) | (712,403 | ) | (880,244 | ) | (991,691 | ) | 23.6 | 12.7 | ||||||||||||||||
Total net sales | (191,996 | ) | (303,960 | ) | (363,418 | ) | (442,268 | ) | (475,934 | ) | 21.7 | 7.6 | ||||||||||||||||
Total Net Sales | Ps. | 582,306 | Ps. | 707,373 | Ps. | 831,769 | Ps. | 966,284 | Ps. | 1,062,495 | 16.2 | 10.0 | ||||||||||||||||
(1) | Sales to external customers. | |
(2) | Includes IEPS tax. |
Year Ended December 31, | 2005 | 2006 | ||||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | vs. 2004 | vs. 2005 | ||||||||||||||||||||||
(in millions of constant pesos at December 31, 2006) | (%) | (%) | ||||||||||||||||||||||||||
Business Segment | ||||||||||||||||||||||||||||
Exploration and Production | Ps. | 17,617 | Ps. | 1,268 | Ps. | (14,698 | ) | Ps. | (18,988 | ) | Ps. | 73,139 | 29.2 | — | ||||||||||||||
Refining | (40,319 | ) | (40,965 | ) | (23,720 | ) | (55,425 | ) | (34,046 | ) | 133.7 | (38.6 | ) | |||||||||||||||
Gas and Basic Petrochemicals | 2,624 | 8,690 | 12,529 | 6,953 | 6,083 | (44.5 | ) | (12.5 | ) | |||||||||||||||||||
Petrochemicals | (13,822 | ) | (16,534 | ) | (13,241 | ) | (17,205 | ) | (17,376 | ) | 29.9 | 1.0 | ||||||||||||||||
Corporate and Subsidiary Companies(1) | 6,106 | 1,570 | 11,717 | 5,291 | 17,452 | (54.8 | ) | 229.8 | ||||||||||||||||||||
Total net income/(loss) | Ps. | (27,794 | ) | Ps. | (45,971 | ) | Ps. | (27,413 | ) | Ps. | (79,374 | ) | Ps. | 45,252 | 189.6 | — | ||||||||||||
(1) | Includes intersegment eliminations. |
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• | The NIFs and the CINIF’s interpretation of the NIFs; | |
• | the bulletins previously issued by the Comisión de Principios de Contabilidad (Accounting Principles Commission or “CPC”) of the Instituto Mexicano de Contadores Publicos (Mexican Institute of Public Accountants, or “MIPA”), to the extent that they have not been modified, superseded or replaced by the new NIFs; and | |
• | IFRS when applicable, which supplement the NIFs. |
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• | NIF B-3 “Income statement,” which incorporates, among other things, a new approach to classify income, Mexican FRS costs and expenses as ordinary and extraordinary. It eliminates special and extraordinary items and establishes that employees’ profit sharing should be presented as an ordinary expense rather than as an item within taxes. | |
• | NIF B-13 “Subsequent events,” which requires, among other things, the recognition of assets and liabilities restructuring in the period in which they actually take place and the recognition of creditors’ waivers to enforce their right to demand debts in the event of lack of compliance of the entity with debt agreement commitments. Such issues, if applicable, will be disclosed in the notes to the financial statements. | |
• | NIF C-13 “Related Parties”, which extends to the definition and scope of the related parties and increases the disclosure requirements in the notes, in which the financial statements. | |
• | NIF D-6 “Capitalization of the Comprehensive Financing Result,” which establishes, among other obligations, the obligation of capitalizing the comprehensive financing result and the rules for its capitalization. |
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Item 6. | Directors, Senior Management and Employees |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Ms. Georgina Y. Kessel Martínez | Chairwoman of the Board of Directors of Petróleos Mexicanos and Secretary of Energy Born: 1950 Business experience: Director General of the Mexican Mint; Director of the Investment Unit of the Ministry of Finance and Public Credit; and President of the Energy Regulating Commission. Other board memberships: Chairwoman of Federal Electricity Commission; Chairwoman of Central Light and Power; Banco Nacional de Comercio Exterior, S.N.C.; Nacional Financiera; and Comisión Nacional de Vivienda. | 2006 | ||||
Mr. Juan Rafael Elvira Quesada | Board Member of Petróleos Mexicanos and Secretary of the Environment and Natural Resources Born: 1958 Business experience: Assistant Attorney for Industrial Inspection at the Federal Attorney for Environmental Protection; Undersecretary for Environmental Promotion and Regulations of the Ministry of the Environment and Natural Resources; and Director General of the Primary Sector and Renewable Natural Resources of the Ministry of the Environment and Natural Resources. Other board memberships: Federal Electricity Commission. | 2006 | ||||
Mr. Gerardo Ruiz Mateos | Board Member of Petróleos Mexicanos and General Coordinator of Cabinets and Special Projects of the Presidential Office Born: 1965 Business experience: Management and Finance Coordinator of Felipe Calderón’s presidential campaign; President of Linde Pullman México, S.A. de C.V.; and Director General of Automotive Moulding of México, S.A. de C.V. | 2007 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Mr. Eduardo Sojo Garza Aldape | Board Member of Petróleos Mexicanos and Secretary of Economy Born: 1956 Business experience: Economic Advisor of Felipe Calderón’s presidential campaign; Liaison coordinator with the Federal Public Administration for the transition team of thePresident-elect; Head of the President’s Office for Public Policy and Coordinator of the Economic Cabinet. Other board memberships: Aeropuertos y Servicios Auxiliares; Baja Bulk Carriers; Banco del Ahorro Nacional y Servicios Financieros, S.N.C.; Chairman of the Banco Nacional de Comercio Exterior, S.N.C.; Caminos y Puentes Federales y Servicios Conexos; Chairman of the Centro Nacional de Metrología; Federal Electricity Commission; Comisión Intersecretarial de Desincorporación; Comisión Intersecretarial de Gasto-Financiamiento; Comisión Intersecretarial de Política Industrial; Comisión Intersecretarial de Precios y Tarifas de los Bienes y Servicios de la Administración Pública Federal; Comisión Intersecretarial para la Transparencia y el Combate a la Corrupción de la Administración Pública Federal; Chairman of the Comisión Nacional de Inversiones Extranjeras; Consejo General de Investigación Científica y Desarrollo Tecnológico; Chairman of the Consejo Nacional para la Competitividad de la Micro, Pequeña y Mediana Empresa; Chairman of the Fondo para la Micro, Pequeña y Mediana Empresa; Chairman of the Consejo Nacional de Ciencia y Tecnología; Fideicomiso Fondo Institucional para el Fomento de la Ciencia, el Fomento de la Tecnología y el Fomento, Desarrollo y Consolidación de Científicos y Tecnólogos; Fondo Sectorial de Ciencia y Tecnología para el Desarrollo Económico; Chairman of the Instituto Mexicano de la Propiedad Industrial; Servicio Postal Mexicano; Nacional Financiera, S.N.C.; Chairman of the Servicio Geológico Mexicano; Telecomunicaciones de México; Chairman of Exportadora de Sal, S.A. de C.V.; and Chairman of Transportadora de Sal, S.A. de C.V. | 2007 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Mr. Luis Téllez Kuenzler | Board Member of Petróleos Mexicanos and Secretary of Communications and Transportation Born: 1958 Business experience: Co-Director of the Carlyle Group; Executive Vicepresident of Grupo Desc, S.A. de C.V.; and Secretary of Energy. Other board memberships: Chairman of Aeropuertos y Servicios Auxiliares; Chairman of Caminos y Puentes Federales de Ingresos y Servicios Conexos; Chairman of Servicio Postal Mexicano; Banco Nacional de Obras y Servicios Públicos, S.N.C.; Notimex; Consejo Mexicano para el Desarrollo Rural Sustentable; Consejo Nacional de Vivienda; Televisión Metropolitana, S.A. de C.V., Canal 22; Estudios Churubusco Azteca, S.A. de C.V.; Instituto Mexicano de Cinematografía; and Comisión Nacional de las Zonas Áridas. | 2007 | ||||
Mr. Agustín Guillermo Carstens Carstens | Board Member of Petróleos Mexicanos and Secretary of Finance and Public Credit Born: 1958 | 2007 | ||||
Business experience: Deputy Managing Director of the International Monetary Fund; Undersecretary of the Ministry of Finance and Public Credit; and several positions such as Director General of Economic Research, Treasurer and Coordinator of the Governor’s Advisors in Banco de México. Other board memberships: Chairman of Agroasemex, S.A., Instituto Nacional de Seguros; Chairman of Banco del Ahorro Nacional y Servicios Financieros, S.N.C.; Chairman of Banco Nacional de Comercio Exterior, S.N.C.; Chairman of Banco Nacional de Obras y Servicios Públicos, S.N.C.; Comisión Nacional Bancaria y de Valores; Comisión Nacional de Seguros y Fianzas; | ||||||
Chairman of Banco Nacional del Ejército, Fuerza Aérea y Armada, S.N.C.; Chairman of Diconsa, S.A. de C.V.; Chairman of Nacional Financiera, S.N.C.; Chairman of Sociedad Hipotecaria Federal, S.N.C.; Aeropuertos y Servicios Auxiliares; Chairman of Caminos y Puentes Federales de Ingresos y Servicios Conexos; Casa de Moneda de México; Federal Electricity Commission; Chairman of Comisión Nacional para la Protección y Defensa de los Usuarios de Servicios Financieros; Chairman of Financiera Rural; |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Fondo de Cultura Económica; Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado; Instituto de Seguridad Social; Instituto para la Protección al Ahorro Bancario; Servicio de Administración y Enajenación de Bienes; Chairman of Comisión Intersecretarial de Desincorporación; Chairman of Comisión Intersecretarial de Gasto Financiamiento; Comisión Intersecretarial de Política Industrial; Comisión de Transparencia y Combate a la Corrupción en la Administración Pública Federal; Comisión Nacional de Inversiones Extranjeras; Governor for Mexico of Banco Interamericano de Desarrollo; Governor for Mexico of Corporación Interamericana de Inversiones; Governor for Mexico of Banco Interamericano de Reconstrucción y Fomento of the World Bank; Governor for Mexico of Organismo Multilateral de Garantía de Inversión of the World Bank; and Governor for Mexico of Banco de Desarrollo del Caribe. | ||||||
Mr. Fernando Pacheco Martínez | Board Member of Petróleos Mexicanos and Union Representative Born: 1952 Business experience: Exterior and Propaganda Secretary of the Union; Internal and Agreements Secretary of the Union; and General Secretary of Section 24 of the Union. | 2007 | ||||
Mr. Jorge Wade González | Board Member of Petróleos Mexicanos and Union Representative Born: 1947 Business experience: Union commissioner of Petróleos Mexicanos. | 2007 | ||||
Mr. Luis Ricardo Aldana Prieto | Board Member of Petróleos Mexicanos and Union Representative Born: 1954 Business experience: Senator of the LIXthLegislature; Chairman of the General Supervision Board of the General Executive Committee of the Union; and Treasury Secretary of the General Executive Committee of the Union. | 2001 | ||||
Mr. Héctor Manuel Sosa Rodríguez | Board Member of Petróleos Mexicanos and Union Representative Born: 1964 Business experience: General Secretary of Section 34 of the Union; Exterior Secretary of the Union; and Internal Secretary of the Union. | 2007 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Mr. Pedro García Barabata | Board Member of Petróleos Mexicanos and Union Representative Born: 1957 Business experience: Union commissioner of Petróleos Mexicanos | 2007 | ||||
Mr. Jesús Federico Reyes Heroles González Garza | Director General / Chief Executive Officer Born: 1952 Business experience: Executive President of GEA Structura; Mexican Ambassador to the United States; and Secretary of Energy. Other board memberships: Instituto Mexicano del Petróleo. | 2006 | ||||
Mr. Esteban Levin Balcells | Chief Financial Officer Born: 1972 Business experience: Deputy Director of Finance and Treasury of Petróleos Mexicanos; Chief of Staff of the Corporate Financial Office of Petróleos Mexicanos; Acting Deputy Director of the Financial Information Systems of Petróleos Mexicanos; and Associate Consultant and Engagement Manager of McKinsey & Co. | 2006 | ||||
Ms. Martha Alicia Olvera Rodríguez | Deputy Director of Programming and Budgeting Born: 1954 Business experience: Associate Managing Director of Planning and Financial Programming of Petróleos Mexicanos; Associate Managing Director of Budget Control of Petróleos Mexicanos; and Deputy Manager of Programs Integration of Petróleos Mexicanos. | 2002 | ||||
Mr. Mauricio Alazraki Pfeffer | Deputy Director of Finance and Treasury Born: 1965 Business experience: Associate Managing Director of Finance of Petróleos Mexicanos; Deputy Manager of Capital Markets of Petróleos Mexicanos; and Manager for Latin America of West Merchant Bank, Ltd. | 2006 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Mr. Víctor M. Cámara Peón | Deputy Director of Financial Information Systems Born: 1943 Business experience: Advisor of the Chief Financial Officer; Director of Control and Operational Risk of Banco Nacional de México, S.A.; Director General of Human Resources of Banco Nacional de México, S.A.; and Administrative Director of Banco Nacional de México, S.A. | |||||
Other board memberships: Intermarítima Maya, S.A. de C.V.; Grupo Roche, S.A. de C.V.; Comercial Salinera de Yucatán, S.A. de C.V.; Infraestructura Maya Peninsular, S.A. de C.V.; and Industria Salinera de Yucatán, S.A. de C.V. | 2003 | |||||
Mr. Fausto Barajas Cummings | Deputy Director of Economic Planning Born: 1972 Business experience: Associate Managing Director of Planning and Economic Performance Evaluation of Petróleos Mexicanos; Consultant of McKinsey & Co.; and Advisor of the Secretary of Energy. | 2006 | ||||
Mr. José Manuel Carrera Panizzo | Deputy Director of Risk Management Born: 1969 Business experience: Manager of Foreign Exchange, Metals, Coins and International Agreements of Banco de México; Research Officer of Markets Analysis and Evaluation of Banco de México; and Foreign Exchange Analyst of Banco de México. | 2001 | ||||
Mr. Rosendo Villarreal Dávila | Corporate Director of Management Born: 1942 Business experience: Head of the Internal Control Body of the SFP; Senator of the LVIth and LVIIth Legislature; and Mayor of Saltillo, State of Coahuila. Other board memberships: Transportes Villarreal Berlanga, S.A. de C.V. | 2005 | ||||
Mr. Lamberto Alonso Calderón | Deputy Director of Labor Relations Born: 1953 Business experience: Advisor “A” of the Deputy Director of Finance and Management of Pemex-Refining; Chief of Commercial Performance and Control Procedures Unit of Pemex-Refining; and Chief of Management Unit of Pemex-Refining. | 2005 | ||||
Mr. José Néstor García Reza | General Counsel Born: 1965 Business experience: Head of Legal Advising Office of Pemex-Exploration and Production; Chief of the Legal Unit of Pemex-Exploration and Production; and Legal Director of Banca Quadrum, S.A. | 2005 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Mr. José Salazar Ilarregui Ruffino | Deputy Director of Corporate Services Born: 1952 Business experience: Technical Director of Telecomunicaciones de México of the Ministry of Communications and Transportation; Vice President of Information Technology of Corporación Novavisión S. de R.L.; and Director of Technology of Cablevisión, S.A. de C.V. | 2005 | ||||
Mr. Víctor Manuel Vázquez Zárate | Deputy Director of Health Services Born: 1943 Business experience: Associate Managing Director of Medical Services of Petróleos Mexicanos; Administrative Deputy Manager of Petróleos Mexicanos; and Director of Central South Hospital of Petróleos Mexicanos. | 2000 | ||||
Mr. Marco Antonio Murillo Soberanis | Deputy Director of Human Resources Born: 1959 Business experience: Corporate Associate Managing Director of Human Resources of Petróleos Mexicanos; Chief of the Process and Information Unit of Petróleos Mexicanos; Chief of Planning and Evaluation Unit of Petróleos Mexicanos. | 2005 | ||||
Mr. Emilio del Bosque González | Corporate Deputy Director of Equity Management Born: 1947 Business experience: Strategy and Negotiations Consultant; Corporate Director of Supplying of Grupo Industrial Saltillo, S.A. de C.V.; and Director of Purchases of CIFUNSA, S.A. de C.V. Other board memberships: Instalaciones Inmobiliarias para Industrias, S.A. de C.V.; and I.I.I. Servicios, S.A. de C.V. | 2006 | ||||
Mr. Raúl Alejandro Livas Elizondo | Corporate Director of Operations Born: 1966 Business experience: Executive President of MxV México Capital Ventures, S. de R.L. de C.V.; Director of Management and Business Development of Intellego, S.C.; and Partner-Consultant of GEA Grupo de Economistas y Asociados, S.C. | 2007 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Mr. Rolando Alejandro Hernández Albín | Deputy Director of Business Process and Technological Infrastructure Born: 1953 Business experience: Director and Partner of Tecnofín Comercio Electronico S.A. de C.V.; Information Systems Director of Registro Nacional de Vehículos; and Systems Integration Director of SHL Systemhouse, S.A. de C.V. | 2007 | ||||
Other board memberships: Director/Partner of Tecnofín Comerico Electronico, S.A. de C.V.; and Alternate Director of Grupo Financiero Monex, S.A. de C.V. | ||||||
Mr. Guillermo Ruiz Gutiérrez | Deputy Director of Strategy and Operative Planning Born: 1959 Business experience: Associate Managing Director of Pemex-Refining; Manager; and Superintendent of Petróleos Mexicanos. | 2004 | ||||
Mr. Alejandro Martínez Sibaja | Deputy Director of Operations and Strategy Execution Born: 1956 Business experience: Commercial Associate Managing Director of Transportation of Pemex-Gas and Basic Petrochemicals; Associate Managing Director of Programming and Analysis of Pemex-Gas and Basic Petrochemicals; and Associate Managing Director of Operations of PMI. Other board memberships: Gasoductos de Chihuahua, S.A. | 2005 | ||||
Mr. Guillermo Camacho Uriarte | Deputy Director of Operative Discipline, Safety, Health and Environmental Protection Born: 1954 Business experience: Corporate Associate Managing Director of Regulations of Petróleos Mexicanos; Associate Managing Director of Industrial Safety and Environmental Protection of Petróleos Mexicanos; and Head of the Quality Systems Auditing Unit of Petróleos Mexicanos. | 2007 | ||||
Mr. Raúl Mendoza Mata | Deputy Director of Supplies Born: 1941 Business experience: Associate Managing Director of Technical and Administrative Problems of Petróleos Mexicanos; Advisor of the Deputy Director of Engineering and Strategic Works Development of Pemex-Exploration and Production; and Deputy Manager of Engineering of Pemex-Exploration and Production. | 2007 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Mr. Franciso Fernández Lagos | Acting Deputy Director of Pipeline Transportation System Coordination Born: 1955 Business experience: Associate Managing Director of Maintenance Management of Pemex-Exploration and Production; Associate Managing Director of Pipelines Maintenance of Pemex-Exploration and Production; and Deputy Manager of Maintenance (South region) of Pemex-Exploration and Production. | 2007 | ||||
Mr. Pedro Ismael Hernández Delgado | Acting Deputy Director of Maintenance Coordination Born: 1957 Business experience: Associate Managing Director of Tracking the Industrial Safety and Environmental Protection System of Petróleos Mexicanos; Associate Managing Director of Refineries Maintenance of Pemex-Refining; and Associate Managing Director of Infrastructure Development of Pemex-Refining. | 2006 | ||||
Mr. Ernesto Ríos Montero | Acting Corporate Director of Engineering and Project Development and Deputy Director of Engineering Born: 1936 Business experience: Director of Consultoría Empresarial Ejecutiva, S.A. de C.V.; Executive Vice President of Operations of Grupo Bufete Industrial, S.A.; Vice President of Engineering of Grupo Bufete Industrial, S.A. Other board memberships: Instituto Mexicano del Petróleo (Alternate). | 2006 | ||||
(Vacant) | Deputy Director of Planning, Evaluation and Control Coordination | |||||
Mr. Francisco Guillermo Iturbide Ruiz | Deputy Director of Contracts Born: 1955 Business experience: Associate Managing Director of Contracts of Pemex-Exploration and Production; Associate Managing Director of Management and Services of Pemex-Exploration and Production; and Deputy Manager of Biddings and Contracts of Pemex-Exploration and Production. | 2005 | ||||
Mr. Genaro Ceballos Bravo | Deputy Director of Industrial Plants Projects Born: 1956 Business experience: Associate Managing Director of Projects ‘C’ of Petróleos Mexicanos; Associate Managing Director of Projects and Construction of Pemex-Gas and Basic Petrochemicals and Vice President of Projects of P.M.I. Holdings North America, Inc. | 2005 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Mr. José Fortunato Álvarez Enríquez | Head of the Internal Control Body Born: 1937 Business experience: Regional delegate of the Instituto Mexicano del Seguro Social in Baja California and Sonora; Head of the Internal Control Body of the Instituto para la Protección al Ahorro Bancario; and Federal Delegate in Baja California of the Ministry of Social Development. | 2007 | ||||
Mr. Juan Adrián Puig Márquez | Head of Liabilities Area and Head of Complaints Area Born: 1958 Business experience: Head of Liabilities and Head of Complaints Area of the Comisión Nacional Bancaria y de Valores; Legal Advisor of Ochoa, Esquivel, S.C.; and Independent Legal Advisor of Banco Promotor del Norte, S.A., Grupo Financiero Pronorte. | 2006 | ||||
Mr. Benjamín Hedding Galeana | Head of Control and Evaluation Auditing and Support to Good Governance Born: 1945 Business experience: Head of Control and Evaluation Auditing and Support to Good Governance of the Comisión Nacional Bancaria y de Valores; Coordinator of the Colonial Cities and Urban Centers Program of the Ministry of Tourism; and Chief Executive Officer of Electric Transportation Services of the Federal District Department. | 2005 | ||||
Mr. Héctor Aguiñaga Pérez | Head of the Internal Auditing Area Born: 1950 Business experience: National Director of Management Assurance Services of KPMG Cárdenas Dosal, S.C.; General Auditor of Pan-American Beverages, Inc.; and General Auditor of Sears Roebuck, S.A. de C.V. | 2004 | ||||
Mr. Mariano Ruiz-Funes Macedo | Chief of Staff of the Director General Born: 1958 Business experience: Director General, Partner Director and Board Member of GEA Grupo de Economistas y Asociados, S.C.; and Independent Board member of Seguros Mapfre-Tepeyac, S.A. Other board memberships: Instalaciones Inmobiliarias para Industrias, S.A. de C.V.; and I.I.I. Servicios, S.A. de C.V. | 2007 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Mr. Roberto Ortega Lomelín | Executive Coordinator to the General Direction Born: 1950 Business experience: Partner/Founder of Grupo de Asesoría Estratégica; Administrative Official of the Ministry of Energy; and Assistant Director of Promotion and Technical Assistance of Banco Nacional de Obras y Servicios Públicos, S.N.C. | 2007 | ||||
Vacant | Executive Advisor to the General Direction | |||||
Mr. Raoul Capdevielle Orozco | Technical Secretary of the Director General Born: 1943 Business experience: Deputy Comptroller of Liabilities of Petróleos Mexicanos; Legal Coordinator of Instalaciones Inmobiliarias para Industrias, S.A. and I.I.I. Servicios, S.A. de C.V.; and Legal Director of Concessions of Triturados Balsáticos y Derivados, S.A. de C.V. | 2001 |
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Name | Position with Pemex-Exploration and Production | Year Appointed | ||||
Mr. Jesús Reyes Heroles González Garza | Chairman of the Board of Pemex-Exploration and Production (refer to Petróleos Mexicanos) | 2006 | ||||
Mr. José Antonio Ceballos Soberanis | Board Member of Pemex-Exploration and Production (refer to Pemex-Refining) | 2007 | ||||
Mr. Roberto Ramírez Soberón | Board Member of Pemex-Exploration and Production (refer to Pemex-Gas and Basic Petrochemicals) | 2006 | ||||
Mr. Rafael Beverido Lomelín | Board Member of Pemex-Exploration and Production (refer to Pemex-Petrochemicals) | 2001 | ||||
Mr. Mario Gabriel Budebo | Board Member of Pemex-Exploration and Production and Undersecretary of Hydrocarbons of the Ministry of Energy Born: 1963 Business experience: President of the Comisión Nacional del Sistema de Ahorro para el Retiro; Chief of Staff of the Secretary of Finance and Public Credit; and General Coordinator of Revenues Policy of the Ministry of Finance and Public Credit. Other board memberships: Banco Nacional de Comercio Exterior, S.N.C.(Alternate); and Nacional Financiera, S.N.C. (Alternate). | 2007 | ||||
Mr. Ernesto Javier Cordero Arroyo | Board Member of Pemex-Exploration and Production and Undersecretary of Disbursements of the Ministry of Finance and Public Credit Born: 1968 Business experience: Advisor Coordinator and Public Policy Coordinator of Felipe Calderón’s presidential campaign; Director General of Fundación Desarollo Humano Sustentable; Undersecretary of Energy Planning and Technological Development of the Ministry of Energy; and Chief of Technical Advisor and Institutional Liaison Unit of the Ministry of Energy. Other board memberships: Federal Electricity Commission (Alternate); Central Light and Power; Banco Nacional de Obras y Servicios Públicos, S.N.C.; Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado; Banco Nacional de Comercio Exterior, S.N.C.; Exportadora de Sal, S.A.; and Transportadora de Sal, S.A. | 2007 |
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Name | Position with Pemex-Exploration and Production | Year Appointed | ||||
Mr. Dionisio Pérez-Jácome Friscione | Board Member of Pemex-Exploration and Production and Chief of Staff of the Presidential Office Born: 1967 Business experience: Partner-Director of Mercer Management Consulting; President of the Energy Regulatory Commission; and Executive Director of the State Managing Committee to capitalize non-basic petrochemical companies of the Ministry of Energy. | 2007 | ||||
Mr. Raúl Alejandro Livas Elizondo | Board Member of Pemex-Exploration and Production (refer to Petróleos Mexicanos) | 2007 | ||||
Mr. Carlos Arnoldo Morales Gil | Director General Born: 1954 Business experience: Deputy Director of Planning and Evaluation of Pemex-Exploration and Production; Deputy Director (Southern region) of Pemex-Exploration and Production; and Associate Managing Director of Planning of Pemex-Exploration and Production. | 2006 | ||||
Mr. Sergio Aceves Borbolla | Deputy Director of Engineering and Strategic Works Development Born: 1959 Business experience: Associate Managing Director of Projects (Northeastern Marine region) of Petróleos Mexicanos; Associate Managing Director of Construction of Pemex-Exploration and Production; and Head of Transition Projects of Pemex-Exploration and Production. | 2005 | ||||
Mr. Vinicio Suro Pérez | Deputy Director of Planning and Evaluation Born: 1956 Business experience: Associate Managing Director of Hydrocarbon Reserves of Pemex-Exploration and Production; Chief of the Hydrocarbon Reserves Unit of Pemex-Exploration and Production; and Specialists Coordinator of Pemex-Exploration and Production. | 2006 | ||||
Mr. J. Javier Hinojosa Puebla | Deputy Director (Northeastern Marine region) Born: 1958 Business experience: Coordinator of the Executive Commercial Operative Coordination of Pemex-Exploration and Production; Associate Managing Director of Analysis and Technical Operative Evaluation (Southern region) of Pemex-Exploration and Production; and Associate Managing Director of Production (Southern region) of Pemex-Exploration and Production. | 2003 |
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Name | Position with Pemex-Exploration and Production | Year Appointed | ||||
Mr. Jorge Antonio Fernández Venegas | Deputy Director (Northern region) Born: 1953 Business experience: Manager of Integral Veracruz Business Unit (Northern region) of Pemex-Exploration and Production; Manager of Bellota-Chinchorro Production Business Unit (Southern region) of Pemex-Exploration and Production; and Manager of Luna Production Business Unit (Southern region) of Pemex-Exploration and Production. | 2007 | ||||
Mr. Jesús Hernández San Juan | Deputy Director of Distribution and Trading Born: 1955 Business experience: Associate Managing Director of Transport and Distribution of Hydrocarbons of Pemex-Exploration and Production; Deputy Manager of Transport and Distribution of Gas and Condensates of Pemex-Exploration and Production; and Chief of the Compression Systems Department of Pemex-Exploration and Production. | 2006 | ||||
Mr. Rogelio Bartolomé Morando Sedas | Deputy Director of Industrial Safety, Environmental Protection and Quality Born: 1946 Business Experience: Advisor of the Corporate Director of Industrial Safety and Environmental Protection of Petróleos Mexicanos; Director General of Industrias Tecnos, S.A. de C.V.; and Plant Manager of Dupont, S.A. de C.V. | 2003 | ||||
Mr. Teódulo Gutiérrez Acosta | Deputy Director of Technical Coordination of Exploitation Born: 1944 Business Experience: Deputy Director of Human Resources, Competitiveness and Innovation of Pemex-Exploration and Production; Associate Managing Director of Professional Development of Pemex-Exploration and Production; and Associate Managing Director of Technological Development of Production of Pemex-Exploration and Production. | 2007 |
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Name | Position with Pemex-Exploration and Production | Year Appointed | ||||
Mr. Manuel de Jesús Alegría Constantino | Deputy Director of Marine Services Coordination Born: 1951 Business experience: Associate Managing Director of Supply Strategies of Pemex-Exploration and Production; Acting Associate Managing Director of Management and Finance (Northern region) of Pemex-Exploration and Production; and Deputy Manager of Material Resources (Northern region) of Pemex-Exploration and Production. | 2006 | ||||
Mr. Jorge Collard de la Rocha | Deputy Director of Management and Finance Born: 1951 Business experience: Acting Deputy Director of Supplies of Petróleos Mexicanos; Chief Financial Officer of Banco Nacional de Obras y Servicios Públicos, S.N.C. and Director General of Programming and Budget of Energy and Infrastructure of the Ministry of Finance and Public Credit. | 2005 | ||||
Mr. Ricardo Palomo Martínez | Deputy Director of Drilling and Well Maintenance Unit Born: 1954 Business experience: Deputy Director (Southwestern Marine region) of Pemex-Exploration and Production, Manager of Burgos Production Asset of Pemex-Exploration and Production; and Associate Managing Director of Integral Project of Burgos basin. | 2005 | ||||
Mr. Luis Sergio Guaso Montoya | Deputy Director of New Models of Execution Born: 1963 Business Experience: Associate Managing Director of Economic Analysis of Pemex-Exploration and Production; Associate Managing Director of Investment Resources of Pemex-Exploration and Production; Economic Advisor of P.M.I. Holdings North America, Inc. | 2003 | ||||
Mr. Francisco Javier Barraza Rodríguez | Deputy Director of Technology Information Coordination Born: 1943 Business experience: Technical Support on Documental Technology of ImaxServ; Director of Administrative Systems of Scotiabank Inverlat, S.A.; and External Consultant on Administrative Systems of Banco Nacional de México, S.A. | 2003 |
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Name | Position with Pemex-Exploration and Production | Year Appointed | ||||
Mr. Pedro Silva López | Deputy Director (Southwestern Marine region) Born: 1953 Business experience: Deputy Director of Operations Coordination of Petróleos Mexicanos; Executive Director of Strategic Gas Program of Pemex-Exploration and Production; and Associate Managing Director of Strategic Planning of Pemex-Exploration and Production. | 2005 | ||||
Mr. José Serrano Lozano | Deputy Director (Southern region) Born: 1956 Business Experience: Manager of Integral Samaria-Luna Business Unit (Southern region) of Pemex-Exploration and Production; Manager of Integral Burgos Business Unit (Northern region) of Pemex-Exploration and Production; and Associate Managing Director of Planning (Northern region) of Pemex-Exploration and Production. | 2007 | ||||
Mr. José Antonio Escalera Alcocer | Deputy Director of Technical Coordination of Exploration Born: 1958 Business Experience: Manager of Integral Burgos Business Unit (Northern region) of Pemex-Exploration and Production; Manager of Integral Poza Rica - Altamira Business Unit (Northern region) of Pemex-Exploration and Production; and Associate Managing Director of Diagnosis and Risk Analysis of Pemex-Exploration and Production. Other board memberships: Compañía Mexicana de Exploraciones, S.A. de C.V. | 2007 | ||||
Mr. José Aurelio Loyo Fernández | Deputy Director of Human Resources, Competitiveness and Innovation Born: 1951 Business experience: Associate Managing Director of Operative Planning of Pemex-Exploration and Production; Associate Managing Director of Investment Evaluation in Exploration of Pemex-Exploration and Production; and Asset Manager of Muspac Production of Pemex-Exploration and Production. | 2006 | ||||
Mr. Raúl Carrera Pliego | Acting Head of the Internal Control Body Born: 1954 Business Experience: Head of Liabilities of the Internal Control Body of Pemex-Exploration and Production; Advisor of the Undersecretary of Attention to the Citizen and Regulations of the SFP; and Assistant Director General of the Secretaría de Contraloría y Desarrollo Administrativo. | 2007 |
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Name | Position with Pemex-Refining | Year Appointed | ||||
Mr. Jesús Reyes Heroles González Garza | Chairman of the Board of Pemex-Refining (refer to Petróleos Mexicanos) | 2006 | ||||
Mr. Roberto Ramírez Soberón | Board Member of Pemex-Refining (refer to Pemex-Gas and Basic Petrochemicals) | 2006 | ||||
Mr. Carlos A. Morales Gil | Board Member of Pemex-Refining (refer to Pemex-Exploration and Production) | 2006 | ||||
Mr. Rafael Beverido Lomelín | Board Member of Pemex-Refining (refer to Pemex Petrochemicals) | 2001 | ||||
Mr. Jordy H. Herrera Flores | Board Member of Pemex-Refining and Undersecretary of Energy Planning and Technological Development of the Ministry of Energy Born: 1972 Business experience: Partner and founder of Alimentos Iberoamericanos, S.A. de C.V.; Director General of the Investments Promotion Unit of the Ministry of Energy; and Private Secretary of the Ministry of Energy. Other board memberships: Chairman of Instituto Nacional de Investigaciones Nucleares; Centro de Investigación y Docencia Económicas; Comisión Intersecretarial de Cambio Climático (Alternate); Consejo Nacional de Ciencia y Tecnología; Instituto de Investigaciones Eléctricas; Comisión Nacional para el Ahorro de Energía (Alternate); Comisión Ambiental Metropolitana (Alternate); Consejo Nacional para la Competitividad de la Micro, Pequeña y Mediana Empresa (Alternate); Comisión Intersecretarial para el Desarrollo Rural Sustentable (Alternate); Comisión Nacional de Inversiones Extranjeras (Alternate); and Comisión Nacional del Agua (Alternate). | 2007 | ||||
Mr. Ernesto Cordero Arroyo | Board Member of Pemex-Refining (refer to Pemex-Exploration and Production) | 2007 | ||||
Mr. Dionisio Pérez-Jácome Friscione | Board Member of Pemex-Refining (refer to Pemex-Exploration and Production) | 2007 | ||||
Mr. Roberto Ortega Lomelín | Board Member of Pemex-Refining (refer to Petróleos Mexicanos) | 2007 | ||||
Mr. José Antonio Ceballos Soberanis | Director General Born: 1943 Business experience: Director General of Instituto Mexicano del Petróleo; Corporate Director of Operations of Petróleos Mexicanos; and Director General of Pemex-Exploration and Production. Other board memberships: Instituto Mexicano del Petróleo. | 2006 |
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Name | Position with Pemex-Refining | Year Appointed | ||||
Mr. Moisés Ithuriel Orozco García | Deputy Director of Trading Born: 1968 Business experience: Executive Advisor to the Director General Office of Petróleos Mexicanos; Corporate Director of Management of Petróleos Mexicanos; and Associate Managing Director of Strategic Planning of Petróleos Mexicanos. | 2007 | ||||
Mr. Mario Nieto Garza | Deputy Director of Distribution Born: 1955 Business experience: Deputy Director of Pipelines of Pemex-Gas and Basic Petrochemicals; Deputy Director of Pipeline Transportation System Coordination of Petróleos Mexicanos; and Associate Managing Director of Daily Operation Tracking of Petróleos Mexicanos. | 2007 | ||||
Mr. José Antonio Gómez Urquiza de la Macorra | Deputy Director of Finance and Management Born: 1951 Business experience: Director General of Cámara de la Industria del Hierro y del Acero; Deputy Director of Management of Delegación Benito Juárez in Mexico City; and Federal Congressman of the LVth Legislature. | 2003 | ||||
Mr. Rodrigo Favela Fierro | Deputy Director of Planning, Coordination and Evaluation Born: 1965 Business experience: Associate Managing Director of Strategic Planning of Petróleos Mexicanos; Associate Managing Director of Operations Evaluation of Petróleos Mexicanos; and Coordinator of Planning Advisors of Pemex-Refining. | 2007 | ||||
Mr. Antonio Álvarez Moreno | Deputy Director of Industrial Safety and Environmental Protection Auditing Born: 1958 Business experience: Associate Managing Director of Industrial Safety and Occupational Health of Petróleos Mexicanos; Chief of the Industrial Safety and Environmental Protection Unit of Refinery “Ing. Antonio M. Amor” of Pemex-Refining; and Acting Consultant of Industrial Safety and Environmental Protection of Pemex-Refining. | 2007 |
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Name | Position with Pemex-Refining | Year Appointed | ||||
Mr. Francisco Gabriel Toscano Martínez | Deputy Director of Production Born: 1949 Business experience: Associate Managing Director of “Francisco I. Madero” Refinery of Pemex-Refining; Associate Managing Director of “Héctor R. Lara Sosa” Refinery ofPemex-Refining; and Regional Associate Managing Director of “Miguel Hidalgo” Refinery of Pemex-Refining. | 2006 | ||||
Mr. Isaías Nicolás Navarro Román | Deputy Director of Storage and Allotment Born: 1936 Business experience: Deputy Director of Industrial Safety, Occupational Health and Sustainable Development of Petróleos Mexicanos; General Coordinator for Safety and Environmental Protection Systems in Pemex-Gas and Basic Petrochemicals; and Industrial Safety and Environmental Protection Auditor in Pemex-Gas and Basic Petrochemicals. | 2007 | ||||
Ms. Alicia Pineda y Mitolo | Head of the Internal Control Body Born: 1947 Business experience: Head of the Internal Control Body of Federal Competition Commission; Head of the Internal Control Body of the Ministry of Foreign Affairs; and Internal Comptroller of the Sistema Nacional para el Desarrollo de la Familia. | 2007 |
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Name | Position with Pemex-Gas and Basic Petrochemicals | Year Appointed | ||||
Mr. Jesús Reyes Heroles González Garza | Chairman of the Board of Pemex-Gas and Basic Petrochemicals (refer to Petróleos Mexicanos) | 2006 | ||||
Mr. Carlos A. Morales Gil | Board Member of Pemex-Gas and Basic Petrochemicals (refer to Pemex-Exploration and Production) | 2006 | ||||
Mr. José Antonio Ceballos Soberanis | Board Member of Pemex-Gas and Basic Petrochemicals (refer to Pemex-Refining) | 2006 | ||||
Mr. Rafael Beverido Lomelín | Board Member of Pemex-Gas and Basic Petrochemicals (refer to Pemex-Petrochemicals) | 2001 | ||||
Mr. Mario Gabriel Budebo | Board Member of Pemex-Gas and Basic Petrochemicals (refer to Pemex- Exploration and Production) | 2007 | ||||
Mr. Ernesto Cordero Arroyo | Board Member of Pemex-Gas and Basic Petrochemicals (refer to Pemex-Exploration and Production) | 2007 | ||||
Mr. Dionisio Pérez-Jácome Friscione | Board Member of Pemex-Gas and Basic Petrochemicals (refer to Pemex-Exploration and Production) | 2007 | ||||
Mr. Roberto Ortega Lomelín | Board Member of Pemex-Gas and Basic Petrochemicals (refer to Petróleos Mexicanos) | 2007 | ||||
Mr. Roberto Ramírez Soberón | Director General Born: 1950 Business experience: Deputy Director of Planning of Pemex-Gas and Basic Petrochemicals; Commercial Associate Managing Director; and Associate Managing Director of Urban Distribution of Pemex-Gas and Basic Petrochemicals. | 2006 | ||||
Mr. Salvador Ortiz Vértiz | Deputy Director of Planning Born: 1949 Business experience: General Coordinator of Mining of the Ministry of Economy; Assistant Director and Deputy Director of Sectorial Studies for Grupo Financiero Banamex-Accival, S.A.; and Senior Advisor to Energy Sector and Basic Industries of Grupo Financiero Banamex-Accival, S.A. | 2007 | ||||
Mr. Miguel Francisco Bueno Fernández | Acting Deputy Director of Liquified Gas and Basic Petrochemicals Born: 1953 Business experience: Associate Managing Director of Operations of Pemex-Gas and Basic Petrochemicals; Associate Managing Director of Business Planning of Pemex-Gas and Basic Petrochemicals; and Associate Managing Director of Liquefied Gas Trading of Pemex-Gas and Basic Petrochemicals. | 2007 |
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Name | Position with Pemex-Gas and Basic Petrochemicals | Year Appointed | ||||
Mr. Luis Felipe Luna Melo | Deputy Director of Natural Gas Born: 1956 Business experience: Commercial Representative in Tokyo and Deputy Manager of Analysis of PMI; and President of P.M.I. Norteamérica, S.A. de C.V. | 1996 | ||||
Mr. Agustín Castro Pérez | Deputy Director of Management and Finance Born: 1962 Business experience: Associate Managing Director of Evaluation and Information of Pemex-Gas and Basic Petrochemicals; Associate Managing Director of Programming of Pemex-Gas and Basic Petrochemicals; and Deputy Manager of Information of Pemex-Gas and Basic Petrochemicals. Other board memberships: Instalaciones Inmobiliarias para Industrias, S.A. de C.V.; I.I.I. Servicios, S.A. de C.V.; and Gasoductos de Chihuahua, S. de R.L. de C.V. | 2006 | ||||
Mr. Armando R. Arenas Briones | Deputy Director of Production Born: 1948 Business experience: Associate Managing Director and Superintendent of Nuevo Pemex petrochemical complex; and General Coordinator of Acquisitions Engineering of Petróleos Mexicanos. | 1996 | ||||
Mr. Víctor Domínguez Cuellar | Acting Deputy Director of Pipelines Born: 1959 Business experience: Associate Managing Director of Planning and Evaluation of Pemex-Gas and Basic Petrochemicals; Deputy Manager of Planning of Pemex-Gas and Basic Petrochemicals; and General Superintendent of Electromechanic Processes and Public Works of Pemex-Exploration and Production. Other board memberships: Gasoductos de Chihuahua, S. de R.L. de C.V.; Gasoductos de Tamaulipas, S. de R.L. de C.V.; Gasoductos Servicios, S. de R.L. de C.V.; and TDF, S. de R.L. de C.V. | 2007 | ||||
Mr. Francisco Arturo García Agraz Sánchez | Head of the Internal Control Body Born: 1961 Business experience: Regulatory Comptroller Director of Banco Santander, S. A., Institución de Banca Múltiple Grupo Financiero Santander; Director General of Estrategia Corporativa, S.A.; and Associate of Goodrich, Riquelme y Asociados, S.C. | 2007 |
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Name | Position with Pemex-Petrochemicals | Year Appointed | ||||
Mr. Jesús Reyes Heroles González Garza | Chairman of the Board of Pemex-Petrochemicals (refer to Petróleos Mexicanos) | 2006 | ||||
Mr. Roberto Ramírez Soberón | Board Member of Pemex-Petrochemicals refer to Pemex-Gas and Basic Petrochemicals) | 2006 | ||||
Mr. José Antonio Ceballos Soberanis | Board Member of Pemex-Petrochemicals (refer to Pemex-Refining) | 2006 | ||||
Mr. Carlos A. Morales Gil | Board Member of Pemex-Petrochemicals (refer to Pemex-Exploration and Production) | 2006 | ||||
Mr. Jordy H. Herrera Flores | Board Member of Pemex-Petrochemicals (refer to Pemex-Refining) | 2007 | ||||
Mr. Ernesto Cordero Arroyo | Board Member of Pemex-Petrochemicals (refer to Pemex-Exploration and Production) | 2007 | ||||
Mr. Dionisio Pérez-Jácome Friscione | Board Member of Pemex-Petrochemicals (refer to Pemex-Exploration and Production) | 2007 | ||||
Mr. Raúl Alejandro Livas Elizondo | Board Member of Pemex-Petrochemicals (refer to Petróleos Mexicanos) | 2007 | ||||
Mr. Rafael Beverido Lomelín | Director General Born: 1942 Business experience: Director General and other positions in Industrias Negromex, S.A. de C.V. and several positions in Grupo DESC, S.A. de C.V. | 2001 | ||||
Mr. Lorenzo Aldeco Ramírez | Deputy Director of Trading Born: 1955 Business experience: Deputy Director of Operations of Pemex-Petrochemicals; Deputy Director of Planning of Pemex-Petrochemicals; and Operations Manager of Servicios de Operaciones de Nitrógeno, S.A. de C.V. | 2005 | ||||
Mr. Abraham Klip Moshinsky | Deputy Director of Planning Born: 1956 Business Experience: Consultant of Pemex-Petrochemicals’ project of the Instituto Mexicano del Petróleo; Director General and Partner of Blindajes Automundo, S.A. de C.V.; and Assistant Director of Carrocerías y Adaptaciones Automotrices, S.A. de C.V. | 2002 | ||||
Mr. Mario Hugo González Petrikowsky | Deputy Director of Management and Finance Born: 1937 Business experience: Associate Managing Director of Budgeting of Petróleos Mexicanos; Advisor to the Deputy Direction of Programming and Budgeting of Petróleos Mexicanos; and Deputy Director of Planning of Pemex-Petrochemicals. | 2001 |
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Name | Position with Pemex-Petrochemicals | Year Appointed | ||||
Mr. Francisco Arturo Arellano Urbina | Deputy Director of Operations Born: 1946 Business experience: Director of Petroquímica Cangrejera, S.A. de C.V.; Director General of Micosa División Construcciones, S.A. de C.V.; and Director General of RCR Ingenieros Asociados, S.A. de C.V. | 2005 | ||||
Mr. Carlos Xavier Pani Espinosa | Executive Director of Petrochemical Projects Born: 1947 Business experience: Deputy Director of Trading of Pemex-Refining; Deputy Director of Trading of Pemex-Petrochemicals; and Director General of C.P. Estrategia y Servicios, S.A. de C.V. | 2007 | ||||
Mr. Héctor Alberto Acosta Félix | Head of the Internal Control Body Born: 1969 Business experience: Internal Comptroller in the Federal Competition Commission; Internal Comptroller in the Ministry of Energy; and Chief of Staff of the Secretary of the Public Function. | 2007 |
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At December 31, | 2006 | |||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | % of Total | |||||||||||||||||||
Pemex-Refining | 47,341 | 46,692 | 44,899 | 45,335 | 45,494 | 32.2 | ||||||||||||||||||
Pemex-Exploration and Production | 44,658 | 46,322 | 47,975 | 48,371 | 48,767 | 34.5 | ||||||||||||||||||
Pemex-Petrochemicals | 14,360 | 14,203 | 13,895 | 13,939 | 14,045 | 9.9 | ||||||||||||||||||
Pemex-Gas and Basic Petrochemicals | 11,977 | 12,104 | 11,923 | 12,018 | 12,562 | 8.9 | ||||||||||||||||||
Petróleos Mexicanos | 18,798 | 18,894 | 19,030 | 19,508 | 20,407 | 14.5 | ||||||||||||||||||
Total | 137,134 | 138,215 | 137,722 | 139,171 | 141,275 | 100.0 | ||||||||||||||||||
PMI Group | 330 | 318 | 320 | 312 | 307 |
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Item 7. | Major Shareholders and Related Party Transactions |
Item 8. | Financial Information |
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• | On December 5, 2005, Impulsora filed anamparobefore theJuzgado Quinto de Distrito en Materia Administrativa(Fifth Administrative District Court) in the state of Jalisco in connection with a constitutional claim related to a proposed model franchise agreement, which proceeding has been joined with a pending proceeding filed by Bardahl de México, S.A. de C.V., a competitor in the lubricants market. As of the date of this report, a constitutional hearing on these matters is still pending. | |
• | On December 26, 2005, Pemex-Refining filed a claim against MexLub before theJuzgado Segundo de Distrito en Materia Civil(Second Civil District Court) in the state of Jalisco to compel Impulsora to convene a general shareholders’ meeting. As of the date of this report, a final judgment is still pending. | |
• | On June 7, 2006, Pemex-Refining filed a criminal complaint before the Office of the Federal Attorney General for fraud allegedly committed by members of the board of directors of MexLub. As of the date of this report, the matter is still under investigation. | |
• | On October 17, 2006, Pemex-Refining filed a claim against Impulsora before theJuzgado Octavo de Distrito en Materia Civil(Eighth Civil District Court) in Mexico City, pursuant to which Pemex-Refining is seeking to enforce its contractual right to exercise a purchase option of the MexLub shares owned by Impulsora. Impulsora has filed a counterclaim asserting that Pemex-Refining does not have such right under the relevant agreement. On June 20, 2007, Pemex-Refining filed a response to this counterclaim. The trial is currently in the evidentiary stage. | |
• | In addition to other administrative proceedings before the Federal Commission of Competition (the “Commission”), on July 10, 2003, the Commission issued a resolution(No. IO-62-97) (the “Resolution”) prohibiting Pemex-Refining from engaging in anti-competitive practices as a result of the exercise of a contractual right of exclusivity under certain agreements, including the obligation to amend such agreements in order to eliminate the obligations of service stations to sell exclusively those lubricants authorized by Pemex-Refining. The Resolution originally imposed a six-month compliance deadline, and included the imposition of a fine on Pemex-Refining of 1,500 daily minimum wages units per day until such agreements were brought into compliance. Though Pemex-Refining is not contesting the Resolution, the compliance period is currently suspended as a result of an administrative appeal before the Commission filed by Impulsora, the resolution of which is still pending. |
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Item 9. | The Offer and Listing |
Item 10. | Additional Information |
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• | it has been incorporated under the laws of Mexico; | |
• | it maintains the principal administration of its business in Mexico; or | |
• | it has established its effective management in Mexico. |
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• | the relevant notes or bonds are registered with the Special Section of the National Registry of Securities maintained by the National Banking and Securities Commission; | |
• | the notes or bonds are placed outside of Mexico through banks or brokerage houses in a country that has entered into a treaty to avoid double taxation with Mexico; and | |
• | the issuer duly complies with the information requirements established in the general rules issued by the Ministry of Finance and Public Credit for such purposes. |
• | such fund is duly organized pursuant to the laws of its country of origin and is the effective beneficiary of the interest payment; | |
• | the income from such interest payment is exempt from income tax in such country of residence; and | |
• | such fund is registered with the Ministry of Finance and Public Credit for that purpose. |
• | pay Additional Amounts (as defined in the Indenture dated September 18, 1997, between Petróleos Mexicanos and Deutsche Bank (the 1997 Indenture)) to the holders of the 1997 Securities in respect of the Mexican withholding taxes mentioned above; | |
• | pay Additional Amounts (as defined in the Indenture dated August 7, 1998, between Petróleos Mexicanos and Deutsche Bank (the 1998 Indenture)) to the holders of the 1998 Securities in respect of the Mexican withholding taxes mentioned above; | |
• | pay Additional Amounts (as defined in the Indenture dated as of July 31, 1999, between Petróleos Mexicanos and Deutsche Bank) to the holders of the Puttable Notes; | |
• | pay Additional Amounts (as defined in the Indenture dated as of July 15, 1999, between Petróleos Mexicanos and Deutsche Bank) to the holders of the POMESSM in respect of the Mexican withholding taxes described above; | |
• | pay Additional Amounts (as defined in the Indenture dated as of July 31, 2000, among the Pemex Project Funding Master Trust, Petróleos Mexicanos and Deutsche Bank) to the holders of the 2001 Securities, the 2003 Securities and the 2004 Securities in respect of the Mexican withholding taxes described above; and | |
• | pay Additional Amounts (as defined in the Indenture dated as of December 30, 2004, among the Pemex Project Funding Master Trust, Petróleos Mexicanos and Deutsche Bank) to the holders of the 2006 Securities in respect of the Mexican withholding taxes described above. |
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• | for debt obligations, this table presents principal cash flows and related weighted average interest rates for fixed and variable rate debt; | |
• | for interest-rate swaps and other derivatives, this table presents notional amounts and weighted average interest rates by expected (contractual) maturity dates; | |
• | weighted average variable rates are based on implied forward rates in the yield curve at the reporting date; | |
• | fair values are obtained from market quotes received from market sources such as Reuters, Telerate and Bloomberg; | |
• | where quotes are not available, fair value is calculated internally, discounting from the corresponding zero coupon yield curve in the original currency; | |
• | for all instruments, the tables show the contract terms in order to determine future cash flows categorized by expected maturity dates; | |
• | the information is presented in equivalents of the peso, which is our reporting currency; and | |
• | each instrument’s actual cash flows are denominated in U.S. dollars or other foreign currencies as indicated in parentheses. |
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Year of Expected Maturity Date | ||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||
Carrying | ||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Value | Fair Value | |||||||||||||||||||||||||
(in thousands of nominal pesos) | ||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Outstanding debt | ||||||||||||||||||||||||||||||||
Fixed rate (U.S. dollars) | 17,186,531 | 33,817,143 | 36,775,318 | 15,620,976 | 24,692,926 | 87,062,411 | 215,155,305 | 239,973,242 | ||||||||||||||||||||||||
Average Interest Rate(%) | 7.6256 | % | ||||||||||||||||||||||||||||||
Fixed rate (Japanese yen) | 1,904,417 | 2,019,756 | 2,019,756 | 1,162,535 | 524,943 | 5,184,790 | 12,816,197 | 13,735,599 | ||||||||||||||||||||||||
Average Interest Rate(%) | 2.5299 | % | ||||||||||||||||||||||||||||||
Fixed rate (British pounds) | — | — | — | — | — | 8,522,440 | 8,522,440 | 9,316,288 | ||||||||||||||||||||||||
Average Interest Rate(%) | 7.5000 | % | ||||||||||||||||||||||||||||||
Fixed rate (Pesos) | 1,027,500 | 1,027,500 | 0 | 6,172,000 | 2,000,000 | 23,296,813 | 33,523,813 | 31,114,419 | ||||||||||||||||||||||||
Average Interest Rate(%) | 9.3574 | % | ||||||||||||||||||||||||||||||
Fixed rate (Euro) | 12,711,765 | 758 | 758 | 10,744,358 | 758 | 33,665,250 | 57,123,647 | 60,184,433 | ||||||||||||||||||||||||
Average Interest Rate(%) | 6.4560 | % | ||||||||||||||||||||||||||||||
Total fixed rate debt | 32,830,213 | 36,865,157 | 38,795,832 | 33,699,869 | 27,218,627 | 157,731,704 | 327,141,402 | 354,323,981 | ||||||||||||||||||||||||
Variable rate (U.S. dollars) | 12,586,181 | 13,232,581 | 15,278,123 | 25,500,577 | 25,332,922 | 64,978,048 | 156,908,432 | 159,736,059 | ||||||||||||||||||||||||
Variable rate (Swiss francs) | — | |||||||||||||||||||||||||||||||
Variable rate (Euro) | — | 1,479,628 | — | — | — | — | 1,479,628 | 1,735,801 | ||||||||||||||||||||||||
Variable rate (pesos) | 16,916,944 | 3,916,944 | 13,944,445 | 13,912,600 | 8,300,000 | 25,287,400 | 82,278,333 | 84,048,707 | ||||||||||||||||||||||||
Total variable rate debt | 29,503,125 | 18,629,153 | 29,222,568 | 39,413,177 | 33,632,922 | 90,265,448 | 240,666,393 | 245,520,567 | ||||||||||||||||||||||||
Total Debt | 62,333,338 | 55,494,310 | 68,018,400 | 73,113,046 | 60,851,549 | 247,997,152 | 567,807,795 | 599,844,547 | ||||||||||||||||||||||||
(1) | The information in this table has been calculated using exchange rates at December 31, 2006 of Ps. 10.8810 = U.S. $1.00; Ps. .0913 = 1.00 Japanese yen; Ps. 21.3061 = 1.00 British pound; and Ps. 14.3248 = 1.00 Euro. |
Year of Expected Maturity Date | ||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||
Notional | Fair | |||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Amount | Value(2) | |||||||||||||||||||||||||
(in thousands of nominal pesos) | ||||||||||||||||||||||||||||||||
Hedging Instruments | ||||||||||||||||||||||||||||||||
Interest Rate Swaps (U.S. Dollar) | ||||||||||||||||||||||||||||||||
Variable to Fixed | 413,559 | 413,559 | 413,559 | 413,559 | — | — | 1,654,235 | 10,787 | ||||||||||||||||||||||||
Average pay rate | 4.94 | % | 4.94 | % | 4.94 | % | 4.94 | % | — | — | ||||||||||||||||||||||
Average receive rate | 5.39 | % | 5.05 | % | 4.90 | % | 4.94 | % | — | — | ||||||||||||||||||||||
Interest Rate Swaps (Mexican Pesos) | ||||||||||||||||||||||||||||||||
Variable to Fixed | 2,472,500 | 2,472,500 | 5,000,000 | 600,000 | 1,200,000 | 8,700,000 | 20,445,000 | (2,188,440 | ) | |||||||||||||||||||||||
Average pay rate | 10.51 | % | 10.52 | % | 10.83 | % | 10.94 | % | 10.94 | % | 11.03 | % | ||||||||||||||||||||
Average receive rate | 7.40 | % | 7.41 | % | 7.55 | % | 7.69 | % | 7.88 | % | 8.09 | % | ||||||||||||||||||||
Cross Currency Swaps | ||||||||||||||||||||||||||||||||
Receive Euro / | ||||||||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||
Pay U.S. dollars | 12,759,477 | 1,503,229 | — | 10,641,618 | — | 32,646,264 | 57,550,588 | 1,731,648 | ||||||||||||||||||||||||
Receive Japanese Yen/ | ||||||||||||||||||||||||||||||||
Pay U.S. dollars | 1,857,786 | 1,978,034 | 1,978,034 | 1,150,819 | 575,294 | 5,288,063 | 12,828,029 | (933,726 | ) | |||||||||||||||||||||||
Receive British pounds/ | ||||||||||||||||||||||||||||||||
Pay U.S. dollars | — | — | — | — | — | 7,427,262 | 7,427,262 | 1,247,753 | ||||||||||||||||||||||||
Non-Hedging Instruments | ||||||||||||||||||||||||||||||||
Interest Rate Swaps | ||||||||||||||||||||||||||||||||
Variable to fixed | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Average pay rate(%) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Average receive rate(%) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total | — | — | — | — | — | — | — | — |
(1) | The information in this table has been calculated using exchange rates at December 31, 2006 of Ps. 10.8810 = U.S. $1.00. | |
(2) | Positive numbers represent a favorable fair value to PEMEX. |
Item 12. | Description of Securities Other than Equity Securities |
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Item 13. | Defaults, Dividend Arrearages and Delinquencies |
Item 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. | Controls and Procedures |
• | In December 2005, we reassigned the roles and responsibilities of personnel in the accounting department to ensure that the personnel responsible for the preparation of the financial information are not also responsible for the supervision and review of the financial information and the authorization of its release. | |
• | During 2006, we implemented effective procedures designed to ensure a consistent and effective process of preparation and documentation of the condensed consolidating financial information presented in the notes to our consolidated financial statements. In particular, we formalized specific controls, procedures and requirements for preparing and documenting the condensed consolidating financial information relating to Petróleos Mexicanos, the subsidiary guarantors, the non-guarantor subsidiaries and the Master Trust through the preparation of handbooks. These controls over financial reporting are designed to ensure that the condensed consolidating financial statements presented in the notes to our consolidated financial statements are appropriately prepared and presented in our consolidated financial statements. | |
• | In 2006, we also strengthened our supervision and review of the preparation and presentation of our condensed consolidating financial information through compliance with the roles and responsibilities described above and through increased monitoring during the preparation and supervision phases before final authorization of this information for its release. | |
• | In 2006, we also implemented and performed additional analyses and other post-closing procedures to ensure that our consolidated financial statements are prepared in accordance with Mexican FRS. |
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Item 16A. | Audit Committee Financial Expert |
Item 16B. | Code of Ethics |
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Item 16C. | Principal Accountant Fees and Services |
Year ended December 31, | ||||||||
2005 | 2006 | |||||||
(in thousands of nominal pesos) | ||||||||
Audit fees | Ps. | 31,468 | Ps. | 29,831 | ||||
Audit-related fees | 813 | 791 | ||||||
Tax fees | 2,086 | 2,429 | ||||||
Other fees | 0 | 22,303 | ||||||
Total fees | Ps. | 34,367 | Ps. | 55,354 | ||||
Item 16D. | Exemptions from the Listing Standards for Audit Committees. |
Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers. |
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Item 17. | Financial Statements. |
Item 18. | Financial Statements. |
Item 19. | Exhibits. |
1 | .1 | Ley Orgánica de Petróleos Mexicanos y Organismos Subsidiarios(the Organic Law of Petróleos Mexicanos and Subsidiary Entities), as amended effective January 1, 1994 (previously filed as Exhibit 3.1 to Petróleos Mexicanos’ Registration Statement on Form F-1 (File No. 33-86304) on November 14, 1994 and incorporated by reference herein). | ||
1 | .2 | Reglamento de la Ley Orgánica de Petróleos Mexicanos(Regulations to the Organic Law of Petróleos Mexicanos), together with an English translation (previously filed as Exhibit 3.2 to Petróleos Mexicanos’ Registration Statement on Form F-1 (File No. 33-86304) on November 14, 1994 and incorporated by reference herein). | ||
1 | .3 | Reglamento de Gas Natural(Natural Gas Regulation), effective November 9, 1995 together with an English translation (previously filed as Exhibit 1 to Petróleos Mexicanos’ annual report on Form 20-F (File No. 0-99) on June 28, 1996 and incorporated by reference herein). | ||
1 | .4 | Decreto por el que se Reforma la Ley Reglamentaria del Artículo 27 Constitucional en el Ramo del Petróleo(Decree that Amends the Regulatory Law to Article 27 of the Political Constitution of the United Mexican States Concerning Petroleum Affairs), effective November 14, 1996 (previously filed as Exhibit 1 to Petróleos Mexicanos’ annual report on Form 20-F (File No. 0-99) on June 30, 1997 and incorporated by reference herein). | ||
1 | .5 | Decreto por el que se adiciona el Reglamento de la Ley Orgánica de Petróleos Mexicanos(Decree that adds to the Regulations to the Organic Law of Petróleos Mexicanos), together with an English translation, effective April 30, 2001 (previously filed as Exhibit 1.5 to Petróleos Mexicanos’ annual report on Form 20-F (File No. 0-99) on June 28, 2001 and incorporated by reference herein). | ||
1 | .6 | Ley Orgánica de Petróleos Mexicanos y Organismos Subsidiarios(the Organic Law of Petróleos Mexicanos and Subsidiary Entities), as amended effective January 16, 2002 (English translation) (previously filed as Exhibit 1.6 to Amendment No. 1 to Petróleos Mexicanos’ annual report on Form 20-F/A (File No. 0-99) on November 15, 2002 and incorporated by reference herein). | ||
1 | .7 | Decreto por el que se adicionan dos párrafos al artículo 6o. de la Ley Reglamentaria del artículo 27 Constitucional en el Ramo del Petróleo y se reforma el tercer párrafo y adiciona un último párrafo al artículo 3o de la Ley Orgánica de Petróleos Mexicanos y Organismos Subsidiarios(Decree that adds two paragraphs to Article 6 of the Regulatory Law to Article 27 of the Political Constitution of the United Mexican States Concerning Petroleum Affairs and amends the third paragraph and adds a last paragraph to Article 3 of the Organic Law of Petróleos Mexicanos and Subsidiary Entities) together with an English translation, effective January 13, 2006 (previously filed as Exhibit 1.7 to Petroleós Mexicanos’ annual report on Form 20-F (File No. 0-99) on June 30, 2006 and incorporated by reference herein). | ||
2 | .1 | Indenture, dated as of September 18, 1997, between Petróleos Mexicanos and Bankers Trust Company (previously filed as Exhibit 4.1 to Petróleos Mexicanos’ Registration Statement on Form F-4 (File No. 333-7796) on October 17, 1997 and incorporated by reference herein). | ||
2 | .2 | Indenture, dated August 7, 1998, between Petróleos Mexicanos and Bankers Trust Company (previously filed as Exhibit 4.1 to Petróleos Mexicanos’ Registration Statement on Form F-4 on August 11, 1998 and incorporated by reference herein). | ||
2 | .3 | Indenture, dated July 15, 1999, between Petróleos Mexicanos and Bankers Trust Company (previously filed as Exhibit 4.1 to Petróleos Mexicanos’ Registration Statement on Form F-4 (File No. 333-10706) on August 23, 1999 and incorporated by reference herein). |
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2 | .4 | Indenture, dated July 31, 1999, between Petróleos Mexicanos and Bankers Trust Company (previously filed as Exhibit 4.1 to Petróleos Mexicanos’ Registration Statement on Form F-4 (File No. 333-10706) on September 29, 1999 and incorporated by reference herein). | ||
2 | .5 | Indenture, dated as of July 31, 2000, among Pemex Project Funding Master Trust, Petróleos Mexicanos and Bankers Trust (previously filed as Exhibit 2.5 to Petróleos Mexicanos’ annual report on Form 20-F (File No. 0-99) on June 28, 2001 and incorporated by reference herein). | ||
2 | .6 | Indenture, dated as of February 3, 2003, between Petróleos Mexicanos and Deutsche Bank Trust Company Americas (previously filed as Exhibit 4.7 to Petróleos Mexicanos’ Registration Statement on Form F-4 (File No. 333-102993) on February 12, 2003 and incorporated by reference herein). | ||
2 | .7 | Indenture, dated as of December 30, 2004 among Pemex Project Funding Master Trust, Petróleos Mexicanos and Deutsche Bank Trust Company Americas (previously filed as Exhibit 2.7 to Petróleos Mexicanos’ Annual Report on Form 20-F on June 30, 2005 and incorporated by reference herein). | ||
2 | .8 | Fiscal Agency Agreement between Petróleos Mexicanos and Bankers Trust, dated as of June 16, 1993, and amended and restated as of February 26, 1998 (previously filed as Exhibit 3.1 to Petróleos Mexicanos’ annual report on Form 20-F (File No. 0-99) on June 29, 2000 and incorporated by reference herein). | ||
2 | .9 | Trust Agreement, dated as of November 10, 1998, among The Bank of New York, The Bank of New York (Delaware) and Petróleos Mexicanos (previously filed as Exhibit 3.1 to Petróleos Mexicanos’ annual report on Form 20-F (File No. 0-99) on June 30, 1999 and incorporated by reference herein). | ||
2 | .10 | Amendment No. 1, dated as of November 17, 2004, to the Trust Agreement among The Bank of New York, The Bank of New York (Delaware) and Petróleos Mexicanos (previously filed as Exhibit 2.10 to Petróleos Mexicanos’ Annual Report on Form 20-F on June 30, 2005 and incorporated by reference herein). | ||
2 | .11 | Amendment No. 2, dated as of December 22, 2004, to the Trust Agreement among The Bank of New York, The Bank of New York (Delaware) and Petróleos Mexicanos (previously filed as Exhibit 2.11 to Petróleos Mexicanos’ Annual Report on Form 20-F on June 30, 2005 and incorporated by reference herein). | ||
2 | .12 | Amendment No. 3, dated as of August 17, 2006, to the Trust Agreement among The Bank of New York, The Bank of New York (Delaware) and Petróleos Mexicanos (previously filed as Exhibit 3.4 to the Petróleos Mexicanos Registration Statement on Form F-4/A (File No. 333-136674) on October 27, 2006 and incorporated by reference herein). | ||
2 | .13 | Assignment and Indemnity Agreement, dated as of November 10, 1998, among Petróleos Mexicanos, Pemex-Exploración y Producción, Pemex-Refinación, Pemex-Gas y Petroquímica Básica and Pemex Project Funding Master Trust, (previously filed as Exhibit 3.2 to Petróleos Mexicanos’ annual report on Form 20-F (File No. 0-99) on June 30, 1999 and incorporated by reference herein). | ||
2 | .14 | Amendment No. 1, dated as of August 17, 2006, to the Assignment and Indemnity Agreement among Petróelos Mexicanos, Pemex-Exploración y Producción, Pemex-Refinación, Pemex-Gas y Petroquímica Básica and Pemex Project Funding Master Trust, (previously filed as Exhibit 4.7 to the Petróleos Mexicanos Registration Statement on Form F-4/A (File No. 333-136674) on October 27, 2006 and incorporated by reference herein). | ||
2 | .15 | Guaranty Agreement, dated July 29, 1996, among Petróleos Mexicanos, Pemex-Exploración y Producción, Pemex-Refinación and Pemex-Gas y Petroquímica Básica (previously filed as Exhibit 4.4 to Petróleos Mexicanos’ Registration Statement on Form F-4 (File No. 333-7796) on October 17, 1997 and incorporated by reference herein). | ||
The registrant agrees to furnish to the Securities and Exchange Commission, upon request, copies of any instruments that define the rights of holders of long-term debt of the registrant that are not filed as exhibits to this annual report. | ||||
4 | .1 | Agreement for the Financial Strengthening of Petróleos Mexicanos between the Federal Government of Mexico and Petróleos Mexicanos, together with a summary in English (previously filed as Exhibit 10.1 to Petróleos Mexicanos’ Registration Statement on Form F-1 (File No. 33-86304) on November 14, 1994 and incorporated by reference herein). | ||
4 | .2 | Amendment to the Agreement for the Financial Strengthening of Petróleos Mexicanos between the Federal Government of Mexico and Petróleos Mexicanos, dated December 18, 1997, together with an English translation (previously filed as Exhibit 10.1 to Amendment No. 1 to Petróleos Mexicanos’ annual report on Form 20-F/A (File No. 0-99) on July 20, 1998 and incorporated by reference herein). |
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4 | .3 | Receivables Purchase Agreement, dated as of December 1, 1998, by and among Pemex Finance, Ltd., P.M.I. Comercio Internacional, S.A. de C.V., P.M.I. Services, B.V. and Pemex-Exploración y Producción. (previously filed as Exhibit 3.3 to Petróleos Mexicanos’ annual report on Form 20-F (File No. 0-99) on June 30, 1999 and incorporated by reference herein). | ||
4 | .4 | Transfer of Funds Agreement, dated as of November 24, 2000, among Pemex Project Funding Master Trust, Petróleos Mexicanos and the Federal Government (English translation) (previously filed as Exhibit 4.4 to Amendment No. 1 to Petróleos Mexicanos’ annual report on Form 20-F/A (File No. 0-99) on November 15, 2002 and incorporated by reference herein). | ||
8 | .1 | For a list of subsidiaries, their jurisdiction of incorporation and the names under which they do business, see “Consolidated Structure of PEMEX” on page 3. | ||
10 | .1 | Consent letter of Ryder Scott Company, L.P. | ||
10 | .2 | Consent letters of Netherland, Sewell International, S. de R.L. de C.V. | ||
10 | .3 | Consent letter of DeGolyer and MacNaughton. | ||
12 | .1 | CEO Certification pursuant to Rule 13a-14(a)/15d-14(a). | ||
12 | .2 | CFO Certification pursuant to Rule 13a-14(a)/15d-14(a). | ||
13 | .1 | Certification pursuant to Rule 13a-14(b)/15d-14(b) and 18 U.S.C. § 1350. |
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By: | /s/ Esteban Levin Balcells |
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AND SUBSIDIARY COMPANIES
Table of Contents
AND SUBSIDIARY COMPANIES
Contents | Page | |
F1 and F2 | ||
Consolidated financial statements | ||
F3 | ||
F4 | ||
F5 | ||
F6 | ||
F-7 through F-105 |
Table of Contents
F-1
Table of Contents
F-2
Table of Contents
2006 | 2006 | 2005 | ||||||||||
(Unaudited) | ||||||||||||
ASSETS: | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents (Note 4) | U.S.$ | 17,340,670 | Ps. | 188,683,832 | Ps. | 125,724,053 | ||||||
Accounts, notes receivable and other—Net (Note 5) | 12,149,061 | 132,193,937 | 122,658,384 | |||||||||
Inventories—Net (Note 6) | 5,497,228 | 59,815,339 | 52,632,561 | |||||||||
Derivative financial instruments (Note 10) | 388,825 | 4,230,800 | 3,614,378 | |||||||||
18,035,114 | 196,240,076 | 178,905,323 | ||||||||||
Total current assets | 35,375,784 | 384,923,908 | 304,629,376 | |||||||||
Investments in shares (Note 8) | 2,901,762 | 31,574,076 | 27,642,009 | |||||||||
Properties, plant and equipment—Net (Note 7) | 65,296,223 | 710,488,205 | 669,307,823 | |||||||||
Intangible asset derived from the actuarial computation of labor obligations (Note 11) | 6,775,467 | 73,723,853 | 79,770,331 | |||||||||
Other assets—Net | 369,858 | 4,024,414 | 3,468,416 | |||||||||
Total assets | U.S.$ | 110,719,094 | Ps. | 1,204,734,456 | Ps. | 1,084,817,955 | ||||||
LIABILITIES: | ||||||||||||
Current liabilities: | ||||||||||||
Current portion of long-term debt (Note 9) | U.S.$ | 5,867,155 | Ps. | 63,840,513 | Ps. | 37,558,056 | ||||||
Suppliers | 3,286,353 | 35,758,809 | 32,215,474 | |||||||||
Accounts and accrued expenses payable | 1,292,476 | 14,063,436 | 10,803,337 | |||||||||
Taxes payable | 3,986,411 | 43,376,135 | 70,761,756 | |||||||||
Derivative financial instruments (Note 10) | 1,184,422 | 12,887,695 | 19,804,143 | |||||||||
Total current liabilities | 15,616,817 | 169,926,588 | 171,142,766 | |||||||||
Long-term liabilities: | ||||||||||||
Long-term debt (Note 9) | 46,454,780 | 505,474,457 | 521,923,673 | |||||||||
Reserve for dismantlement and abandonment activities, sundry creditors and others (Note 2h. and 2j.) | 2,791,233 | 30,371,411 | 26,762,274 | |||||||||
Reserve for retirement payments, pensions and seniority premiums (Note 11) | 41,777,191 | 454,577,611 | 390,890,192 | |||||||||
Deferred taxes (Note 2y.) | 407,189 | 4,430,625 | 2,057,891 | |||||||||
Total long-term liabilities | 91,430,393 | 994,854,104 | 941,634,030 | |||||||||
Total liabilities | 107,047,210 | 1,164,780,692 | 1,112,776,796 | |||||||||
Commitments and contingencies (Notes 12 and 13) | ||||||||||||
EQUITY (Note 14): | ||||||||||||
Certificates of Contribution “A” | 8,587,941 | 93,445,382 | 93,445,382 | |||||||||
Mexican Government increase in equity of Subsidiary Entities | 11,806,608 | 128,467,704 | 81,505,115 | |||||||||
Surplus in restatement of equity | 14,162,370 | 154,100,745 | 150,183,353 | |||||||||
Effect on equity from labor obligations | (4,280,485 | ) | (46,575,957 | ) | (28,387,730 | ) | ||||||
Derivative financial instruments | (156,096 | ) | (1,698,482 | ) | (6,781,520 | ) | ||||||
Accumulated losses: | ||||||||||||
From prior years | (30,607,279 | ) | (333,037,804 | ) | (238,549,139 | ) | ||||||
Net income (loss) for the year | 4,158,825 | 45,252,176 | (79,374,302 | ) | ||||||||
(26,448,454 | ) | (287,785,628 | ) | (317,923,441 | ) | |||||||
Total equity (deficit) | 3,671,884 | 39,953,764 | (27,958,841 | ) | ||||||||
Total liabilities and equity (deficit) | U.S.$ | 110,719,094 | Ps. | 1,204,734,456 | Ps. | 1,084,817,955 | ||||||
F-3
Table of Contents
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF OPERATIONS
2006 | 2006 | 2005 | 2004 | |||||||||||||
(Unaudited) | ||||||||||||||||
Net sales: | ||||||||||||||||
Domestic | U.S.$ | 50,247,035 | Ps. | 546,737,992 | Ps. | 525,582,776 | Ps. | 482,783,367 | ||||||||
Export | 47,399,757 | 515,756,752 | 440,700,886 | 348,985,898 | ||||||||||||
97,646,792 | 1,062,494,744 | 966,283,662 | 831,769,265 | |||||||||||||
Other revenues—Net | 6,409,473 | 69,741,475 | 12,316,876 | 11,993,307 | ||||||||||||
Total revenues | 104,056,265 | 1,132,236,219 | 978,600,538 | 843,762,572 | ||||||||||||
Costs of sales and operating expenses: | ||||||||||||||||
Cost of sales | 37,046,731 | 403,105,475 | 375,816,940 | 283,969,084 | ||||||||||||
Transportation and distribution expenses | 2,207,406 | 24,018,790 | 22,798,899 | 18,896,087 | ||||||||||||
Administrative expenses | 4,964,809 | 54,022,083 | 48,697,351 | 39,466,726 | ||||||||||||
Total cost and operating expenses | 44,218,946 | 481,146,348 | 447,313,190 | 342,331,897 | ||||||||||||
Comprehensive financing cost: | ||||||||||||||||
Interest—Net | (3,205,953 | ) | (34,883,974 | ) | (39,997,445 | ) | (24,862,817 | ) | ||||||||
Exchange (loss) gain—Net | (218,829 | ) | (2,381,079 | ) | 18,342,105 | (3,731,785 | ) | |||||||||
Gain on monetary position | 1,312,595 | 14,282,349 | 16,994,452 | 21,016,352 | ||||||||||||
(2,112,187 | ) | (22,982,704 | ) | (4,660,888 | ) | (7,578,250 | ) | |||||||||
Income before taxes, duties and cumulative effect of adoption of new accounting standards | 57,725,133 | 628,107,167 | 526,626,460 | 493,852,425 | ||||||||||||
Taxes and duties (Note 17): | ||||||||||||||||
Hydrocarbon extraction duties and others | 51,994,678 | 565,754,090 | 518,570,670 | 412,208,362 | ||||||||||||
Excess gain duties | 728,415 | 7,925,886 | 58,664,538 | 36,980,005 | ||||||||||||
Hydrocarbon income tax | 435,328 | 4,736,803 | 2,057,889 | — | ||||||||||||
Income tax | 407,886 | 4,438,212 | 3,837,429 | 2,001,458 | ||||||||||||
Special tax on production and services (IEPS Tax) | — | — | 21,033,414 | 58,819,245 | ||||||||||||
53,566,307 | 582,854,991 | 604,163,940 | 510,009,070 | |||||||||||||
Cumulative effect of adoption of new accounting standards (Notes 2i., 2l. and 2t.) | — | — | (1,836,822 | ) | (11,256,511 | ) | ||||||||||
Net income (loss) for the year | U.S. $ | 4,158,825 | Ps. | 45,252,176 | (Ps. | 79,374,302 | ) | (Ps. | 27,413,156 | ) | ||||||
F-4
Table of Contents
Mexican | ||||||||||||||||||||||||||||||||
Government | ||||||||||||||||||||||||||||||||
increase | Retained earnings | |||||||||||||||||||||||||||||||
Certificates of | Surplus in | in equity of | Derivative | Effect on equity | (Accumulated losses) | |||||||||||||||||||||||||||
Contribution | restatement | Subsidiary | financial | from labor | From prior | |||||||||||||||||||||||||||
‘‘A” | of equity | Entities | instruments | obligations | years | For the year | Total | |||||||||||||||||||||||||
Balances at December 31, 2003 | Ps. | 93,445,382 | Ps. | 147,324,248 | Ps. | — | Ps. | — | Ps. | — | (Ps. | 142,930,294 | ) | (Ps. | 45,969,705 | ) | Ps. | 51,869,631 | ||||||||||||||
Transfer to prior years’ accumulated losses | (45,969,705 | ) | 45,969,705 | — | ||||||||||||||||||||||||||||
Minimum guaranteed dividends paid to the Mexican Government approved by the Board of Directors on May 12, 2004 | (11,169,118 | ) | (11,169,118 | ) | ||||||||||||||||||||||||||||
Increase in equity of the Subsidiary Entities made by the Mexican Government | 35,092,223 | 35,092,223 | ||||||||||||||||||||||||||||||
Comprehensive (loss) for the year (Note 15) | (5,028,681 | ) | (7,500,232 | ) | (27,413,156 | ) | (39,942,069 | ) | ||||||||||||||||||||||||
Balances at December 31, 2004 | 93,445,382 | 142,295,567 | 35,092,223 | — | (7,500,232 | ) | (200,069,117 | ) | (27,413,156 | ) | 35,850,667 | |||||||||||||||||||||
Transfer to prior years’ accumulated losses | (27,413,156 | ) | 27,413,156 | — | ||||||||||||||||||||||||||||
Minimum guaranteed dividends paid to the Mexican Government approved by the Board of Directors on May 18, 2005 | (11,066,866 | ) | (11,066,866 | ) | ||||||||||||||||||||||||||||
Increase in equity of the Subsidiary Entities made by the Mexican Government | 46,412,892 | 46,412,892 | ||||||||||||||||||||||||||||||
Comprehensive income (loss) for the year (Note 15) | 7,887,786 | (6,781,520 | ) | (20,887,498 | ) | (79,374,302 | ) | (99,155,534 | ) | |||||||||||||||||||||||
Balances at December 31, 2005 | 93,445,382 | 150,183,353 | 81,505,115 | (6,781,520 | ) | (28,387,730 | ) | (238,549,139 | ) | (79,374,302 | ) | (27,958,841 | ) | |||||||||||||||||||
Transfer to prior years’ accumulated losses | (79,374,302 | ) | 79,374,302 | — | ||||||||||||||||||||||||||||
Minimum guaranteed dividends paid to the Mexican Government approved by the Board of Directors on May 18, 2006 | (15,798,732 | ) | (15,798,732 | ) | ||||||||||||||||||||||||||||
Increase in equity of the Subsidiary Entities made by the Mexican Government | 46,962,589 | 46,962,589 | ||||||||||||||||||||||||||||||
Comprehensive income (loss) for the year (Note 15) | 3,917,392 | 5,083,038 | (18,188,227 | ) | 684,369 | 45,252,176 | 36,748,748 | |||||||||||||||||||||||||
Balances at December 31, 2006 | Ps. | 93,445,382 | Ps. | 154,100,745 | Ps. | 128,467,704 | (Ps. | 1,698,482 | ) | (Ps. | 46,575,957 | ) | (Ps. | 333,037,804 | ) | Ps. | 45,252,176 | Ps. | 39,953,764 | |||||||||||||
Unaudited | U.S.$ | 8,587,941 | U.S.$ | 14,162,370 | U.S.$ | 11,806,608 | U.S. $ | 156,096 | U.S.$ | 4,280,485 | U.S.$ | 30,607,279 | U.S.$ | 4,158,825 | U.S.$ | 3,671,884 | ||||||||||||||||
F-5
Table of Contents
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
2006 | 2006 | 2005 | 2004 | |||||||||||||
(Unaudited) | ||||||||||||||||
Operating activities: | ||||||||||||||||
Net income (loss) for the year | U.S. | $4,158,825 | Ps. | 45,252,176 | (Ps. | 79,374,302 | ) | (Ps. | 27,413,156 | ) | ||||||
Charges to operations not requiring the use of funds: | ||||||||||||||||
Depreciation and amortization | 5,816,837 | 63,293,005 | 54,930,519 | 45,051,417 | ||||||||||||
Reserve for retirement payments, pensions and indemnities | 6,598,162 | 71,794,590 | 61,476,707 | 57,042,564 | ||||||||||||
Deferred taxes | 80,085 | 871,405 | 2,057,891 | — | ||||||||||||
Impairment | 62,289 | 677,770 | 1,380,787 | 3,953,224 | ||||||||||||
16,716,198 | 181,888,946 | 40,471,602 | 78,634,049 | |||||||||||||
Variances in: | ||||||||||||||||
Accounts, notes receivable and other | (876,349 | ) | (9,535,554 | ) | 9,570,646 | (52,816,711 | ) | |||||||||
Inventories | (237,204 | ) | (2,581,018 | ) | (6,291,227 | ) | (7,375,692 | ) | ||||||||
Intangible asset derived from the actuarial computation of labor obligations and other assets | 504,593 | 5,490,480 | 5,555,094 | 35,376,579 | ||||||||||||
Suppliers | 325,644 | 3,543,335 | 6,063,519 | (11,783,951 | ) | |||||||||||
Accounts payable and accrued expenses | 299,614 | 3,260,099 | (13,798,982 | ) | 16,300,683 | |||||||||||
Taxes payable | (2,378,852 | ) | (25,884,292 | ) | 23,305,385 | 6,011,174 | ||||||||||
Reserve for dismantlement and abandonment activities, sundry creditors and others | 331,692 | 3,609,139 | (1,160,193 | ) | 5,623,264 | |||||||||||
Effect on equity from labor obligations | (1,671,558 | ) | (18,188,227 | ) | (20,887,498 | ) | (7,500,232 | ) | ||||||||
Reserve for retirement payments, pensions and indemnities and others | (745,076 | ) | (8,107,171 | ) | 1,191,910 | (52,032,817 | ) | |||||||||
Derivative financial instruments | (225,148 | ) | (2,449,832 | ) | 16,189,765 | — | ||||||||||
Funds provided by operating activities | 12,043,554 | 131,045,905 | 60,210,021 | 10,436,346 | ||||||||||||
Financing activities: | ||||||||||||||||
Minimum guaranteed dividends paid to the Mexican Government | (1,451,956 | ) | (15,798,732 | ) | (11,066,866 | ) | (11,169,118 | ) | ||||||||
Debt—Net | 903,707 | 9,833,241 | 63,504,986 | 63,768,535 | ||||||||||||
Increase in equity of Subsidiary Entities | 4,316,018 | 46,962,589 | 46,412,892 | 35,092,223 | ||||||||||||
Sale of future accounts receivable | — | — | (39,391,090 | ) | (6,366,787 | ) | ||||||||||
Funds provided by financing activities | 3,767,769 | 40,997,098 | 59,459,922 | 81,324,853 | ||||||||||||
Investing activities: | ||||||||||||||||
Increase in fixed assets—Net | (9,663,740 | ) | (105,151,157 | ) | (86,332,173 | ) | (83,450,801 | ) | ||||||||
(Increase) decrease in investment in shares | (361,370 | ) | (3,932,067 | ) | 1,130,740 | — | ||||||||||
Funds used in investing activities | (10,025,110 | ) | (109,083,224 | ) | (85,201,433 | ) | (83,450,801 | ) | ||||||||
Net increase in cash and cash equivalents | 5,786,213 | 62,959,779 | 34,468,510 | 8,310,398 | ||||||||||||
Cash and cash equivalents at beginning of the year | 11,554,457 | 125,724,053 | 91,255,543 | 82,945,145 | ||||||||||||
Cash and cash equivalents at end of the year | U.S. | $17,340,670 | Ps. | 188,683,832 | Ps. | 125,724,053 | Ps. | 91,255,543 | ||||||||
F-6
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
I. | Pemex-Exploration and Production explores for and produces crude oil and natural gas; additionally, this entity transports, stores and markets such products; | |
II. | Pemex-Refining refines petroleum products and derivatives thereof that may be used as basic industrial raw materials; additionally, this entity stores, transports, distributes and markets such products and derivatives; |
III. | Pemex-Gas and Basic Petrochemicals processes natural gas, natural gas liquids and derivatives thereof that may be used as basic industrial raw materials, and stores, |
F-7
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
transports, distributes and markets such products; additionally, this entity stores, transports, distributes and markets Basic Petrochemicals; and |
IV. | Pemex-Petrochemicals engages in industrial petrochemical processing and stores, distributes and markets Secondary Petrochemicals. |
F-8
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
NOTE 2— | SIGNIFICANT ACCOUNTING POLICIES: |
a. | Accounting basis for the preparation of financial information |
• | The NIFs and the CINIF’s interpretation of the NIFs; | |
• | the bulletins previously issued by theComisión de Principios de Contabilidad(Accounting Principles Commission or “CPC”) of theInstituto Mexicano de Contadores Publicos(Mexican Institute of Public Accountants, or “MIPA”), to the extent that they have not been modified, superseded or replaced by the new NIFs; and | |
• | IFRS when applicable, which supplement the NIFs. |
b. | Effects of inflation on the financial information |
F-9
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
c. | Consolidation |
F-10
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
d. | Long-term productive infrastructure projects (PIDIREGAS) |
e. | Exploration and drilling costs and specific oil-field exploration and depletion reserve |
f. | Marketable securities |
F-11
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
i. | Debt instruments to be held to maturity are valued at acquisition cost and are subsequently reduced by the amortization of any premiums or increased by the amortization of any discounts over the term of the debt instrument, in proportion to the outstanding balance. Any loss in value is recognized in the statement of operations at the end of each period. |
ii. | Financial instruments held for trading and available for sale are valued at fair value, which is similar to market value. The fair value is the value at which a financial asset can be exchanged or a financial liability can be liquidated between interested and willing parties in an arm’s-length transaction. The effect of the valuation of financial instruments is recorded in income for the year. |
g. | Inventory valuation |
I. | Crude oil and its derivatives thereof for export: at net realizable value, determined on the basis of average export prices at December 31, 2006 and 2005, less a provision for distribution expenses and shrinkage. | |
II. | Crude oil and its derivatives thereof for domestic sale: at cost, as calculated based on net realizable international market prices. | |
III. | Materials, spare parts and supplies: at the last purchase price. |
IV. | Materials in transit: at acquisition cost. |
h. | Properties, plant and equipment |
F-12
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
% | Years | |||||||
Buildings | 3 | 33 | ||||||
Plants and drilling equipment | 3 – 5 | 20 – 33 | ||||||
Furniture and fixtures | 10 | 10 | ||||||
Offshore platforms | 4 | 25 | ||||||
Transportation equipment | 4 – 20 | 5 – 25 | ||||||
Pipelines | 4 | 25 | ||||||
Software/computers | 10 – 25 | 4 – 10 |
i. | Impairment of the value of long-lived assets |
F-13
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
j. | Liabilities, provisions, contingent assets and liabilities and commitments |
k. | Foreign currency balances and transactions |
l. | Retirement benefits, pensions and seniority premiums |
F-14
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
m. | Equity |
n. | Surplus in the restatement of equity |
o. | Result on monetary position |
p. | Cost of sales |
q. | Taxes and federal duties |
F-15
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
r. | Special Tax on Production and Services (IEPS Tax) |
s. | Revenue recognition |
t. | Derivative financial instruments and hedging operations |
u. | Financial instruments with characteristics of liability, equity or both |
F-16
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
v. | Use of estimates |
w. | Comprehensive income (loss) |
x. | Comprehensive financing cost |
y. | Deferred taxes |
z. | Convenience translation |
F-17
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
NOTE 3— | FOREIGN CURRENCY POSITION: |
Amounts in foreign currency | ||||||||||||||||||||
(Thousands) | ||||||||||||||||||||
Asset (liability) | Year-end | |||||||||||||||||||
Assets | Liabilities | position | Exchange rate | Amounts in pesos | ||||||||||||||||
2006: | ||||||||||||||||||||
U.S. dollars | 20,872,208 | (46,944,810 | ) | (26,072,603 | ) | 10.8810 | (Ps. 283,695,983 | ) | ||||||||||||
Japanese yen | — | (150,040,948 | ) | (150,040,948 | ) | 0.0913 | (13,698,738 | ) | ||||||||||||
Pounds sterling | 711 | (401,812 | ) | (401,101 | ) | 21.3061 | (8,545,898 | ) | ||||||||||||
Euros | 23,635 | (4,201,854 | ) | (4,178,219 | ) | 14.3248 | (59,852,151 | ) | ||||||||||||
Swiss Francs | 562,443 | (443,338 | ) | 119,105 | 8.9064 | 1,060,797 | ||||||||||||||
Total liability position, before foreign currency hedging (Note 10) | (Ps. 364,731,973 | ) | ||||||||||||||||||
Amounts in foreign currency | ||||||||||||||||||||
(Thousands) | ||||||||||||||||||||
Asset (liability) | Year-end | |||||||||||||||||||
Assets | Liabilities | position | Exchange rate | Amounts in pesos | ||||||||||||||||
2005:(1) | ||||||||||||||||||||
U.S. dollars | 14,621,145 | (37,879,912 | ) | (23,258,767 | ) | 10.7777 | (Ps. 250,676,013 | ) | ||||||||||||
Japanese yen | — | (144,171,281 | ) | (144,171,281 | ) | 0.0914 | (13,177,255 | ) | ||||||||||||
Pounds sterling | 262 | (453,455 | ) | (453,193 | ) | 18.5247 | (8,395,264 | ) | ||||||||||||
Euros | 4,732 | (4,240,207 | ) | (4,235,475 | ) | 12.7080 | (53,824,416 | ) | ||||||||||||
Austrian shillings | — | (86 | ) | (86 | ) | 8.1744 | (703 | ) | ||||||||||||
Swiss francs | — | (41 | ) | (41 | ) | 8.1779 | (335 | ) | ||||||||||||
Canadian dollars | 2 | — | 2 | 9.2330 | 18 | |||||||||||||||
Total liability position, before foreign currency hedging (Note 10) | (Ps. 326,073,968 | ) | ||||||||||||||||||
(1) | The figures of December 31, 2005 in pesos are stated in thousands of Mexican pesos as of December 31, 2005 purchasing power (nominal value). |
F-18
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
NOTE 4— | CASH AND CASH EQUIVALENTS: |
2006 | 2005 | |||||||
Cash on hand and in banks | Ps. | 92,291,206 | Ps. | 46,380,413 | ||||
Marketable securities(1) | 96,392,626 | 79,343,640 | ||||||
Ps. | 188,683,832 | Ps. | 125,724,053 | |||||
(1) | Market securities include high liquid and low risk investments with maturities of three months or shorter. |
NOTE 5— | ACCOUNTS, NOTES RECEIVABLE AND OTHER: |
2006 | 2005 | |||||||
Sales-domestic | Ps. | 33,471,153 | Ps. | 36,456,907 | ||||
Sales-export | 18,914,468 | 13,421,256 | ||||||
Negative IEPS Tax pending to be credited (Note 17) | 12,888,490 | — | ||||||
Advance payments to Mexican Government of minimum guaranteed dividends (Note 14) | 259,245 | 15,902,901 | ||||||
Specific funds—Trade Commission (Note 14) | 34,300,437 | 27,939,631 | ||||||
Employees and officers | 3,059,881 | 2,836,782 | ||||||
Hydrocarbon excess extraction duties payment | 1,450,653 | — | ||||||
Other accounts receivable(1) | 30,426,900 | 28,712,207 | ||||||
134,771,227 | 125,269,684 | |||||||
Less allowance for doubtful accounts | (2,577,290 | ) | (2,611,300 | ) | ||||
Ps. | 132,193,937 | Ps. | 122,658,384 | |||||
(1) | Other accounts receivable include miscellaneous items such as sundry debtor accounts and other recoverable taxes. |
NOTE 6— | INVENTORIES: |
2006 | 2005 | |||||||
Crude oil, refined products, derivatives and petrochemical products | Ps. | 54,738,456 | Ps. | 45,884,931 | ||||
Materials and supplies in stock | 6,431,400 | 5,751,079 | ||||||
Materials and products in transit | 289,250 | 2,758,264 | ||||||
61,459,106 | 54,394,274 | |||||||
Less allowance for slow-moving and obsolete inventory | (1,643,767 | ) | (1,761,713 | ) | ||||
Ps. | 59,815,339 | Ps. | 52,632,561 | |||||
F-19
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
NOTE 7— | PROPERTIES, PLANT AND EQUIPMENT: |
2006 | 2005 | |||||||
Plants | Ps. | 344,419,538 | Ps. | 332,328,082 | ||||
Pipelines | 268,770,356 | 252,562,684 | ||||||
Wells | 397,573,306 | 350,004,307 | ||||||
Drilling equipment | 21,553,774 | 21,944,422 | ||||||
Buildings | 40,681,076 | 40,452,191 | ||||||
Offshore platforms | 134,179,581 | 119,387,232 | ||||||
Furniture and equipment | 33,548,608 | 32,376,054 | ||||||
Transportation equipment | 13,500,746 | 13,567,567 | ||||||
1,254,226,985 | 1,162,622,539 | |||||||
Less: | ||||||||
Accumulated depreciation and amortization | (668,178,314 | ) | (608,705,704 | ) | ||||
586,048,671 | 553,916,835 | |||||||
Land | 40,637,328 | 41,233,532 | ||||||
Construction in progress | 83,029,129 | 73,469,717 | ||||||
Fixed assets to be disposed of | 773,077 | 687,739 | ||||||
Total | Ps. | 710,488,205 | Ps. | 669,307,823 | ||||
a) | For the years ended December 31, 2006, 2005 and 2004, interest costs associated with fixed assets in the construction or installation phase that were capitalized as part of those assets totaled Ps. 6,742,842, Ps. 5,340,243 and Ps. 4,666,343, respectively. | |
b) | Depreciation of assets and amortization of wells for the periods ended December 31, 2006, 2005 and 2004 recorded in operating costs and expenses were Ps. 63,293,005, Ps. 54,930,519 and Ps. 45,051,417, respectively, which included Ps. 489,944, Ps. 1,321,071 and Ps. 337,914, respectively, related to dismantlement and abandonment costs. | |
c) | As of December 31, 2006 and 2005, the capitalized provision related to dismantlement and abandonment costs, net of accumulated amortization and determined based on the present value (discounted) of the projected cost, was Ps. 10,045,696 and Ps. 10,348,721, respectively. | |
d) | As of December 31, 2006 and 2005, PEMEX has recognized cumulative impairment charges in the value of the long-lived assets amounting to Ps. 14,065,107 and Ps. 13,387,337, respectively. Impairment for the periods ended December 31, 2006, 2005 and 2004 recorded in operating costs and expenses was Ps. 677,770, Ps. 1,380,787 and Ps. 3,953,244, respectively. |
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
NOTE 8— | INVESTMENT IN SHARES: |
Percentage of | Carrying value at December 31, | |||||||||
Investment | 2006 | 2005 | ||||||||
Repsol YPF, S.A.(1) | 5.00 | Ps. | 22,352,585 | Ps. | 19,320,068 | |||||
Deer Park Refining Limited(2) | 50.00 | 5,710,242 | 5,566,888 | |||||||
Instalaciones Inmobiliarias para Industrias, S.A. de C.V.(2) | 100.00 | 1,070,406 | 1,064,134 | |||||||
Servicios Aéreos Especializados Mexicanos, S.A. de C.V.(2) | 49.00 | 152,782 | 20,340 | |||||||
Other | 2,288,061 | 1,670,579 | ||||||||
Total investments | Ps. | 31,574,076 | Ps. | 27,642,009 | ||||||
(1) | Securities available for sale. | |
(2) | Accounted for using equity method. |
NOTE 9— | DEBT: |
a. | Petróleos Mexicanos obtained U.S. $56,241 in lines of credit granted by export credit agencies. These loans bear interest at fixed and variable rates with various maturity dates through 2012; | |
b. | Petróleos Mexicanos drew a total amount of U.S. $3,300,000 under its revolving credit lines. These credit lines may be utilized by Petróleos Mexicanos and the Master Trust; | |
c. | On February 13, 2006, the Master Trust completed an exchange offer pursuant to which the Master Trust issued notes with a principal amount totaling U.S. $185,310 in exchange for an equal principal amount of notes previously issued by Petróleos Mexicanos, through a reopening of an original exchange offer made in December 2004. As a result of this |
F-21
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
second exchange, the Master Trust issued new notes and subsequently received cash payments from Petróleos Mexicanos upon the cancellation of the Petróleos Mexicanos notes acquired by the Master Trust. The cash payments were made on the following dates and in the following amounts: |
June 1, 2006 | U.S.$ | 41,254 | ||
June 2, 2006 | 54,011 | |||
August 3, 2006 | 90,045 | |||
Total | U.S.$ | 185,310 | ||
a. | The Master Trust obtained credit lines from export credit agencies totaling U.S. $1,914,184 (Ps. 20,828,236) and U.S. $4,250,000 (Ps. 46,244,250) by refinancing a syndicated loan in two tranches of U.S. $1,500,000 (Ps. 16,321,500) and U.S. $2,750,000 (Ps. 29,922,750) due in five and seven years, respectively. | |
b. | On February 2, 2006, the Master Trust reopened two series of notes issued on June 8, 2005 under its Medium-Term Notes Program Series A in two tranches: U.S. $750,000 of 5.75% Notes due 2015, and U.S. $750,000 of 6.625% Notes due 2035, both of which are guaranteed by Petróleos Mexicanos. | |
c. | The Master Trust drew a total aggregate amount of U.S. $2,250,000 of its revolving credit lines guaranteed by Petróleos Mexicanos. These credit lines may be utilized by Petróleos Mexicanos and the Master Trust. |
F-22
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
a. | Petróleos Mexicanos obtained U.S. $59,882 (Ps. 651,576) in loans from export credit agencies. These loans bear interest at fixed and variable rates with various maturity dates through 2013. | |
b. | Petróleos Mexicanos issued short-term certificates totaling Ps. 16,000,000 (in nominal terms). All of these short-term certificates, as well as the balance as of December 31, 2004 of Ps. 2,000,000, were repaid during 2005. | |
c. | On October 26, 2005, Petróleos Mexicanos drew down U.S. $800,000 from its U.S. $1,250,000 syndicated revolving facility in two tranches, each in the amount of U.S. $400,000; these funds were repaid on December 28, 2005. |
a. | The Master Trust obtained credit lines from export credit agencies totaling U.S. $1,617,500 (Ps. 17,600,017) and U.S. $4,250,000 (Ps. 46,244,250) from a syndicated loan. | |
b. | On February 24, 2005, the Master Trust issued €1,000,000 (Ps. 14,324,800) of 5.50% Notes due 2025, guaranteed by Petróleos Mexicanos, under its Medium-Term Notes Program, Series A; | |
c. | On June 8, 2005, the Master Trust issued U.S. $1,500,000 (Ps. 16,321,500) under its Medium-Term Note Program, Series A, in two tranches: U.S. $1,000,000 (Ps. 10,881.000) of 5.75% Notes due 2015 and U.S. $500,000 (Ps. 5,440,500) of 6.625% Notes due 2035, both of which are guaranteed by Petróleos Mexicanos. |
d. | On August 31, 2005, the Master Trust issued U.S. $175,000 (Ps. 1,904,175) of Floating Rate Notes due 2008, which bear interest at a rate per annum equal to LIBOR for a period of one, two, three or six months (at the election of the Master Trust), plus 42.5 basis points, and are guaranteed by Petróleos Mexicanos. |
e. | On December 1, 2005, the Master Trust issued U.S. $750,000 (Ps. 8,160,750) of Floating Rate Notes due 2012 under its Medium-Term Note Program, Series A, which bear interest at the rate of three month LIBOR plus 60 basis points, and are guaranteed by Petróleos Mexicanos. |
a. | During 2005, the Master Trust delivered to Petróleos Mexicanos certain of the debt securities of Petróleos Mexicanos in exchange for cash payments, a portion of which will be made over time, equal to the market value of the relevant debt securities at the time of such delivery. The Master Trust had acquired these debt securities in its December 2004 exchange offer. The cash payments made by Petróleos Mexicanos at the time of acquisition of the debt securities was equal to the par value of such debt securities, plus accrued |
F-23
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
interest. Set forth below is the date of acquisition of the debt securities, as well as the cash payments made on such date: |
Par value of debt | ||||
Date of acquisition | securities | |||
April 29, 2005 | U.S.$ | 803,365 | ||
May 20, 2005 | 678,697 | |||
July 6, 2005 | 826,099 | |||
Total | U.S.$ | 2,308,161 | ||
The 2005 Inter-Company Premium totaled U.S. $432,349. The total amount of interest paid by Petróleos Mexicanos on the Inter-Company Premium in 2005 was equal to U.S. $7,224. |
b. | In March 2005, the Master Trust obtained a syndicated loan in the amount of U.S. $4,250,000. U.S. $2,020,800 related to new indebtedness, and the remaining U.S. $2,229,200 was used to refinance other syndicated credits. | |
c. | Of the U.S. $1,500,000 issued by the Master Trust on June 8, 2005, only U.S. $529,800 is considered new indebtedness, as the remaining U.S. $970,200 was used to refinance amounts prepaid under the Funds Derivative Agreement between Pemex-Exploration and Production and the Master Trust, arising from the redemption by Pemex Finance of four series of its outstanding notes in June 2005. |
a. | On February 1, 2005, Fideicomiso F/163 issued, under its expanded Ps. 70,000,000 peso-denominated publicly-traded notes (certificados bursatiles) program, approved by theComisión Nacional Bancaria y de Valores(the National Banking and Securities Commission or the “CNBV”), denominated inUnidades de Inversión (Units of Investment, or “UDI”) in the amount of UDI 1,697.6 million (Ps. 6,000,000) (in nominal terms) in the Mexican domestic market, with maturity in 2019, and guaranteed by Petróleos Mexicanos. | |
b. | On February 11, 2005, Fideicomiso F/163 issued, under its expanded Ps. 70,000,000 peso-denominated publicly-traded notes (certificados bursatiles) program, approved by the CNBV, a total of Ps. 15,000,000 of notes in the Mexican domestic market, guaranteed by Petróleos Mexicanos, consisting of two tranches: one of Ps. 7,500,000 of its notes due February 11, 2010, bearing interest at the91-dayCertificados de la Tesorería de la Federación(Mexican Government Treasury Bonds or “Cetes”) rate plus 51 basis points; and the other one of Ps. 7,500,000 of its notes due February 11, 2013, bearing interest at the182-dayCetesrate plus 57 basis points. | |
c. | On May 13, 2005, Fideicomiso F/163 issued, under its expanded Ps. 110,000,000 peso-denominated publicly-traded notes (certificados bursatiles) program, approved by the CNBV, a total of Ps. 10,000,000 of notes in the Mexican domestic market, guaranteed by Petróleos Mexicanos, consisting of two tranches: one of Ps. 5,012,600 of its notes due February 4, 2010, bearing interest at the91-dayCetes rate plus 51 basis points; and the |
F-24
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
other one of Ps. 4,987,400 of its notes due January 31, 2013, bearing interest at the182-dayCetes rate plus 57 basis points. |
d. | On July 29, 2005, Fideicomiso F/163 issued, under its Ps. 110,000,000 peso-denominated publicly-traded notes (certificados bursatiles) program, approved by the CNBV, a total of Ps. 5,000,000 of notes due 2015 in the Mexican domestic market, guaranteed by Petróleos Mexicanos, bearing interest at a fixed rate of 9.91%. |
e. | On October 21, 2005, Fideicomiso F/163 issued, under its Ps. 110,000,000 Publicly Traded Notes Program, approved by CNBV, a total of Ps. 4,500,000 of notes due 2015 in the Mexican domestic market, guaranteed by Petróleos Mexicanos, bearing interest at a fixed rate of 9.91%. |
f. | On October 21, 2005, Fideicomiso F/163 issued, under its Ps. 110,000,000 Publicly Traded Notes Program, approved by CNBV, a total of Ps. 5,500,000 of notes due 2011 in the Mexican domestic market, guaranteed by Petróleos Mexicanos, bearing interest at the91-dayCetesrate plus 35 basis points. |
• | The sale of substantial assets essential for the continued operations of the business; | |
• | Liens against its assets; and | |
• | Transfers, sales or assignments of rights to payment under contracts for the sale of crude oil or gas not yet earned, accounts receivable or other negotiable instruments. |
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||
Pesos | Foreign currency | Pesos | Foreign currency | |||||||||||||||||||||||||
Rate of Interest(1) | Maturity | (thousands) | (thousands) | (thousands) | (thousands) | |||||||||||||||||||||||
U.S. dollars: | ||||||||||||||||||||||||||||
Unsecured loans | Variable and LIBOR plus 0.8125% | 2006 | Ps. | — | — | Ps. | 1,201,788 | 107,163 | ||||||||||||||||||||
Unsecured loans | Variable and LIBOR plus 0.8125% | 2006 | — | — | 379,978 | 33,883 | ||||||||||||||||||||||
Bonds | Fixed from 4.5% to 10.61% and LIBOR plus 0.425% to 8.875% | Various to 2035 | 230,275,593 | 21,163,109 | 225,187,544 | 20,079,940 | ||||||||||||||||||||||
Financing assigned to PIDIREGAS | Fixed from 3.23% to 7.69% and LIBOR plus 0.03% to 2.25% | Various to 2017 | 73,848,945 | 6,786,963 | 64,006,691 | 5,707,467 | ||||||||||||||||||||||
Purchasing loans and project financing | Fixed from 3.32% to 7.28% and LIBOR plus 0.0625% to 2% | Various to 2014 | 3,112,247 | 286,026 | 3,873,874 | 345,433 | ||||||||||||||||||||||
Leasing contracts | Fixed from 8.05% to 9.91% | Various to 2012 | 764,893 | 70,296 | 1,710,827 | 152,554 | ||||||||||||||||||||||
External trade loans | LIBOR plus 0.5% to 0.9% | Various to 2012 | 46,897,110 | 4,310,000 | 49,007,594 | 4,370,000 | ||||||||||||||||||||||
Bank loans | Fixed from 5.44% to 5.58% LIBOR plus 0.55% to 1.9% | Various to 2018 | 6,800,625 | 625,000 | 11,607,062 | 1,035,000 | ||||||||||||||||||||||
Total financing in U.S. dollars | 361,699,613 | 33,241,394 | 356,975,358 | 31,831,440 | ||||||||||||||||||||||||
Euros: | ||||||||||||||||||||||||||||
Bonds | Fixed from 5.5% to 7.75%, and floating of 9.1045% | Various to 2025 | 58,597,515 | 4,090,634 | 54,090,836 | 4,090,634 | ||||||||||||||||||||||
Unsecured loans, banks and project financing | Fixed from 2% LIBOR plus 0.8125% | 2006 and 2014 | 5,760 | 402 | 18,829 | 1,424 | ||||||||||||||||||||||
Total financing in Euros | 58,603,275 | 4,091,036 | 54,109,665 | 4,092,058 | ||||||||||||||||||||||||
Japanese yen: | ||||||||||||||||||||||||||||
Direct loans | Fixed from 4.2% | 2009 | 658,825 | 7,216,043 | 915,040 | 9,621,390 | ||||||||||||||||||||||
Bonds | Fixed from 3.5% | 2023 | 2,739,000 | 30,000,000 | 2,853,141 | 30,000,000 | ||||||||||||||||||||||
Project financing | Fixed from 2.9% to 2.9081% and PRIME in yen | Various to 2017 | 9,418,372 | 103,158,512 | 9,537,659 | 100,285,864 | ||||||||||||||||||||||
Total financing in Yen | 12,816,197 | 140,374,555 | 13,305,840 | 139,907,254 | ||||||||||||||||||||||||
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||
Pesos | Foreign currency | Pesos | Foreign currency | |||||||||||||||||||||||||
Rate of Interest(1) | Maturity | (thousands) | (thousands) | (thousands) | (thousands) | |||||||||||||||||||||||
Other currencies(2) | Fixed rate from 7.5% to 14.5% and LIBOR plus 0.8125% | Various to 2013 | 8,522,440 | Various | 8,674,975 | Various | ||||||||||||||||||||||
Pesos: | ||||||||||||||||||||||||||||
Certificates | Fixed from 8.38% to 9.91% and CETES plus 0.35% to 0.67% | Various to 2019 | 94,468,813 | 87,063,477 | ||||||||||||||||||||||||
Syndicated bank loans | TIIE plus 0.35% and fixed from 8.4% | 2008 | 7,000,000 | |||||||||||||||||||||||||
Project financing and syndicated bank loans | Fixed from 8.4% to 11%, TIIE plus 0.2% to 0.48% | Various to 2012 | 14,333,333 | 26,302,362 | ||||||||||||||||||||||||
Total financing in pesos | 115,802,146 | 113,365,839 | ||||||||||||||||||||||||||
Total principal in pesos(3) | 557,443,471 | 546,431,677 | ||||||||||||||||||||||||||
Plus: Accrued interest | 1,507,175 | 1,069,725 | ||||||||||||||||||||||||||
Notes payable to contractors | 10,364,124 | 11,980,327 | ||||||||||||||||||||||||||
Total principal and interest | 569,314,770 | 559,481,729 | ||||||||||||||||||||||||||
Less: Short-term maturities | 60,472,140 | 34,827,384 | ||||||||||||||||||||||||||
Current portion of notes payable to contractors | 3,368,373 | 2,730,672 | ||||||||||||||||||||||||||
Total short-term debt | 63,840,513 | 37,558,056 | ||||||||||||||||||||||||||
Long-term debt | Ps. | 505,474,257 | Ps. | 521,923,673 | ||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | 2012 and thereafter | Total | ||||||||||||||||||||||
Maturity of the principal outstanding for each of the years ending December 31, | Ps. | 58,964,965 | Ps.52,501,480 | Ps. | 65,351,672 | Ps. | 71,776,853 | Ps. | 60,851,549 | Ps. | 247,997,152 | Ps. | 557,443,671 | |||||||||||||||
(1) | As of December 31, 2006 and 2005 the rates were as follows: LIBOR, 5.37% and 4.70%, respectively; the Prime rate in Japanese yen, 1.625% and 1.375%, respectively; theCetesrate, 7.17% for 91 days and 7.20% for 182 days and 8.81% for 91 days and 8.66% for 182 days, respectively; TIIE 7.37% and 8.95%, respectively. | |
(2) | Balance includes debt denominated in Pounds sterling and Swiss francs, carrying different interest rates. | |
(3) | Includes financing from foreign banks of Ps. 403,191,170 and Ps. 393,254,255 as of December 31, 2006 and 2005, respectively. |
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | |||||||
Total notes payable to contractors(1)(2)(3) | Ps. | 10,364,124 | Ps. | 11,980,327 | ||||
Less: Current portion of notes payable to contractors | (3,368,373 | ) | (2,730,672 | ) | ||||
Notes payable to contractors (long-term) | Ps. | 6,995,751 | Ps. | 9,249,655 | ||||
(1) | On November 26, 1997, Petróleos Mexicanos and Pemex-Refining entered into a financed public works contract and a unit-price public works contract with Consorcio Proyecto Cadereyta Conproca, S.A. de C.V. The related contracts are for the reconfiguration and modernization of the Ing. Héctor R. Lara Sosa refinery in Cadereyta, N.L. The original amount of the financed public works contract was U.S. $1,618,352 (Ps. 17,609,288), plus a financing cost of U.S. $805,648 (Ps. 8,766,256), due in twenty semi-annual payments of U.S. $121,200 (Ps. 1,318,777). The original amount of the unit-price public works contract was U.S. $80,000 (Ps. 870,480), including a financing cost of U.S. $47,600 (Ps. 517,936) payable monthly based on the percentage of completion. At December 31, 2006 and 2005, the outstanding balances of the respective contracts were Ps. 7,890,204 and Ps. 10,054,415, respectively. | |
(2) | On June 25, 1997, PEMEX entered into a10-year service agreement with a contractor for a daily fee of U.S. $82.50 for the storage and loading of stabilized petroleum by means of a floating system (“FSO”). At December 31, 2006 and 2005, the outstanding balances were Ps. 512,048 and Ps. 766,445, respectively. | |
(3) | PEMEX has Financed Public Works Contracts (“FPWC”) (formerly known as Multiple Services Contracts or “MSCs”) pursuant to which the hydrocarbons and construction in progress are property of PEMEX. Pursuant to the FPWC, the contractors manage the work in progress, classified as development, infrastructure and maintenance. As of December 31, 2006 and 2005, PEMEX has an outstanding payable amount of Ps. 1,916,872 and Ps. 1,159,466, respectively. |
NOTE 10— | FINANCIAL INSTRUMENTS: |
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
F-29
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
F-30
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | |||||||||||||||
Notional Value | Fair Value | Notional Value | Fair Value | |||||||||||||
Interest rate swaps: | ||||||||||||||||
Pay fixed/ receive variable | Ps. | 17,099,235 | (Ps. | 1,809,891 | ) | Ps. | 18,202,213 | (Ps.1,486,394 | ) | |||||||
Natural gas swaps: | ||||||||||||||||
Pay variable / receive fixed | Ps. | — | Ps. | — | Ps. | 4,635,666 | (Ps.5,116,153 | ) | ||||||||
F-31
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | |||||||||||||||
Notional Value | Fair Value | Notional Value | Fair Value | |||||||||||||
Natural gas futures: | ||||||||||||||||
Purchase | Ps. | — | Ps. | — | Ps. | 633 | Ps. | 38 | ||||||||
Sale | — | — | 656 | 191 | ||||||||||||
2006 | 2005 | |||||||||||||||||||
Notional Value | Fair Value | Notional Value | Fair Value | |||||||||||||||||
Interest rate swaps pay fixed / receive variable | Ps. | 5,000,000 | (Ps. | 367,762 | ) | Ps. | 5,202,665 | (Ps. | 276,781 | ) | ||||||||||
Cross-currency swaps: | ||||||||||||||||||||
Pay U.S. Dollar / receive Euros | Ps. | 57,550,588 | Ps. | 1,731,648 | Ps. | 59,314,777 | (Ps. | 3,617,834 | ) | |||||||||||
Pay U.S. Dollar / receive Japanese Yen | 12,828,029 | (933,726 | ) | 13,095,199 | (904,993 | ) | ||||||||||||||
Pay U.S. Dollar / receive Ponds Sterling | 7,427,262 | 1,247,753 | 8,734,061 | 279,372 | ||||||||||||||||
Natural gas swaps: | ||||||||||||||||||||
Pay fixed / receive variable | Ps. | 5,477,147 | Ps. | 11,484,333 | Ps. | 8,406,741 | Ps. | 1,023,952 | ||||||||||||
Pay variable / receive fixed | 6,426,491 | (11,453,356 | ) | 5,495,298 | (952,228 | ) | ||||||||||||||
Pay variable / receive variable | 2,403 | (3,611 | ) | 2,330,814 | (70,853 | ) | ||||||||||||||
Natural gas options: | ||||||||||||||||||||
Put | Ps. | 31,165 | (Ps. | 2,364 | ) | |||||||||||||||
Call | 678 | 927 | ||||||||||||||||||
Spread | — | 9,036 | ||||||||||||||||||
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | |||||||||||||||
Carrying value | Fair value | Carrying value | Fair value | |||||||||||||
Assets: | ||||||||||||||||
Cash and cash equivalents | Ps. | 188,683,832 | Ps. | 188,683,832 | Ps. | 125,724,053 | Ps. | 125,724,053 | ||||||||
Accounts receivable, notes and other | 132,193,937 | 132,193,937 | 122,658,384 | 122,658,384 | ||||||||||||
Derivative financial instruments | 4,230,800 | 4,230,800 | 3,614,378 | 3,614,378 | ||||||||||||
Liabilities: | ||||||||||||||||
Suppliers | 35,758,809 | 35,758,809 | 32,215,474 | 32,215,474 | ||||||||||||
Accounts and accumulated expenses payable | 14,063,436 | 14,063,436 | 10,803,337 | 10,803,337 | ||||||||||||
Taxes payable | 43,376,135 | 43,376,135 | 70,761,756 | 70,761,756 | ||||||||||||
Derivative financial instruments | 12,887,695 | 12,887,695 | 19,804,143 | 19,804,143 | ||||||||||||
Current portion of long-term debt | 63,840,513 | 63,840,513 | 37,558,056 | 37,558,056 | ||||||||||||
Long-term debt | 505,474,457 | 536,004,859 | 521,923,673 | 579,070,401 | ||||||||||||
NOTE 11— | LABOR OBLIGATIONS: |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
December 31, 2006 | ||||||||||||||||
Seniority | ||||||||||||||||
Pension | premium | Indemnity | Total | |||||||||||||
Vested benefit obligation | Ps. | 166,701,824 | Ps. | 16,549,668 | Ps. | 1,366,265 | Ps. | 184,617,757 | ||||||||
Nonvested benefit obligation | 133,942,007 | 63,051 | 16,092 | 134,021,150 | ||||||||||||
Current benefit obligation | 300,643,831 | 16,612,719 | 1,382,357 | 318,638,907 | ||||||||||||
Less: Plan assets | (2,014,900 | ) | (26,756 | ) | — | (2,041,656 | ) | |||||||||
Net current liability | 298,628,931 | 16,585,963 | 1,382,357 | 316,597,251 | ||||||||||||
Net projected liability | (178,583,541 | ) | (17,980,061 | ) | (1,718,639 | ) | (198,282,241 | ) | ||||||||
Additional liability | Ps. | 120,045,390 | Ps. | 227,932 | Ps. | 26,488 | Ps. | 120,299,810 | ||||||||
Projected benefit obligation | Ps. | 306,064,555 | Ps. | 17,083,760 | Ps. | 1,410,413 | Ps. | 324,558,728 | ||||||||
Less: Plan assets | (2,014,900 | ) | (26,756 | ) | — | (2,041,656 | ) | |||||||||
Items to be amortized over the next 13 and 14 years: | ||||||||||||||||
Transition obligations | (66,906,164 | ) | (3,245,399 | ) | (18,599 | ) | (70,170,162 | ) | ||||||||
Prior service costs and plan amendments | (6,579,494 | ) | (244,189 | ) | — | (6,823,683 | ) | |||||||||
Variations in assumptions and adjustments for experience | (51,980,437 | ) | 4,412,645 | 326,825 | (47,240,967 | ) | ||||||||||
Total of unamortized items | (125,466,095 | ) | 923,057 | 308,226 | (124,234,812 | ) | ||||||||||
Net projected liability | Ps. | 178,583,560 | Ps. | 17,980,061 | Ps. | 1,718,639 | Ps. | 198,282,260 | ||||||||
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
December 31, 2006 | ||||||||||||||||
Seniority | ||||||||||||||||
Pension | premium | Indemnity | Total | |||||||||||||
Net cost for the period for seniority premium, pension plan and indemnities: | ||||||||||||||||
Service cost | Ps. | 6,419,521 | Ps. | 756,732 | Ps. | 59,125 | Ps. | 7,235,378 | ||||||||
Financial cost | 22,425,238 | 1,157,043 | 98,757 | 23,681,038 | ||||||||||||
Return on plan assets | (49,330 | ) | (651 | ) | — | (49,981 | ) | |||||||||
Transition obligation | 5,512,852 | 378,615 | 1,277 | 5,892,744 | ||||||||||||
Prior services and plan amendments | 603,243 | 35,772 | — | 639,015 | ||||||||||||
Variations in assumptions and adjustments for experience | 1,048,353 | (382,309 | ) | (19,011 | ) | 647,033 | ||||||||||
Inflation adjustment | 1,456,797 | 78,370 | 5,547 | 1,540,714 | ||||||||||||
Total net cost for the year | 37,416,674 | 2,023,572 | 145,695 | 39,585,941 | ||||||||||||
December 31, 2005 | ||||||||||||||||
Seniority | ||||||||||||||||
Pension | premium | Indemnity | Total | |||||||||||||
Vested benefit obligation | Ps. | 150,965,715 | Ps. | 13,633,077 | Ps. | 1,250,554 | Ps. | 165,849,346 | ||||||||
Nonvested benefit obligation | 111,884,903 | 56,234 | 18,539 | 111,959,676 | ||||||||||||
Current benefit obligation | 262,850,618 | 13,689,311 | 1,269,093 | 277,809,022 | ||||||||||||
Less: Plan assets | (1,454,463 | ) | (16,925 | ) | (1,471,388 | ) | ||||||||||
Net current liability | 261,396,155 | 13,672,386 | 1,269,093 | 276,337,634 | ||||||||||||
Net projected liability | (153,327,324 | ) | (16,665,097 | ) | (1,579,869 | ) | (171,572,290 | ) | ||||||||
Additional liability | Ps. | 108,068,831 | Ps. | 70,691 | Ps. | 18,539 | Ps. | 108,158,061 | ||||||||
Projected benefit obligation | Ps. | 266,933,684 | Ps. | 14,101,817 | Ps. | 1,285,675 | Ps. | 282,321,176 | ||||||||
Less: Plan assets | (1,454,463 | ) | (16,925 | ) | — | (1,471,388 | ) | |||||||||
Items to be amortized over the next 13 and 14 years: | ||||||||||||||||
Transition obligations | (72,642,563 | ) | (3,639,367 | ) | (18,540 | ) | (76,300,470 | ) | ||||||||
Prior service costs and plan amendments | (7,174,827 | ) | (281,414 | ) | — | (7,456,241 | ) | |||||||||
Variations in assumptions and adjustments for experience | (32,334,507 | ) | 6,500,996 | 312,734 | (25,520,777 | ) | ||||||||||
Total of unamortized items | (112,151,897 | ) | 2,580,215 | 294,194 | (109,277,488 | ) | ||||||||||
Net projected liability | Ps. | 153,327,324 | Ps. | 16,665,107 | Ps. | 1,579,869 | Ps. | 171,572,300 | ||||||||
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
December 31, 2005 | December 31, 2004 | |||||||||||||||||||
Seniority | ||||||||||||||||||||
Pension | premium | Indemnity | Total | Total | ||||||||||||||||
Net cost for the period for seniority premium, pension plan and indemnities: | ||||||||||||||||||||
Service cost | Ps. | 5,394,079 | Ps. | 775,543 | Ps. | 108,011 | Ps. | 6,277,633 | Ps. | 6,841,234 | ||||||||||
Financial cost | 19,006,178 | 1,104,064 | 113,499 | 20,223,741 | 19,252,703 | |||||||||||||||
Return on plan assets | (178,574 | ) | (677 | ) | — | (179,251 | ) | (671,943 | ) | |||||||||||
Transition obligation | 5,551,783 | 381,357 | 1,329 | 5,934,469 | 5,822,638 | |||||||||||||||
Prior services and plan amendments | 315,278 | 36,035 | — | 351,313 | 289,605 | |||||||||||||||
Variations in assumptions and adjustments for experience | 182,181 | (344,630 | ) | — | (162,449 | ) | 142,532 | |||||||||||||
Inflation adjustment | 1,006,216 | 64,669 | 7,315 | 1,078,200 | 1,638,886 | |||||||||||||||
Total net cost for the year | 31,277,141 | 2,016,361 | 230,154 | 33,523,656 | 33,315,655 | |||||||||||||||
Recognition of severance payments | — | — | 1,351,345 | 1,351,345 | — | |||||||||||||||
Net cost of the period and recognition of severance payments | Ps. | 31,277,141 | Ps. | 2,016,361 | Ps. | 1,581,499 | Ps. | 34,875,001 | Ps. | 33,315,655 | ||||||||||
December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Discount rate | 4.25 | % | 4.50 | % | 4.59 | % | ||||||
Rate of increase in compensation levels | 0.50 | % | 0.50 | % | 0.92 | % | ||||||
Rate of increase in costs of other post-retirement benefits | 0.50 | % | 0.50 | % | 0.92 | % | ||||||
Expected long term rate of the return on plan assets | 4.25 | % | 5.00 | % | 5.50 | % |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | |||||||
Other post-retirement benefit plans: | ||||||||
Obligations for other post-retirement benefits | Ps. 256,827,353 | Ps. | 209,119,818 | |||||
Less: | ||||||||
Pending items of amortization relative to those benefits | (120,831,812 | ) | (97,959,987 | ) | ||||
Net liability for other post-retirement benefits | Ps. 135,995,541 | Ps. | 111,159,831 | |||||
December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Net cost for other post-retirement benefits: | ||||||||||||
Service cost | Ps. 5,668,660 | Ps. | 4,013,000 | Ps. | 3,789,973 | |||||||
Financial cost | 17,890,007 | 14,918,359 | 12,604,365 | |||||||||
Transition obligation | 6,127,593 | 6,170,224 | 6,056,519 | |||||||||
Prior services and plan amendments cost | 4,286,237 | 4,316,073 | 218,153 | |||||||||
Variations in assumptions and adjustments for experience | (3,017,875 | ) | (3,673,590 | ) | (112,953 | ) | ||||||
Inflation adjustment | 1,254,027 | 857,640 | 1,170,850 | |||||||||
Total net cost for the year | Ps. 32,208,649 | Ps. | 26,601,706 | Ps. | 23,726,907 | |||||||
December 31, | ||||||||
2006 | 2005 | |||||||
Expected obligations for other post-retirement benefits related to retired employees and active employees that have become vested | Ps. 130,293,808 | Ps. | 125,024,449 | |||||
Portion of the post-retirement benefits for other employees based on years of service | 126,533,545 | 84,095,369 | ||||||
Total accumulated obligation for other post-retirement benefits | Ps. 256,827,353 | Ps. | 209,119,818 | |||||
The effect of increasing by one percent the rate used in estimating the increase in the cost of other post-retirement benefits, with no change in other assumptions, is a follows: | ||||||||
Total labor cost and financial cost | Ps.32,447,423 | Ps. | 28,998,655 | |||||
Accumulated post-retirement benefit obligation | Ps. | 295,356,873 | Ps. | 253,662,141 | ||||
NOTE 12— | COMMITMENTS: |
a. | PEMEX has entered into a nitrogen supply contract for the pressure maintenance program at the Cantarell field that expires in 2015. At December 31, 2006 and 2005, the value of the nitrogen to be supplied during the term of the contract is approximately Ps. 12,892,855 and Ps. 15,755,573, |
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FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
respectively. In the event of the annulment of the contract and depending on the circumstances, PEMEX would be required to purchase the nitrogen production plant in accordance with the terms of the contract. |
2007 | Ps. | 2,332,301 | ||
2008 | 1,608,217 | |||
2009 | 1,254,243 | |||
2010 | 1,254,243 | |||
2011 | 1,254,242 | |||
2012 and thereafter | 5,189,609 | |||
Total | Ps. | 12,892,855 | ||
b. | In 2005, PEMEX entered into a contract for the construction of a tanker, the Floating Production Storage and Offloading (“FPSO”) vessel with Bergensen. The basic function of this new vessel is to provide for the receipt and processing of crude oil from marine wells. The tanker separates oil and gas in order to meet international API guidelines for exportation. Upon completion of this process, the tanker stores the product and distributes it to foreign clients’ ships. The tanker has a storage capacity of 2 million barrels. |
c. | During 2003, 2004 and 2005, PEMEX entered into Financed Public Work Contracts (“FPWC”) (formerly known as Multiple Services Contracts or “MSCs”). In connection with these contracts, the contractor, at its own cost, has to administer and support the execution of the works in connection with the FPWC, which are classified in the categories of development, infrastructure and maintenance. The estimated value of the FPWC as of December 31, is as follows: |
Date of contracting | Block | 2006 | 2005 | |||||||
February 9, 2004 | Olmos | U.S. | $343,574 | U.S. | $343,574 | |||||
November 21, 2003 | Cuervito | 260,072 | 260,072 | |||||||
November 28, 2003 | Misión | 1,035,580 | 1,035,580 | |||||||
November 14, 2003 | Reynosa-Monterrey | 2,437,196 | 2,437,196 | |||||||
December 8, 2003 | Fronterizo | 264,977 | 264,977 | |||||||
December 9, 2004 | Pandura-Anáhuac | 900,392 | 900,392 | |||||||
March 23, 2005 | Pirineo | 645,295 | 645,295 | |||||||
Total | U.S. | $5,887,086 | U.S. | $5,887,086 | ||||||
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
d. | PEMEX, through PMI, enters into sale contracts for crude oil with foreign companies in international markets. The terms and conditions of these contracts are specific to each customer, and the contract durations vary, including evergreen contracts and long term contracts. |
e. | At December 31, 2006 and 2005, PEMEX had entered into contracts with various contractors for an approximate amount of Ps. 90,929,079 and Ps. 235,984,923. These contracts are for the development of PIDIREGAS. |
NOTE 13— | CONTINGENCIES: |
a. | In the ordinary course of business, PEMEX is named in a number of lawsuits of various types. PEMEX evaluates the merit of each claim and assesses the likely outcome, accruing a contingent liability when an unfavorable decision is probable and the amount is reasonably estimable. Unless specifically disclosed in this note, we do not believe a materially unfavorable outcome is probable for any known or pending lawsuits or threatened litigation for which we have not made any accruals. | |
b. | PEMEX is subject to the provisions of theLey General del Equilibrio Ecológico y la Protección al Ambiente(“General Law on Ecological Equilibrium and Environmental Protection”). To comply with this law, environmental audits PEMEX’s larger operating, storage and transportation facilities are have been or are being conducted. Following the completion of such audits, PEMEX signed various agreements with theProcuraduría Federal de Protección al Ambiente(Federal Attorney of Environmental Protection, or “PROFEPA”) to implement environmental remediation and improve environmental plans. Such plans contemplate remediation for environmental damages, as well as related investments for the improvement of equipment, maintenance, labor and materials. |
c. | As of December 31, 2006, PEMEX is involved in various civil, tax, criminal, labor, arbitration and administrative lawsuits, the final resolution of which is pending as of the date of these financial statements. At December 31, 2006 and 2005, PEMEX had accrued a reserve of Ps. 9,716,756 and Ps. 1,642,647, respectively, for these contingent liabilities. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
i. | PEMEX is a party to an arbitration proceeding (No. 11760/KGA) between Pemex-Refining and CONPROCA, S.A. de C.V. (“CONPROCA”) in which CONPROCA is seeking payment of U.S. $633,100 related to construction and maintenance services in the Cadereyta refinery. PEMEX filed a counterclaim against CONPROCA in the amount of U.S. $907,700. | |
On October 13, 2006, the parties filed briefs and submitted evidence for the second liability hearing, which was held in January 2007. On January 20 and 21, 2006, the Cadereyta Refinery, El Tejar pumping station and a cross-section valve located on the border of La Antigua River were inspected by the arbitration panel and its experts. On April 4, 2007, the parties submitted their pleadings in connection with the second hearing. The arbitration panel will issue a partial or provisional award on this matter and once the award is issued, a hearing on damages will be held. | ||
ii. | Construcciones Industriales del Golfo, S.A. de C.V. filed a civil claim against Pemex-Exploration and Production, (exp. 40/2004-VII), for a total amount of Ps. 15,237 plus U.S. $219,584 for the removal of deposits in the Salamanca refinery. Both parties filed their documentary evidence and a final judgment is still pending. | |
iii. | Unión de Sistemas Industriales, S. A. filed a civil claim against Pemex-Refining (exp. 202/2003), for Ps. 393,095. The trial is in the evidentiary stages. | |
iv. | Corporación Mexicana de Mantenimiento Integral S. de R. L. de C. V. (“COMMISA”) filed an arbitration claim before the International Court of Arbitration of the International Chamber of Commerce (the “ICA”) against Pemex-Exploration and Production (IPC-01) for breach of a construction agreement in connection with two platforms in the Cantarell complex. Pemex-Exploration and Production has filed a counterclaim against COMMISA. | |
On November 28, 2006, the ICA issued a preliminary award declaring its jurisdiction. On January 26, 2007, Pemex-Exploration and Production filed a detailed counterclaim seeking U.S. $125,897 and Ps. 41,513. Pemex-Exploration and Production is required to file a response to the detailed claim filed by COMMISA before June 11, 2007. Based on the detailed claim, COMMISA is seeking U.S. $292,043 and Ps. 37,537. | ||
v. | An arbitration proceeding before the ICA was filed by COMBISA, S. de R. L. de C. V. against Pemex-Exploration and Production (IPC-22) seeking U.S. $235,770 for the alleged breach of a construction agreement in connection with three platforms in the Cantarell complex. Pemex-Exploration and Production filed a counterclaim seeking approximately U.S. $12,294. |
vi. | COMMISA filed an arbitration claim before the ICA against Pemex-Exploration and Production (IPC-28), seeking Ps. 40,199 and U.S. $142,400 for the alleged breach of an |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
agreement (PEP-O-IT-136/98 IPC-28) in connection with two vessels in the Cantarell complex. Pemex-Exploration and Production filed a counterclaim seeking approximately Ps. 488 and U.S. $2,057. |
On March 12, 2007, the proceedings to furnish additional evidence concluded. The final decision is still pending. | ||
vii. | On March 31, 2006, Petroquímica Cangrejera, S. A. de C. V., Petroquímica Pajaritos, S. A. de C. V. and Petroquímica Morelos, S. A. de C. V. (each of which has since been merged into Pemex-Petrochemicals) were notified by the Council of Coatzacoalcos, Veracruz of an alleged underpayment of certain real estate taxes in the amount of approximately Ps. 1,846,691. The companies objected to the assessment before theTribunal de lo Contencioso Administrativo del Poder Judicial de Veracruz(Contentious Administrative Court of the Judicial Power of the State of Veracruz). | |
On December 22, 2006, a settlement agreement for the real estate taxes was executed between the parties. The agreement was filed with the court to conclude the administrative proceedings. Pemex-Petrochemicals paid Ps. 76,040 to the Council of Coatzacoalcos, Veracruz. | ||
viii. | A civil claim was filed by Asociación de Transportistas al Servicio de Petróleos Mexicanos, Clientes o Empresas Sustitutos, A. C. against Pemex-Refining (exp. 262/2005-II) seeking approximately Ps. 1,647,629 for damages in connection with the suspension of a tank truck transportation agreement dated March 26, 1993. The trial is in the evidentiary stages. The trial has been suspended due to an appeal filed by Pemex-Refining from a ruling excluding certain documentary evidence filed by Pemex-Refining. | |
ix. | A civil claim was filed by Asociación de Transportistas al Servicio de Petróleos Mexicanos, Clientes o Empresas Sustitutos, A. C. against Pemex-Refining (exp. 271/2005-I) asserting that Pemex-Refining should authorize the plaintiff to replace tank trucks older than ten years in accordance with the tank truck transportation agreement mentioned in paragraph viii. Evidence was filed by the parties, and a final hearing is pending. | |
x. | A request for Constitutional relief known as anamparowas filed by Minera Carbonífera Río Escondido, S.A. de C.V. and Minerales Monclova, S.A. de C.V. against several officers of PEMEX and Pemex-Exploration and Production, claiming that the construction contract 414105826 is unconstitutional because the officers who executed the agreement did not have the appropriate authority. | |
Reports and expert opinions were filed as evidence. As of the date of this filing, a third expert’s opinion is still pending, as well as the constitutional hearing. | ||
xi. | There is an arbitration proceeding before the ICA filed by TEJAS GAS DE TOLUCA, S. de R. L. de C. V. against Gas Natural México S. A. de C. V. (“GNM”) and Pemex-Gas and Basic Petrochemicals seeking compliance with a Memorandum of |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
Understanding and its annexes (which was executed for the construction and operation of the Palmillas-Toluca pipeline, as well as for the execution of a transportation agreement). |
As of this date, the arbitration panel has not been formed. The provisional arbitration schedule is being set and the initial arbitration report is being prepared to state the claim and counterclaim. | ||
xii. | As of the date of this report, two claims filed by a group of Congressmen from the LIXth Legislature related to the Financed Public Works Contracts program remain pending. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
NOTE 14— | EQUITY: |
Amount | ||||
Certificates of Contribution “A” (nominal value) | Ps. | 10,222,463 | ||
Inflation restatement increase | 83,222,919 | |||
Certificates of Contribution “A” in Mexican pesos of December 31, 2006 purchasing power | Ps. | 93,445,382 | ||
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
NOTE 15— | COMPREHENSIVE INCOME (LOSS): |
2006 | 2005 | 2004 | ||||||||||
Net income (loss) for the year | Ps. 45,252,176 | (Ps. 79,374,302 | ) | (Ps. 27,413,156 | ) | |||||||
Surplus in restatement of equity | 3,917,392 | 7,887,786 | (5,028,681 | ) | ||||||||
Derivative financial instruments | 5,083,038 | (6,781,520 | ) | — | ||||||||
Effect on equity from labor obligations | (18,188,227 | ) | (20,887,498 | ) | (7,500,232 | ) | ||||||
Other(1) | 684,369 | — | — | |||||||||
Comprehensive income (loss) for the year | Ps. 36,748,748 | (Ps. 99,155,534 | ) | (Ps. 39,942,069 | ) | |||||||
(1) | Other includes the translation effect of foreign subsidiaries |
NOTE 16— | SEGMENT FINANCIAL INFORMATION: |
• | Pemex-Exploration and Production earns revenues from domestic crude oil sales, as well as from the export of crude oil, through PMI, to international markets. Export sales are made through PMI to approximately 25 major customers in various foreign markets. Less than |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
half of PEMEX crude oil is sold domestically; however, these amounts are in large part sufficient to satisfy Mexican domestic demand. |
• | Pemex-Refining earns revenues from sales of refined petroleum products and derivatives. Most of Pemex-Refining’s sales are to third parties and occur within the domestic market. The entity supplies theComisión Federal de Electricidad(“CFE”) with a significant portion of its fuel oil production. Pemex-Refining’s most profitable products are the different types of gasoline. | |
• | Pemex-Gas and Basic Petrochemicals earns revenues primarily from domestic sources. Pemex-Gas and Basic Petrochemicals also consumes high levels of its own natural gas production. Most revenues of this entity are obtained through the sale of ethane and butane gas. | |
• | Pemex-Petrochemicals engages in the sale of petrochemical products to the domestic market. Pemex-Petrochemicals offers a wide range of products, with the higher revenue generating products being methane derivatives, ethane derivatives and aromatics and derivatives. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
Corporate and | ||||||||||||||||||||||||||||
Exploration and | Gas and Basic | Subsidiary | Intersegment | |||||||||||||||||||||||||
Production | Refining | Petrochemicals | Petrochemicals | Companies | Eliminations | Total | ||||||||||||||||||||||
Year ended December 31, 2006: | ||||||||||||||||||||||||||||
Sales - | ||||||||||||||||||||||||||||
Trade | Ps. | — | Ps. | 392,219,698 | Ps. | 133,663,453 | Ps. | 20,854,842 | Ps. | 515,756,751 | Ps. | — | Ps. | 1,062,494,744 | ||||||||||||||
Intersegment | 857,768,619 | 44,567,150 | 80,049,164 | 9,304,633 | 165,750,492 | (1,157,440,058 | ) | — | ||||||||||||||||||||
Total net sales | 857,768,619 | 436,786,848 | 213,712,617 | 30,159,475 | 681,507,243 | (1,157,440,058 | ) | 1,062,494,744 | ||||||||||||||||||||
Operating income (loss)(1) | 665,587,886 | (79,906,737 | ) | 10,332,374 | (11,425,073 | ) | (3,303,282 | ) | 63,228 | 581,348,396 | ||||||||||||||||||
Comprehensive financing cost | (23,298,237 | ) | (8,699,215 | ) | 1,093,499 | (4,022,138 | ) | 12,200,387 | (257,000 | ) | (22,982,704 | ) | ||||||||||||||||
Net income (loss) | 73,139,088 | (34,045,615 | ) | 6,083,001 | (17,376,521 | ) | 52,675,998 | (35,223,775 | ) | 45,252,176 | ||||||||||||||||||
Depreciation and amortization | 49,942,292 | 8,407,360 | 3,401,850 | 870,137 | 671,366 | — | 63,293,005 | |||||||||||||||||||||
Acquisition of fixed assets | 59,663,876 | 12,751,757 | 4,946,587 | 1,650,554 | 15,100,283 | — | 94,113,057 | |||||||||||||||||||||
Total assets | 1,056,630,895 | 343,979,223 | 128,907,567 | 69,661,160 | 1,964,854,463 | (2,359,298,852 | ) | 1,204,734,456 | ||||||||||||||||||||
Year ended December 31, 2005: | ||||||||||||||||||||||||||||
Sales - | ||||||||||||||||||||||||||||
Trade | Ps. | — | Ps. | 367,539,570 | Ps. | 139,734,701 | Ps. | 21,036,151 | Ps. | 437,973,240 | Ps. | — | Ps. | 966,283,662 | ||||||||||||||
Intersegment | 745,320,118 | 39,811,173 | 85,939,922 | 9,173,602 | 127,215,062 | (1,007,459,877 | ) | — | ||||||||||||||||||||
Total net sales | 745,320,118 | 407,350,743 | 225,674,623 | 30,209,753 | 565,188,302 | (1,007,459,877 | ) | 966,283,662 | ||||||||||||||||||||
Operating income (loss)(1) | 546,995,348 | (27,855,170 | ) | 10,291,780 | (9,427,235 | ) | (21,242,770 | ) | 20,208,519 | 518,970,472 | ||||||||||||||||||
Comprehensive financing cost | 8,368,601 | (3,719,602 | ) | 2,504,563 | (3,421,738 | ) | (12,669,405 | ) | 4,276,693 | (4,660,888 | ) | |||||||||||||||||
Net income (loss) | (18,988,037 | ) | (55,425,471 | ) | 6,952,552 | (17,204,921 | ) | (73,760,858 | ) | 79,052,433 | (79,374,302 | ) | ||||||||||||||||
Depreciation and amortization | 41,103,624 | 8,349,076 | 3,718,199 | 1,036,097 | 723,523 | — | 54,930,519 | |||||||||||||||||||||
Acquisition of fixed assets | 28,429,932 | 6,300,960 | 1,866,583 | 2,420,712 | 42,241,816 | — | 81,260,003 | |||||||||||||||||||||
Total assets | 877,767,205 | 308,810,976 | 100,927,807 | 53,819,901 | 1,565,875,219 | (1,822,383,153 | ) | 1,084,817,955 | ||||||||||||||||||||
Year ended December 31, 2004: | ||||||||||||||||||||||||||||
Sales - | ||||||||||||||||||||||||||||
Trade | Ps. | — | Ps. | 339,916,711 | Ps. | 124,777,471 | Ps. | 18,089,185 | Ps. | 348,985,898 | Ps. | — | Ps. | 831,769,265 | ||||||||||||||
Intersegment | 603,190,202 | 29,053,601 | 72,240,565 | 7,919,976 | 100,070,610 | (812,474,954 | ) | — | ||||||||||||||||||||
Total net sales | 603,190,202 | 368,970,312 | 197,018,036 | 26,009,161 | 449,056,508 | (812,474,954 | ) | 831,769,265 | ||||||||||||||||||||
Operating income (loss)(1) | 443,440,998 | 42,877,046 | 14,298,320 | (8,499,972 | ) | (675,910 | ) | (2,003,114 | ) | 489,437,368 | ||||||||||||||||||
Comprehensive financing cost | 8,160,712 | 5,695,144 | (168,651 | ) | 1,449,534 | 3,479,901 | (11,038,390 | ) | 7,578,250 | |||||||||||||||||||
Net income (loss) | (14,698,056 | ) | (23,719,649 | ) | 12,528,648 | (13,241,329 | ) | (23,676,569 | ) | 35,393,799 | (27,413,156 | ) | ||||||||||||||||
Depreciation and amortization | 31,076,550 | 8,064,878 | 3,656,581 | 1,386,070 | 867,338 | — | 45,051,417 | |||||||||||||||||||||
Acquisition of fixed assets | 71,877,107 | 5,003,123 | 1,759,422 | 1,712,463 | 355,863 | — | 80,707,978 | |||||||||||||||||||||
Total assets | 781,745,009 | 295,354,322 | 112,017,741 | 92,931,362 | 1,107,230,745 | (1,370,487,511 | ) | 1,018,791,668 | ||||||||||||||||||||
(1) | Represents the measure of segment performance. Amounts reconcile to the consolidated statements of operations by deducting operating costs and expenses from net sales. |
NOTE 17— | FISCAL REGIME: |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | |||||||
Current IRP | Ps.3,705,184 | — | ||||||
Deferred IRP | 1,031,619 | 2,057,889 | ||||||
Ps.4,736,803 | Ps. | 2,057,889 | ||||||
2006 | 2005 | 2004 | ||||||||||
Current income tax | Ps | . 4,598,426 | Ps. | 3,360,935 | Ps. | 1,456,518 | ||||||
Deferred income tax | (160,214 | ) | 476,494 | 544,940 | ||||||||
Ps. | 4,438,212 | Ps. | 3,837,429 | Ps. | 2,001,458 | |||||||
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
NOTE 18— | NEW ACCOUNTING PRONOUNCEMENTS |
NOTE 19 - | SUBSEQUENT EVENTS |
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
NOTE 20 | — DIFFERENCES BETWEEN MEXICAN FRS AND U.S. GAAP |
2006 | 2005 | 2004 | ||||||||||
Net income (loss) for the year under Mexican FRS | Ps. | 45,252,176 | (Ps. 79,374,302 | ) | (Ps. 27,413,156 | ) | ||||||
U.S. GAAP adjustments: | ||||||||||||
Exploration and drilling costs, net (a) | (1,444,502 | ) | (1,493,672 | ) | (1,526,217 | ) | ||||||
Pensions and seniority premiums (b) | 1,869,452 | 975,778 | 804,406 | |||||||||
Post-retirement benefits (c) | 4,859,871 | 3,252,942 | (2,858,334 | ) | ||||||||
Accrued vacation (d) | (19,805 | ) | (16,107 | ) | 136,426 | |||||||
Fixed asset adjustments: | ||||||||||||
Capitalized gains (losses) of derivative financial instruments, net (e) | 3,786,109 | (8,140,013 | ) | 890,056 | ||||||||
Capitalization of interest, net (f) | 2,693,158 | 1,858,414 | 2,096,517 | |||||||||
Impairment, net (g) | 3,834,430 | 6,020,670 | 9,846,385 | |||||||||
Depreciation convention (h) | 754,772 | 754,772 | 754,772 | |||||||||
Derivative financial instruments (i) | 71,968 | 993,526 | 6,220,077 | |||||||||
Sales of shares of Repsol (j) | — | — | 727,159 | |||||||||
Profit in inventory (k) | (4,006,026 | ) | (2,675,545 | ) | 1,117,526 | |||||||
Available-for-sale investment securities (m) | (2,886,826 | ) | (800,103 | ) | (5,407,389 | ) | ||||||
Effects of inflation accounting on U.S. GAAP adjustments (o) | 27,590 | 199,385 | 622,007 | |||||||||
Deferred income taxes (p) | (72,068 | ) | 426,631 | — | ||||||||
Reclassification of Pemex Finance net income to minority interest (q) | (52,804 | ) | 1,117,236 | — | ||||||||
Total U.S. GAAP adjustments, net | 9,415,319 | 2,473,914 | 13,423,391 | |||||||||
Net income (loss) for the year under U.S. GAAP | Ps. | 54,667,495 | (Ps. 76,900,388 | ) | (Ps. 13,989,765 | ) | ||||||
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | 2004 | ||||||||||
Comprehensive income (loss) under U.S. GAAP: | ||||||||||||
Net income (loss) for the year under U.S. GAAP | Ps. | 54,667,495 | (Ps. | 76,900,388 | ) | (Ps. | 13,989,765 | ) | ||||
Other comprehensive income (loss): | ||||||||||||
Additional minimum pension liability (b) | (19,576,073 | ) | (18,979,124 | ) | (2,790,733 | ) | ||||||
Derivative financial instruments (i) | 5,083,038 | (4,752,172 | ) | (8,143,833 | ) | |||||||
Unrealized gains on available-for-sale investment securities (m) | 2,886,826 | 800,103 | 3,985,329 | |||||||||
Surplus (deficit) in restatement of equity | 3,959,433 | 5,369,696 | (5,028,682 | ) | ||||||||
Other | 684,369 | — | — | |||||||||
Comprehensive income (loss) | Ps. | 47,705,088 | (Ps. | 94,461,885 | ) | (Ps. | 25,967,684 | ) | ||||
2006 | 2005 | |||||||
Components of accumulated other comprehensive income at December 31: | ||||||||
Derivative financial instruments (i) | (Ps. | 1,698,482 | ) | (Ps. | 6,781,520 | ) | ||
Additional minimum pension liability (b) | (41,345,930 | ) | (21,769,857 | ) | ||||
Unrealized gains on available-for-sale investment securities (m) | 12,493,390 | 9,606,564 | ||||||
Surplus in restatement of equity | 151,624,695 | 147,665,262 | ||||||
Other | 684,369 | — | ||||||
Accumulated other comprehensive income | Ps. | 121,758,042 | Ps. | 128,720,449 | ||||
2006 | 2005 | |||||||
Equity is reconciled as follows: | ||||||||
Equity (deficit) under Mexican FRS | Ps. 39,953,764 | (Ps. 27,958,841 | ) | |||||
U.S. GAAP adjustments: | ||||||||
Exploration and drilling costs (a) | 13,386,109 | 14,830,611 | ||||||
Pensions and seniority premiums: | ||||||||
Pensions and seniority premiums (b) | (7,590,067 | ) | (9,459,518 | ) | ||||
Additional minimum pension liability (b) | 5,230,027 | 6,617,873 | ||||||
Post-retirement benefits (c) | (36,828,525 | ) | (41,688,395 | ) | ||||
Accrued vacation (d) | (568,898 | ) | (571,350 | ) |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | |||||||
Fixed asset adjustments: | ||||||||
Capitalized gains (losses) of derivative financial instruments, net (e) | 2,950,403 | (835,705 | ) | |||||
Capitalization of interest, net (f) | (7,992,143 | ) | (10,685,303 | ) | ||||
Impairment, net (g) | (28,825,223 | ) | (32,659,653 | ) | ||||
Depreciation convention (h) | (754,770 | ) | (1,509,542 | ) | ||||
Derivative financial instruments (i) | 7,854,457 | 7,782,489 | ||||||
Profit in inventory (k) | (7,552,647 | ) | (3,546,621 | ) | ||||
Advanced payments on minimum guaranteed dividend (l) | (259,245 | ) | (15,902,901 | ) | ||||
Deferred income taxes (p) | 354,563 | 426,631 | ||||||
Reclassification of Pemex Finance equity to minority interest (q) | (1,411,618 | ) | (1,400,855 | ) | ||||
Total U.S. GAAP adjustments, net | (62,007,577 | ) | (88,602,239 | ) | ||||
Deficit under U.S. GAAP | (Ps.22,053,813 | ) | (Ps.116,561,080 | ) | ||||
2006 | 2005 | |||||||
Changes in U.S. GAAP equity for the year ended December 31: | ||||||||
Deficit at January 1 | (Ps.116,561,080 | ) | (Ps. 52,530,556 | ) | ||||
Net income (loss) for the period | 54,667,495 | (76,900,388 | ) | |||||
Mexican Government increase in equity of Subsidiary Entities | 46,962,589 | 46,412,892 | ||||||
Minimum guaranteed dividends | (160,410 | ) | (15,981,529 | ) | ||||
Other comprehensive income: | ||||||||
Additional minimum pension liability (b) | (19,576,073 | ) | (18,979,124 | ) | ||||
Derivative financial instruments (i) | 5,083,038 | (4,752,172 | ) | |||||
Unrealized gains on available-for-sale investment securities (m) | 2,886,826 | 800,103 | ||||||
Surplus in restatement of equity | 3,959,433 | 5,369,694 | ||||||
Other | 684,369 | — | ||||||
Deficit at December 31 | (Ps. 22,053,813 | ) | (Ps.116,561,080 | ) | ||||
(a) | Exploration and drilling costs |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(b) | Pensions and seniority premiums |
(c) | Post-retirement benefits |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(d) | Accrued vacation |
(e) | Fixed assets—Capitalized gains and losses of derivative financial instruments |
(f) | Fixed assets—Capitalization of interest |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | 2004 | ||||||||||
Under Mexican FRS: | ||||||||||||
Interest capitalized | Ps. | 6,742,842 | Ps. | 5,340,243 | Ps. | 4,666,343 | ||||||
Interest expense | 44,429,372 | 55,075,928 | 34,153,620 | |||||||||
Total interest cost | Ps. | 51,172,214 | Ps. | 60,416,171 | Ps. | 38,819,963 | ||||||
Under U.S. GAAP: | ||||||||||||
Interest capitalized | Ps. | 8,345,313 | Ps. | 6,092,930 | Ps. | 5,621,456 | ||||||
Interest expense | 42,826,901 | 54,323,241 | 33,198,507 | |||||||||
Total interest cost | Ps. | 51,172,214 | Ps. | 60,416,171 | Ps. | 38,819,963 | ||||||
(g) | Fixed assets—Impairment |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(h) | Fixed assets—Depreciation convention |
(i) | Accounting for derivative financial instruments |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
i) | PEMEX has entered into cross currency swaps under which it swaps principal and interest payments onnon-U.S. dollar-denominated obligations for U.S. dollar amounts. This limits PEMEX’s exposure to fluctuations in these currencies as they relate to the U.S. dollar. Under U.S. GAAP, foreign currency hedges can be designated as such only when hedging the risk to the entity’s functional currency, and therefore, contracts entered into by PEMEX entities whose functional currency is not the U.S. dollar do not qualify for hedge accounting under U.S. GAAP despite qualifying under Mexican FRSBulletin C-2, which had no similar |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
requirement that foreign currency hedge transactions be carried out in the entity’s functional currency. |
ii) | Given the need for specialized technology, PEMEX enters into infrastructure and supply contracts whose settlement terms are denominated in U.S. dollars. Such contracts are generally entered into by entities whose functional currency is not the U.S. dollar, thus creating a foreign currency embedded derivative that is bifurcated and evaluated separately under U.S. GAAP. Such embedded derivatives are not required to be bifurcated under Mexican FRSBulletin C-2, since they were considered normal contractual provisions in Mexico. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(j) | Sale of shares of Repsol |
(k) | Profit in inventory |
(l) | Advance payments on minimum guaranteed dividend |
(m) | Accounting for available-for-sale securities (Repsol) |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
Unrealized Gain | ||||||||||||
Cost | Fair Value | (Loss) | ||||||||||
2006 | Ps. | 9,859,196 | Ps. | 22,352,586 | Ps. | 12,493,390 | ||||||
2005 | Ps. | 9,713,505 | Ps. | 19,320,069 | Ps. | 9,606,564 | ||||||
2004 | Ps. | 9,713,505 | Ps. | 18,519,965 | Ps. | 8,806,461 |
(n) | Asset retirement obligations |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | |||||||
Balance at January 1 | Ps. | 14,251,420 | Ps. | 14,674,446 | ||||
Liabilities incurred | 1,724,190 | 1,797,000 | ||||||
Liabilities settled | — | — | ||||||
Accretion expense | (35,574 | ) | 641,829 | |||||
Inflation | (291,758 | ) | (473,287 | ) | ||||
Currency exchange gain | (69,914 | ) | (614,071 | ) | ||||
Revisions in estimated cash flows | (131,696 | ) | (1,774,497 | ) | ||||
Balance at December 31 | Ps. | 15,446,668 | Ps. | 14,251,420 | ||||
(o) | Effects of inflation on the U.S. GAAP adjustments |
(p) | Deferred income taxes |
(q) | Reclassification of Pemex Finance equity to minority interest |
II. | Additional disclosure requirements: |
(a) | Consolidation of Pemex Finance |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(b) | Special Tax on Production and Services (“IEPS Tax”) |
(c) | Environmental, dismantlement and abandonment |
i) | As a result of the activities of PEMEX, an affected area is identified in a particular site, and PEMEX undertakes a formal commitment to correct the environmental deficiency, in accordance with the criteria, guidelines, standards and legal framework in force; and | |
ii) | A reasonable estimate of the costs of remediation orclean-up of the identified affected area has been made, including the costs of the assessment studies. |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | |||||||
Pemex—Exploration and Production | Ps. | 690,612 | Ps. | 784,100 | ||||
Pemex—Refining(1) | 1,292,919 | 692,119 | ||||||
Pemex—Gas and Basic Petrochemicals | 273,888 | 269,078 | ||||||
Pemex—Petrochemicals | 53,955 | 51,917 | ||||||
Total Environmental Liability Accrual | Ps. | 2,311,374 | Ps. | 1,797,214 | ||||
(1) | The increase primarily resulted from revisions to estimates and new reserves established for additional remediation plans. |
(d) | Dismantlement and abandonment costs |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(e) | Pensions and seniority premiums |
2006 | 2005 | 2004 | ||||||||||
Service cost | Ps. | 6,852,496 | Ps. | 6,277,635 | Ps. | 6,841,240 | ||||||
Interest cost | 23,086,816 | 20,223,743 | 19,449,166 | |||||||||
Return on plan assets | (31,632 | ) | (179,251 | ) | (861,702 | ) | ||||||
Net amortization and deferral | 336,973 | 786,208 | 97,849 | |||||||||
Amortization of net transition obligation | 5,501,967 | 5,540,966 | 5,440,692 | |||||||||
Adjustment to net periodic pension cost due to inflation | 1,466,536 | 1,058,898 | 1,599,180 | |||||||||
Plan amendments | 503,333 | 191,024 | (55,176 | ) | ||||||||
Net cost under U.S. GAAP | 37,716,489 | 33,899,223 | 32,511,249 | |||||||||
Net cost under Mexican FRS | (39,585,941 | ) | (34,875,001 | ) | (33,315,655 | ) | ||||||
Additional (benefit) expense recognized under U.S. GAAP | (Ps. | 1,869,452 | ) | (Ps. | 975,778 | ) | (Ps. | 804,406 | ) | |||
2006 | 2005 | 2004 | ||||||||||
Discount rate | 4.25% | 4.50% | 4.59% | |||||||||
Rates of increase in compensation levels | 0.50% | 0.50% | 0.92% | |||||||||
Expected long-term rate of return on assets | 4.25% | 5.00% | 5.50% |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | |||||||
Accumulated benefit obligation | Ps. | 317,272,654 | Ps. | 276,558,474 | ||||
Projected benefit obligation | 324,558,730 | 282,321,176 | ||||||
Plan assets at fair value | (2,041,656 | ) | (1,471,390 | ) | ||||
Projected benefit obligation in excess of plan assets | 322,517,074 | 280,849,786 | ||||||
Unrecognized net loss | (43,909,568 | ) | (20,984,909 | ) | ||||
Unrecognized transition obligation | (67,043,837 | ) | (72,767,509 | ) | ||||
Unrecognized prior service costs | (5,691,352 | ) | (6,065,549 | ) | ||||
Accrued liability under U.S. GAAP | 205,872,317 | 181,031,819 | ||||||
Accrued liability recognized under Mexican FRS | (198,282,260 | ) | (171,572,300 | ) | ||||
Net U.S. GAAP adjustment to seniority premium and pension plan liability | 7,590,057 | 9,459,519 | ||||||
Additional minimum liability | Ps. | 110,951,993 | Ps. | 96,338,271 | ||||
Expected Benefit | ||||
Year | Payments | |||
2007 | Ps. | 16,075,928 | ||
2008 | 16,398,564 | |||
2009 | 17,950,577 | |||
2010 | 19,457,860 | |||
2011 | 21,123,573 | |||
2012 | 22,842,502 | |||
2013 | 24,397,772 | |||
2014 | 26,077,481 | |||
2015 | 27,876,858 | |||
2016 | 29,131,691 | |||
Total | Ps. | 221,332,806 | ||
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
Securities | 2006 | 2005 | ||||||
Mexican Government Bonds | 71% | 63% | ||||||
Bonds issued by financial institutions listed on the Mexican Stock Exchange | 29% | 37% | ||||||
Total | 100% | 100% | ||||||
(f) | Other post-retirement benefits |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
Expected Benefit | ||||
Year | Payments | |||
2007 | Ps. | 11,372,864 | ||
2008 | 12,287,017 | |||
2009 | 13,195,664 | |||
2010 | 14,216,817 | |||
2011 | 15,328,624 | |||
2012 | 16,506,788 | |||
2013 | 17,722,437 | |||
2014 | 18,739,037 | |||
2015 | 19,683,719 | |||
2016 | 20,663,003 | |||
Total | Ps. | 159,715,970 | ||
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
Supplemental | Supplemental | Supplemental | ||||||||||||||||||||||||||||||||||
Payments | Health Services | Total | Payments | Health Services | Total | Payments | Health Services | Total | ||||||||||||||||||||||||||||
Service cost | Ps. | 4,518,036 | Ps. | 1,166,690 | Ps. | 5,684,726 | Ps. | 2,617,140 | Ps. | 1,395,858 | Ps. | 4,012,998 | Ps. | 2,548,794 | Ps. | 2,065,434 | Ps. | 4,614,228 | ||||||||||||||||||
Interest cost | 11,729,108 | 5,342,613 | 17,071,721 | 9,338,423 | 5,371,096 | 14,709,519 | 8,349,570 | 6,753,440 | 15,103,010 | |||||||||||||||||||||||||||
Amortization of actuarial (gains) and losses | 405,878 | (2,599,773 | ) | (2,193,895 | ) | (170,968 | ) | (1,628,913 | ) | (1,799,881 | ) | 1,325 | (21,032 | ) | (19,707 | ) | ||||||||||||||||||||
Amortization of prior service cost and plan amendments | 20,595 | 56,667 | 77,262 | (15,033 | ) | — | (15,033 | ) | (7,191 | ) | — | (7,191 | ) | |||||||||||||||||||||||
Amortization of transition obligation | 2,975,335 | 2,668,738 | 5,644,073 | 2,996,046 | 2,690,602 | 5,686,648 | 2,943,123 | 2,639,845 | 5,582,968 | |||||||||||||||||||||||||||
Adjustment to net periodic post-retirement benefit cost due to inflation | 796,407 | 268,484 | 1,064,891 | 493,846 | 260,667 | 754,513 | 718,223 | 593,711 | 1,311,934 | |||||||||||||||||||||||||||
Net expense under U.S. GAAP | 20,445,359 | 6,903,419 | 27,348,778 | 15,259,454 | 8,089,310 | 23,348,764 | 14,553,844 | 12,031,398 | 26,585,242 | |||||||||||||||||||||||||||
Expense under Mexican FRS | (20,778,959 | ) | (11,429,690 | ) | (32,208,649 | ) | (15,314,651 | ) | (11,287,055 | ) | (26,601,706 | ) | (14,646,766 | ) | (9,080,141 | ) | (23,726,907 | ) | ||||||||||||||||||
Additional expense (benefit) under U.S. GAAP | (Ps. | 333,600 | ) | (Ps. | 4,526,271 | ) | (Ps. | 4,859,871 | ) | (Ps. | 55,197 | ) | (Ps. | 3,197,745 | ) | (Ps. | 3,252,942 | ) | (Ps. | 92,922 | ) | Ps. | 2,951,256 | Ps. | 2,858,334 | |||||||||||
F-70
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | 2004 | ||||||||||
Discount rate | 4.25 | % | 4.50 | % | 4.59 | % | ||||||
Health care cost trend rate | 1.50 | % | 1.50 | % | 0.92 | % |
F-71
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | |||||||||||||||||||||||
Supplemental | Supplemental | |||||||||||||||||||||||
Payments | Health Services | Total | Payments | Health Services | Total | |||||||||||||||||||
Accumulated unfunded post retirement benefit obligation: | ||||||||||||||||||||||||
Retirees | Ps. | 80,080,245 | Ps. | 50,292,131 | Ps. | 130,372,376 | Ps. | 67,583,668 | Ps. | 45,019,053 | Ps. | 112,602,721 | ||||||||||||
Fully eligible active participants | 14,799,867 | 1,338,440 | 16,138,307 | 10,817,470 | 1,627,385 | 12,444,855 | ||||||||||||||||||
Other active plan participants | 72,294,954 | 38,021,717 | 110,316,671 | 64,720,990 | 19,351,252 | 84,072,242 | ||||||||||||||||||
Total | 167,175,066 | 89,652,288 | 256,827,354 | 143,122,128 | 65,997,690 | 209,119,818 | ||||||||||||||||||
Unrecognized actuarial gains (losses) | (25,857,950 | ) | 10,727,113 | (15,130,837 | ) | (14,063,409 | ) | 32,612,792 | 18,549,383 | |||||||||||||||
Prior service cost and plan amendments | (456,519 | ) | (485,130 | ) | (941,649 | ) | (477,949 | ) | (540,674 | ) | (1,018,623 | ) | ||||||||||||
Unamortized transition obligation | (36,259,991 | ) | (31,670,811 | ) | (67,930,802 | ) | (39,355,967 | ) | (34,446,385 | ) | (73,802,352 | ) | ||||||||||||
Net post-retirement benefit liability: | ||||||||||||||||||||||||
U.S. GAAP | 104,600,606 | 68,223,460 | 172,824,066 | 89,224,803 | 63,623,423 | 152,848,226 | ||||||||||||||||||
Mexican FRS | (110,899,469 | ) | (25,096,072 | ) | (135,995,541 | ) | (95,188,909 | ) | (15,970,922 | ) | (111,159,831 | ) | ||||||||||||
Net U.S. GAAP adjustment | (Ps. | 6,298,863 | ) | Ps. | 43,127,388 | Ps. | 36,828,525 | (Ps. | 5,964,106 | ) | Ps. | 47,652,501 | Ps. | 41,688,395 | ||||||||||
F-72
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
Seniority Premiums and | ||||||||||||||||||||||||
Pension Benefits | Supplemental Payments | Health Services | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||||||||
Change in benefit obligation (PBO) | ||||||||||||||||||||||||
Benefit obligation at beginning of year | Ps. | 271,323,614 | Ps. | 249,318,687 | Ps. | 137,546,938 | Ps. | 114,511,558 | Ps. | 63,426,810 | Ps. | 65,958,207 | ||||||||||||
Effect of inflation on beginning balance | 10,997,563 | 909,111 | 5,575,190 | 400,039 | 2,570,879 | 219,252 | ||||||||||||||||||
Service cost | 6,852,493 | 6,277,635 | 4,518,036 | 2,617,140 | 1,166,690 | 1,395,858 | ||||||||||||||||||
Interest cost | 23,086,816 | 20,223,743 | 11,729,108 | 9,338,423 | 5,342,613 | 5,371,096 | ||||||||||||||||||
Prior service costs and plan amendments | 1,369,712 | 4,757,830 | 658,356 | 360,580 | 268,682 | 606,412 | ||||||||||||||||||
Actuarial (gains)/losses | 22,461,088 | 11,586,844 | 12,216,889 | 20,321,006 | 19,180,493 | (5,316,169 | ) | |||||||||||||||||
Benefits paid | (11,532,556 | ) | (10,752,673 | ) | (5,069,451 | ) | (4,426,618 | ) | (2,303,879 | ) | (2,236,966 | ) | ||||||||||||
Benefit obligation at end of year | Ps. | 324,558,730 | Ps. | 282,321,177 | Ps. | 167,175,066 | Ps. | 143,122,128 | Ps. | 89,652,288 | Ps. | 65,997,690 | ||||||||||||
Change in plan assets | ||||||||||||||||||||||||
Fair value of plan assets at beginning of year | Ps. | 1,414,072 | Ps. | 2,683,026 | Ps. | — | Ps. | — | Ps. | — | Ps. | — | ||||||||||||
Effect of inflation on beginning balance | 57,317 | (86,534 | ) | — | — | — | — | |||||||||||||||||
Actual return on plan assets | (775,686 | ) | (954,975 | ) | — | — | — | — | ||||||||||||||||
Company contributions | 17,640,993 | 14,607,290 | — | 4,304,060 | — | — | ||||||||||||||||||
Transfer of funds | (5,019,025 | ) | (4,304,060 | ) | 5,019,025 | — | — | — | ||||||||||||||||
Benefits paid | (11,276,015 | ) | (10,473,358 | ) | (5,019,025 | ) | (4,304,060 | ) | — | — | ||||||||||||||
Fair value of plan assets at end of year | Ps. | 2,041,656 | Ps. | 1,471,389 | Ps. | — | Ps. | — | Ps. | — | Ps. | — | ||||||||||||
F-73
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(g) | Leases |
Lease maturities as of | ||||
December 31, | ||||
Year | 2006 | |||
2007 | Ps. | 143,161 | ||
2008 | 121,944 | |||
2009 | 121,944 | |||
2010 | 121,944 | |||
2011 | 121,944 | |||
2012 and thereafter | 133,957 | |||
Total | Ps. | 764,894 | ||
(h) | Supplemental geographical information |
2006 | 2005 | 2004 | ||||||||||
Domestic sales | Ps. | 546,737,992 | Ps. | 525,582,776 | Ps. | 482,783,367 | ||||||
Export sales: | ||||||||||||
United States | 433,886,747 | 363,034,328 | 290,154,951 | |||||||||
Canada, Central and South America | 34,143,179 | 33,226,644 | 29,166,372 | |||||||||
Europe | 39,777,811 | 38,204,717 | 24,982,143 | |||||||||
Far East | 7,949,015 | 6,235,197 | 4,682,432 | |||||||||
Total export sales | 515,756,752 | 440,700,886 | 348,985,898 | |||||||||
Total sales | Ps. | 1,062,494,744 | Ps. | 966,283,662 | Ps. | 831,769,265 | ||||||
F-74
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(i) | Valuation and qualifying accounts |
Balance at | Additions | |||||||||||||||
beginning of | charged to costs | Balance at | ||||||||||||||
Description | period | and expenses | Deductions | end of period | ||||||||||||
For the year ended December 31, 2006: | ||||||||||||||||
Reserves deducted in the balance sheet from the assets to which they apply: | ||||||||||||||||
Allowance for uncollectible trade accounts | Ps. | 2,611,300 | Ps. | 147,632 | Ps. | (181,642 | ) | Ps. | 2,577,290 | |||||||
Allowance for slow-moving inventory and obsolescence | 1,761,713 | 420,745 | (538,691 | ) | 1,643,767 | |||||||||||
For the year ended December 31, 2005: | ||||||||||||||||
Reserves deducted in the balance sheet from the assets to which they apply: | ||||||||||||||||
Allowance for uncollectible trade accounts | Ps. | 2,064,350 | Ps. | 1,610,164 | (Ps. | 1,063,214 | ) | Ps. | 2,611,300 | |||||||
Allowance for slow-moving inventory and obsolescence | 1,782,550 | 350,209 | (371,046 | ) | 1,761,713 | |||||||||||
For the year ended December 31, 2004: | ||||||||||||||||
Reserves deducted in the balance sheet from the assets to which they apply: | ||||||||||||||||
Allowance for uncollectible trade accounts | Ps. | 2,366,642 | Ps. | 1,102,111 | (Ps. | 1,404,403 | ) | Ps. | 2,064,350 | |||||||
Allowance for slow-moving inventory and obsolescence | 2,090,375 | 103,769 | (411,594 | ) | 1,782,550 |
(j) | Significant risks and uncertainties |
F-75
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(k) | Capitalized software costs |
F-76
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(l) | Supplemental condensed information on a U.S. GAAP basis |
2006 | 2005 | |||||||
ASSETS | ||||||||
Total current assets | Ps. | 385,461,379 | Ps. | 293,382,034 | ||||
Properties and equipment, net | 689,252,581 | 638,735,770 | ||||||
Intangible asset derived from the actuarial computation of labor obligations and other assets | 105,204,543 | 108,509,806 | ||||||
Total assets | Ps. | 1,179,918,503 | Ps. | 1,040,627,610 | ||||
LIABILITIES | ||||||||
Total current liabilities | Ps. | 170,495,486 | Ps. | 171,716,660 | ||||
Long-term debt | 505,474,457 | 521,923,673 | ||||||
Reserve for dismantlement and abandonment activities, sundry creditors and others | 30,371,410 | 29,593,251 | ||||||
Reserve for retirement payments, pensions and seniority premiums | 489,648,376 | 430,218,308 | ||||||
Non current deferred income tax liabilities | 4,570,969 | 2,335,943 | ||||||
Total liabilities | 1,200,560,698 | 1,155,787,835 | ||||||
Minority interest | 1,411,618 | 1,400,855 | ||||||
TOTAL EQUITY (DEFICIT) | (22,053,813 | ) | (116,561,080 | ) | ||||
Total liabilities and equity | Ps. | 1,179,918,503 | Ps. | 1,040,627,610 | ||||
F-77
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | 2004 | ||||||||||
Total revenues, net of IEPS Tax | Ps. | 1,129,349,393 | Ps. | 957,564,002 | Ps. | 780,301,891 | ||||||
Total costs and operating expenses | (474,208,169 | ) | (441,539,217 | ) | (345,146,102 | ) | ||||||
Comprehensive financing (cost) income | (17,493,867 | ) | (11,341,638 | ) | 2,239,699 | |||||||
Income before deferred income taxes hydrocarbon extraction duties and other minority interest | 637,647,357 | 504,683,147 | 437,395,488 | |||||||||
Hydrocarbon extraction duties and other taxes | (582,927,058 | ) | (582,700,771 | ) | (451,189,826 | ) | ||||||
Minority interest | (52,804 | ) | 1,117,236 | (195,427 | ) | |||||||
Net income (loss) | Ps. | 54,667,495 | (Ps. | 76,900,388 | ) | (Ps. | 13,989,765 | ) | ||||
F-78
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | 2004 | ||||||||||
Operating Activities | ||||||||||||
Net income (loss) for the year | Ps. | 54,667,495 | (Ps. | 76,900,388 | ) | (Ps. | 13,989,765 | ) | ||||
Adjustments to reconcile net (loss) income to cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 59,736,091 | 50,893,067 | 38,767,205 | |||||||||
Reserve for retirement payments, pensions and seniority premiums | 65,065,267 | 57,247,987 | 59,096,505 | |||||||||
Loss on disposal of fixed assets | 3,122,635 | 5,187,312 | 3,890,381 | |||||||||
Allowance for uncollectible trade accounts | 67,711 | 613,531 | 302,293 | |||||||||
Allowance for slow-moving inventory and obsolescence | (144,953 | ) | (20,837 | ) | 307,824 | |||||||
Minority interest | 65,332 | (1,117,236 | ) | 243,793 | ||||||||
Foreign exchange loss (gain) | 13,460,782 | (29,125,882 | ) | 6,054,335 | ||||||||
Profits sharing in subsidiaries | (4,007,188 | ) | (1,599,919 | ) | (2,279,883 | ) | ||||||
Deferred taxes | (1,793,835 | ) | 1,631,261 | |||||||||
Dismantlement and abandonment costs in fixed assets | (1,919,880 | ) | (1,697,762 | ) | (1,546,098 | ) | ||||||
Financial instruments | (71,967 | ) | (706,939 | ) | (5,932,890 | ) | ||||||
Gain from monetary position | (14,282,349 | ) | (16,994,450 | ) | (23,791,819 | ) | ||||||
173,965,141 | (12,590,255 | ) | 61,121,882 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts and notes receivable | (19,126,371 | ) | (53,948,289 | ) | (63,602,558 | ) | ||||||
Inventories | (8,173,318 | ) | (6,979,546 | ) | (3,093,574 | ) | ||||||
Other assets | (3,131,969 | ) | 3,541,924 | (16,725,750 | ) | |||||||
Accounts payable and accrued liabilities | (29,628,629 | ) | 23,534,377 | 67,736,572 | ||||||||
Cash flow provided by (used in) operating activities | 113,904,854 | (46,441,789 | ) | 45,436,572 | ||||||||
Investing Activities | ||||||||||||
Acquisition of fixed assets | (102,795,521 | ) | (75,585,683 | ) | (87,485,581 | ) | ||||||
Specific funds accounts-trade commission | (6,360,806 | ) | 7,225,819 | (35,165,450 | ) | |||||||
Cash flows used in investing activities | (109,156,327 | ) | (68,359,864 | ) | (122,651,031 | ) | ||||||
Financing Activities | ||||||||||||
Proceeds from new long term financing | 162,597,763 | 253,519,684 | 147,811,672 | |||||||||
Financing payments | (142,909,227 | ) | (135,642,380 | ) | (81,957,656 | ) | ||||||
Increase in Equity of Subsidiary Entities | 46,938,456 | 46,398,426 | 35,092,226 | |||||||||
Dividends paid to the Mexican Government | (259,245 | ) | (15,902,901 | ) | (11,169,118 | ) | ||||||
Cash flows provided by financing activities | 66,367,747 | 148,372,829 | 89,777,124 | |||||||||
Effects of inflation on cash and cash equivalents | (8,156,495 | ) | (1,944,769 | ) | (4,232,341 | ) | ||||||
Increase in cash and equivalents | 62,959,779 | 31,626,407 | 8,330,324 | |||||||||
Cash and cash equivalents, beginning of period | 125,724,053 | 94,097,646 | 85,767,324 | |||||||||
Cash and cash equivalents, end of period | Ps. | 188,683,832 | Ps. | 125,724,053 | Ps. | 94,097,648 | ||||||
Supplemental cash disclosures: | ||||||||||||
Interest paid (net of amounts capitalized) | Ps. | 51,235,309 | Ps. | 57,011,642 | Ps. | 38,737,883 | ||||||
Taxes paid | 612,314,507 | 521,653,340 | 481,336,375 | |||||||||
Supplemental non-cash disclosures: | ||||||||||||
Unrealized gains on available for sale securities | Ps. | 2,886,826 | Ps. | 800,103 | Ps. | 5,407,389 | ||||||
Additional minimum pension liability | (19,576,073 | ) | (18,979,124 | ) | 2,790,733 | |||||||
Derivative financial instruments | 5,083,038 | (4,752,172 | ) | 8,143,833 |
(m) | Recently issued accounting standards |
F-79
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
F-80
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(n) | Accounting for Buy/Sell Contracts |
F-81
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(o) | Deferred income taxes |
F-82
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | |||||||
Current deferred tax asset: | ||||||||
Accounts and other receivables | Ps. | 1,314,877 | Ps. | 1,766,025 | ||||
Inventories | 1,818,803 | 988,043 | ||||||
Accrued liabilities | 369,378 | 108,006 | ||||||
Prepaids and other current assets | 210,507 | 236,995 | ||||||
Total current deferred tax asset | 3,713,565 | 3,099,069 | ||||||
Less: current valuation allowance | (3,218,659 | ) | (2,391,842 | ) | ||||
Net current deferred tax asset | 494,906 | 707,227 | ||||||
Current deferred tax liability: | ||||||||
Prepaids and other current assets | — | (2,543 | ) | |||||
Total current deferred tax liability | — | (2,543 | ) | |||||
Noncurrent deferred tax asset: | ||||||||
Contingencies | 1,413,186 | 113,726 | ||||||
Derivative financial instruments | — | 23,996 | ||||||
Reserve for environmental costs | 485,150 | 1,144,544 | ||||||
Property taxes | — | 1,339,248 | ||||||
Tax loss carryforwards | 8,067 | 14,416,627 | ||||||
Fixed assets | 7,663,843 | 11,968,344 | ||||||
Total noncurrent deferred tax asset | 9,570,246 | 29,006,485 | ||||||
Less: noncurrent valuation allowance | (8,294,820 | ) | (26,175,519 | ) | ||||
Net noncurrent deferred tax asset | 1,275,426 | 2,830,966 | ||||||
Noncurrent deferred tax liability: | ||||||||
Derivative financial instruments | (626,190 | ) | (2,626,920 | ) | ||||
Fixed assets | (5,220,204 | ) | (2,539,989 | ) | ||||
Net noncurrent deferred tax liability | (5,846,394 | ) | (5,166,909 | ) | ||||
Total noncurrent deferred tax liability | (4,570,968 | ) | (2,335,943 | ) | ||||
Net deferred tax liability | (Ps. | 4,076,062 | ) | (Ps. | 1,631,259 | ) | ||
Net deferred tax liability under U.S. GAAP | (Ps. | 4,076,062 | ) | (Ps. | 1,631,259 | ) | ||
Net deferred tax liability under Mexican FRS | (Ps. | 4,430,625 | ) | (Ps. | 2,057,891 | ) | ||
Net deferred U.S. GAAP adjustments to the net deferred tax liability | (Ps. | 354,563 | ) | (Ps. | 426,632 | ) | ||
F-83
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(i) | the obligation of Petróleos Mexicanos to guarantee the repayment of the debt obligations undertaken by the Master Trust to finance PIDIREGAS; | |
(ii) | the obligation of Petróleos Mexicanos and the Subsidiary Guarantor which is sponsoring the relevant PIDIREGAS to make such payments to the Master Trust as may be necessary for the Master Trust to fulfill its payment obligations in respect of any financing the Master Trust has entered into in connection with such project; and | |
(iii) | the joint and several obligation of Petróleos Mexicanos and each of the aforementioned Subsidiary Guarantors to indemnify the Master Trust with respect to any liability incurred by the Master Trust in connection with PIDIREGAS. |
F-84
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
Principal Amount | ||||||||||||||||
Security | Issuer | Guarantor | Outstanding | |||||||||||||
5.75% Guaranteed Notes due 2015. | Master Trust | Petróleos Mexicanos | U.S. $ | 1,720,947 | ||||||||||||
6.125% Notes due 2008 | Master Trust | Petróleos Mexicanos | 709,844 | |||||||||||||
6.625% Guaranteed Bonds due 2035 | Master Trust | Petróleos Mexicanos | 1,249,000 | |||||||||||||
7.375% Notes due 2014 | Master Trust | Petróleos Mexicanos | 1,551,059 | |||||||||||||
7.875% Notes due 2009 | Master Trust | Petróleos Mexicanos | 907,603 | |||||||||||||
8.00% Notes due 2011 | Master Trust | Petróleos Mexicanos | 731,048 | |||||||||||||
8.5% Notes due 2008 | Master Trust | Petróleos Mexicanos | 930,079 | |||||||||||||
8.625% Bonds due 2022 | Master Trust | Petróleos Mexicanos | 754,234 | |||||||||||||
8.625% Bonds due 2023 | Master Trust | Petróleos Mexicanos | 225,395 | |||||||||||||
8.85% Guaranteed Notes due 2007 | Master Trust | Petróleos Mexicanos | 407,241 | |||||||||||||
9.125% Notes due 2010 | Master Trust | Petróleos Mexicanos | 927,824 | |||||||||||||
9.25% Guaranteed Bonds due 2018 | Master Trust | Petróleos Mexicanos | 334,915 | |||||||||||||
9.375% Guaranteed Notes due 2008 | Master Trust | Petróleos Mexicanos | 468,601 | |||||||||||||
9.50% Guaranteed Bonds due 2027 | Master Trust | Petróleos Mexicanos | 573,333 |
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
Principal Amount | ||||||||
Security | Issuer | Guarantor | Outstanding | |||||
8.85% Global Guaranteed Notes due 2007 | Petróleos Mexicanos | Pemex Exploration and Production, Pemex Refining and Pemex Gas and Basic Petrochemicals | U.S.$ | 162,526 | ||||
9.25% Global Guaranteed Bonds due 2018 | Petróleos Mexicanos | Pemex Exploration and Production, Pemex Refining and Pemex Gas and Basic Petrochemicals | 9,296 | |||||
9.375% Guaranteed Notes due 2008 | Petróleos Mexicanos | Pemex Exploration and Production, Pemex Refining and Pemex Gas and Basic Petrochemicals | 99,859 | |||||
9.50% Global Guaranteed Bonds due 2027 | Petróleos Mexicanos | Pemex Exploration and Production, Pemex Refining and Pemex Gas and Basic Petrochemicals | 102,149 |
F-86
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AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
BALANCE SHEET
As of December 31, 2006
Petróleos | Subsidiary | Non-Guarantor | PEMEX | |||||||||||||||||||||
Mexicanos(1) | Master Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | Ps. | 128,258,631 | Ps.21,859,987 | Ps. 2,869,471 | Ps. 35,695,743 | Ps. — | Ps. 188,683,832 | |||||||||||||||||
Accounts, notes receivable and other, | ||||||||||||||||||||||||
net and derivative financial | ||||||||||||||||||||||||
instruments | 40,062,263 | 5,198,537 | 49,874,082 | 41,289,855 | — | 136,424,737 | ||||||||||||||||||
Accounts receivable-intercompany | 49,275,610 | 39,150,670 | 660,278,318 | 65,856,811 | (814,561,409 | ) | — | |||||||||||||||||
Inventories, net | 421,988 | 7,654 | 49,576,339 | 9,809,358 | — | 59,815,339 | ||||||||||||||||||
Total current assets | 218,018,492 | 66,216,848 | 762,598,210 | 152,651,767 | (814,561,409 | ) | 384,923,908 | |||||||||||||||||
Long-term receivables — intercompany | 592,783,252 | 390,505,450 | 20,558,387 | 96,809,582 | (1,100,656,671 | ) | — | |||||||||||||||||
Investments in shares | 390,582,120 | — | 2,366,791 | 28,062,936 | (389,437,771 | ) | 31,574,076 | |||||||||||||||||
Other investments | 54,643,000 | — | (54,643,000 | ) | — | |||||||||||||||||||
Properties and equipment, net | 8,118,291 | — | 686,840,284 | 15,529,630 | — | 710,488,205 | ||||||||||||||||||
Intangible asset derived from the actuarial computation of labor obligations | 11,499,664 | — | 56,055,948 | 6,168,241 | — | 73,723,853 | ||||||||||||||||||
Other assets | 1,236,029 | — | 1,098,063 | 1,690,322 | — | 4,024,414 | ||||||||||||||||||
Total assets | Ps. 1,276,880,848 | Ps. 456,722,298 | Ps. 1,529,517,683 | Ps.300,912,478 | (Ps.2,359,298,851 | ) | Ps. 1,204,734,456 | |||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Current portion of long-term debt | Ps. 12,379,479 | Ps.31,479,174 | Ps. 1,316,284 | Ps. 18,665,576 | Ps. — | Ps. 63,840,513 | ||||||||||||||||||
Accounts payable — intercompany | 611,549,382 | 4,400,039 | 173,659,318 | 24,945,084 | (814,553,823 | ) | — | |||||||||||||||||
Other current liabilities | 4,230,464 | 12,350,210 | 53,480,220 | 36,025,181 | — | 106,086,075 | ||||||||||||||||||
Total current liabilities | 628,159,325 | 48,229,423 | 228,455,822 | 79,635,841 | (814,553,823 | ) | 169,926,588 | |||||||||||||||||
Long-term debt | 15,232,850 | 359,630,696 | 1,157,636 | 129,453,275 | — | 505,474,457 | ||||||||||||||||||
Long-term payables-intercompany | 525,715,789 | 48,862,179 | 561,493,040 | 19,228,662 | (1,155,299,670 | ) | — | |||||||||||||||||
Reserve for retirement payments, pensions, seniority premiums, dismantlement and abandonment activities, sundry creditors, and others | 66,692,580 | — | 377,190,274 | 45,496,793 | — | 489,379,647 | ||||||||||||||||||
Total Liabilities | 1,235,800,544 | 456,722,298 | 1,168,296,772 | 273,814,571 | (1,969,853,493 | ) | 1,164,780,692 | |||||||||||||||||
EQUITY | 41,080,304 | — | 361,220,911 | 27,097,907 | (389,445,358 | ) | 39,953,764 | |||||||||||||||||
Total liabilities and equity | Ps. 1,276,880,848 | Ps.456,722,298 | Ps. 1,529,517,683 | Ps. 300,912,478 | (Ps. 2,359,298,851 | ) | Ps. 1,204,734,456 | |||||||||||||||||
(1) | Petróleos Mexicanos is the issuer of the registered debt securities shown in Table 2 above and a full and unconditional guarantor of the registered debt securities shown in Table 1 above. The Master Trust is the issuer of the registered debt securities shown in Table 1 above, but is not an obligor on the registered debt securities shown in Table 2 above. The Subsidiary Guarantors are full and unconditional guarantors of the registered debt securities listed in both Table 1 and Table 2 above. |
F-87
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
U.S. GAAP RECONCILIATION OF EQUITY
For the year ended December 31, 2006
Petróleos | Subsidiary | Non-Guarantor | PEMEX | |||||||||||||||||||||
Mexicanos(1) | Master Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Equity under Mexican FRS | Ps.41,080,304 | Ps. | — | Ps.361,220,911 | Ps.27,097,907 | (Ps.389,445,358 | ) | Ps.39,953,764 | ||||||||||||||||
U.S. GAAP adjustments: | ||||||||||||||||||||||||
Exploration and drilling costs | — | 13,386,109 | — | — | 13,386,109 | |||||||||||||||||||
Pensions and seniority premiums | (507,499 | ) | — | (6,282,808 | ) | (799,760 | ) | — | (7,590,067 | ) | ||||||||||||||
Additional Pension liability | 696,227 | — | 4,062,498 | 471,302 | — | 5,230,027 | ||||||||||||||||||
Post-retirement benefits | (5,196,100 | ) | — | (27,952,516 | ) | (3,679,909 | ) | — | (36,828,525 | ) | ||||||||||||||
Accrued vacation | (78,586 | ) | — | (432,909 | ) | (57,403 | ) | — | (568,898 | ) | ||||||||||||||
Fixed asset adjustments: | ||||||||||||||||||||||||
Capitalized gains (losses) of derivative financial instruments, net | — | — | 2,950,403 | — | — | 2,950,403 | ||||||||||||||||||
Capitalization of interests, net | 26,041 | — | (8,185,715 | ) | 167,531 | — | (7,992,143 | ) | ||||||||||||||||
Impairment, net | — | — | (24,832,185 | ) | (3,993,038 | ) | — | (28,825,223 | ) | |||||||||||||||
Depreciation convention | (17,051 | ) | — | (710,009 | ) | (27,710 | ) | — | (754,770 | ) | ||||||||||||||
Derivative financial instruments | 591 | — | 7,851,325 | 2,541 | — | 7,854,457 | ||||||||||||||||||
Profit in inventory | — | — | (7,552,647 | ) | — | — | (7,552,647 | ) | ||||||||||||||||
Deferred income taxes | — | — | 354,563 | — | — | 354,563 | ||||||||||||||||||
Advance payment of minimum guaranteed dividends (APMGD) | (259,245 | ) | — | — | — | — | (259,245 | ) | ||||||||||||||||
Reclassification of Pemex Finance net income to minority interest | — | — | — | (1,411,618 | ) | — | (1,411,618 | ) | ||||||||||||||||
Investments in subsidiaries(2) | (56,671,954 | ) | 56,671,954 | — | ||||||||||||||||||||
Total U.S. GAAP adjustments, net | (62,007,576 | ) | — | (47,343,891 | ) | (9,328,064 | ) | 56,671,954 | (62,007,577 | ) | ||||||||||||||
Equity (Deficit) under U.S. GAAP | Ps.(20,927,272 | ) | Ps. — | Ps.313,877,020 | Ps.17,769,843 | (Ps.332,773,404 | ) | (Ps.22,053,813 | ) | |||||||||||||||
(1) | Petróleos Mexicanos is the issuer of the registered debt securities shown in Table 2 above and a full and unconditional guarantor of the registered debt securities shown in Table 1 above. The Master Trust is the issuer of the registered debt securities shown in Table 1 above, but is not an obligor on the registered debt securities shown in Table 2 above. The Subsidiary Guarantors are full and unconditional guarantors of the registered debt securities listed in both Table 1 and Table 2 above. | |
(2) | Reflects adjustment to investment balances of subsidiaries as a result of applying U.S. GAAP adjustments of such subsidiaries. |
F-88
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
BALANCE SHEET
Petróleos | Master | Subsidiary | Non-Guarantor | PEMEX | ||||||||||||||||||||
Mexicanos(1) | Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | Ps. | 39,442,854 | Ps. | 56,286,972 | Ps. | 2,558,776 | Ps. | 27,435,451 | Ps. | — | Ps. | 125,724,053 | ||||||||||||
Accounts, notes receivable and other, net | ||||||||||||||||||||||||
and derivative financial instruments | 55,566,722 | — | 22,964,464 | 47,741,576 | — | 126,272,762 | ||||||||||||||||||
Accounts receivable-intercompany | 142,538,283 | 34,696,429 | 481,516,202 | 86,857,936 | (745,608,850 | ) | — | |||||||||||||||||
Inventories, net | 385,329 | — | 45,891,574 | 6,355,658 | — | 52,632,561 | ||||||||||||||||||
Total current assets | 237,933,188 | 90,983,401 | 552,931,016 | 168,390,621 | (745,608,850 | ) | 304,629,376 | |||||||||||||||||
Long-term receivables - intercompany | 370,348,067 | 324,968,107 | 26,048,186 | 109,352,649 | (830,717,009 | ) | — | |||||||||||||||||
Investments in shares | 247,211,145 | — | 1,601,026 | 24,887,132 | (246,057,294 | ) | 27,642,009 | |||||||||||||||||
Properties and equipment, net | 8,679,538 | — | 645,150,451 | 15,477,834 | — | 669,307,823 | ||||||||||||||||||
Intangible asset derived from the actuarial computation of labor obligations | 12,537,025 | — | 60,640,623 | 6,592,683 | — | 79,770,331 | ||||||||||||||||||
Other assets | 174,841 | — | 1,134,686 | 2,158,889 | — | 3,468,416 | ||||||||||||||||||
Total assets | Ps. | 876,883,804 | Ps. | 415,951,508 | Ps. | 1,287,505,988 | Ps. | 326,859,808 | (Ps. | 1,822,383,153 | ) | Ps. | 1,084,817,955 | |||||||||||
LIABILITIES | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Current portion of long-term debt | Ps. | 8,164,709 | Ps. | 26,330,963 | Ps. | 773,806 | Ps. | 2,288,578 | — | Ps. | 37,558,056 | |||||||||||||
Accounts payable - intercompany | 494,335,186 | 5,527,296 | 172,677,593 | 73,068,776 | (745,608,851 | ) | — | |||||||||||||||||
Other current liabilities | 5,177,685 | 16,046,218 | 77,537,637 | 34,823,170 | — | 133,584,710 | ||||||||||||||||||
Total current liabilities | 507,677,580 | 47,904,477 | 250,989,036 | 110,180,524 | (745,608,851 | ) | 171,142,766 | |||||||||||||||||
Long-term debt | 27,501,294 | 347,108,343 | 1,152,105 | 146,161,931 | — | 521,923,673 | ||||||||||||||||||
Long-term payables-intercompany | 313,803,322 | 20,938,688 | 492,919,798 | 3,048,708 | (830,710,516 | ) | — | |||||||||||||||||
Reserve for retirement payments, pensions, seniority premiums, dismantlement and abandonment activities, sundry creditors, and others | 56,340,130 | — | 325,958,972 | 37,411,255 | — | 419,710,357 | ||||||||||||||||||
Total Liabilities | 905,322,326 | 415,951,508 | 1,071,019,911 | 296,802,418 | (1,576,319,367 | ) | 1,112,776,796 | |||||||||||||||||
EQUITY | (28,438,522 | ) | — | 216,486,077 | 30,057,390 | (246,063,786 | ) | (27,958,841 | ) | |||||||||||||||
Total liabilities and equity | Ps. | 876,883,804 | Ps. | 415,951,508 | Ps. | 1,287,505,988 | Ps. | 326,859,808 | (Ps. | 1,822,383,153 | ) | Ps. | 1,084,817,955 | |||||||||||
(1) | Petróleos Mexicanos is the issuer of the registered debt securities shown in Table 2 above and a full and unconditional guarantor of the registered debt securities shown in Table 1 above. The Master Trust is the issuer of the registered debt securities shown in Table 1 above, but is not an obligor on the registered debt securities shown in Table 2 above. The Subsidiary Guarantors are full and unconditional guarantors of the registered debt securities listed in both Table 1 and Table 2 above. |
F-89
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
U.S. GAAP RECONCILIATION OF EQUITY
For the year ended December 31, 2005
Petróleos | Subsidiary | Non-Guarantor | PEMEX | |||||||||||||||||||||
Mexicanos(1) | Master Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Equity under Mexican FRS | (Ps. 28,438,522 | ) | Ps | — | Ps. | 216,486,077 | Ps. | 30,057,390 | (Ps. 246,063,786 | ) | (Ps. 27,958,841 | ) | ||||||||||||
U.S. GAAP adjustments: | ||||||||||||||||||||||||
Exploration and drilling costs | — | — | 14,830,611 | — | — | 14,830,611 | ||||||||||||||||||
Pensions and seafaring premiums | ||||||||||||||||||||||||
Pensions and seniority premiums | (756,362 | ) | — | (7,734,931 | ) | (968,225 | ) | — | (9,459,518 | ) | ||||||||||||||
Additional Pension liability | 953,482 | — | 5,065,535 | 598,856 | — | 6,617,873 | ||||||||||||||||||
Post-retirement benefits | (5,899,769 | ) | — | (31,658,959 | ) | (4,129,667 | ) | — | (41,688,395 | ) | ||||||||||||||
Accrued vacation | (78,942 | ) | — | (434,762 | ) | (57,646 | ) | — | (571,350 | ) | ||||||||||||||
Fixed asset adjustments: | ||||||||||||||||||||||||
Capitalized gains (losses) of derivative financial instruments, net | — | — | (835,705 | ) | — | — | (835,705 | ) | ||||||||||||||||
Capitalization of interests, net | 12,095 | — | (10,536,909 | ) | (160,489 | ) | — | (10,685,303 | ) | |||||||||||||||
Impairment, net | — | — | (28,250,179 | ) | (4,409,474 | ) | — | (32,659,653 | ) | |||||||||||||||
Depreciation convention | (34,102 | ) | — | (1,420,020 | ) | (55,420 | ) | — | (1,509,542 | ) | ||||||||||||||
Derivative financial instruments | 202,167 | — | 7,574,564 | 5,758 | — | 7,782,489 | ||||||||||||||||||
Profit in inventory | — | — | (3,546,621 | ) | — | — | (3,546,621 | ) | ||||||||||||||||
Deferred income taxes | — | — | 426,631 | — | — | 426,631 | ||||||||||||||||||
Advance payment of minimum guaranteed dividends | (15,902,901 | ) | — | — | — | — | (15,902,901 | ) | ||||||||||||||||
Reclassification of Pemex Finance net income to minority interest | — | — | — | (1,400,855 | ) | — | (1,400,855 | ) | ||||||||||||||||
Investments in subsidiaries(2) | (67,097,907 | ) | 67,097,907 | — | ||||||||||||||||||||
Total U.S. GAAP adjustments, net | (88,602,239 | ) | — | (56,520,745 | ) | (10,577,162 | ) | 67,097,907 | (88,602,239 | ) | ||||||||||||||
Equity (Deficit) under U.S. GAAP | (Ps. 117,040,761 | ) | Ps. | — | Ps. | 159,965,332 | Ps. | 19,480,228 | (Ps. 178,965,879 | ) | (Ps. 116,561,080 | ) | ||||||||||||
(1) | Petróleos Mexicanos is the issuer of the registered debt securities shown in Table 2 above and a full and unconditional guarantor of the registered debt securities shown in Table 1 above. The Master Trust is the issuer of the registered debt securities shown in Table 1 above, but is not an obligor on the registered debt securities shown in Table 2 above. The Subsidiary Guarantors are full and unconditional guarantors of the registered debt securities listed in both Table 1 and Table 2 above. | |
(2) | Reflects adjustment to investment balances of subsidiaries as a result of applying US GAAP adjustments of such subsidiaries. |
F-90
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
STATEMENT OF INCOME
For the year ended December 31, 2006
Petróleos | Subsidiary | Non-Guarantor | PEMEX | |||||||||||||||||||||
Mexicanos(1) | Master Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Net sales | Ps. | 25,478,992 | Ps. | — | Ps. | 1,508,268,084 | Ps. | 686,187,726 | (Ps. | 1,157,440,058 | ) | Ps. | 1,062,494,744 | |||||||||||
Other (expenses) revenues, net | (616,006 | ) | — | 58,074,942 | 12,089,864 | 192,675 | 69,741,475 | |||||||||||||||||
Total revenues | 24,862,986 | — | 1,566,343,026 | 698,277,590 | (1,157,247,383 | ) | 1,132,236,219 | |||||||||||||||||
Costs and operating expenses: | ||||||||||||||||||||||||
Costs of sales | 202,305 | — | 848,759,431 | 687,288,033 | (1,133,144,294 | ) | 403,105,475 | |||||||||||||||||
Transportation and distribution expenses | — | — | 22,923,857 | 1,094,933 | — | 24,018,790 | ||||||||||||||||||
Administrative expenses | 29,989,747 | 29,987 | 40,571,274 | 7,840,544 | (24,409,469 | ) | 54,022,083 | |||||||||||||||||
Total costs and operating expenses | 30,192,052 | 29,987 | 912,254,562 | 696,223,510 | (1,157,553,763 | ) | 481,146,348 | |||||||||||||||||
Comprehensive financing cost (income) | (16,983,531 | ) | 10,184,669 | 30,903,954 | 6,863,121 | (7,985,509 | ) | 22,982,704 | ||||||||||||||||
Equity participation in subsidiaries | 35,222,680 | — | — | — | (35,222,680 | ) | — | |||||||||||||||||
Capitalization of Master Trust operations and others | — | 10,214,656 | — | (1,921,672 | ) | (8,292,984 | ) | — | ||||||||||||||||
Income (Loss) before hydrocarbon extraction duties and other | 46,877,145 | — | 623,184,510 | (6,730,713 | ) | (35,223,775 | ) | 628,107,167 | ||||||||||||||||
Hydrocarbon extraction duties and other | 347,389 | — | 578,008,036 | 4,499,566 | — | 582,854,991 | ||||||||||||||||||
Net income (loss) for the year | Ps. | 46,529,756 | Ps. | — | Ps. | 45,176,474 | (Ps. | 11,230,279 | ) | (Ps. | 35,223,775 | ) | Ps. | 45,252,176 | ||||||||||
(1) | Petróleos Mexicanos is the issuer of the registered debt securities shown in Table 2 above and a full and unconditional guarantor of the registered debt securities shown in Table 1 above. The Master Trust is the issuer of the registered debt securities shown in Table 1 above, but is not an obligor on the registered debt securities shown in Table 2 above. The Subsidiary Guarantors are full and unconditional guarantors of the registered debt securities listed in both Table 1 and Table 2 above. |
F-91
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
U.S. GAAP RECONCILIATION OF INCOME
For the year ended December 31, 2006
Petróleos | Master | Subsidiary | Non-Guarantor | PEMEX | ||||||||||||||||||||
Mexicanos(1) | Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Net income (loss) under Mexican FRS | Ps. | 46,529,756 | Ps. | — | Ps. | 45,176,474 | (Ps. | 11,230,279 | ) | (Ps. | 35,223,775 | ) | Ps. | 45,252,176 | ||||||||||
U.S. GAAP adjustments: | ||||||||||||||||||||||||
Exploration and drilling costs | — | — | (1,444,502 | ) | — | — | (1,444,502 | ) | ||||||||||||||||
Pension and seniority premiums | 248,864 | — | 1,452,123 | 168,465 | — | 1,869,452 | ||||||||||||||||||
Post-retirement benefits | 703,668 | — | 3,706,443 | 449,760 | — | 4,859,871 | ||||||||||||||||||
Accrued vacation | (2,879 | ) | — | (14,969 | ) | (1,957 | ) | — | (19,805 | ) | ||||||||||||||
Fixed asset adjustments: | ||||||||||||||||||||||||
Capitalized gains (losses) of derivative financial instruments, net | — | — | 3,786,109 | — | — | 3,786,109 | ||||||||||||||||||
Capitalization of interests, net | 13,946 | — | 2,351,194 | 328,018 | — | 2,693,158 | ||||||||||||||||||
Impairment, net | — | — | 3,417,993 | 416,437 | — | 3,834,430 | ||||||||||||||||||
Depreciation convention | 17,051 | — | 710,011 | 27,710 | — | 754,772 | ||||||||||||||||||
Derivative financial instruments | (201,576 | ) | — | 276,761 | (3,217 | ) | — | 71,968 | ||||||||||||||||
Profit in inventory | — | — | (4,006,026 | ) | — | — | (4,006,026 | ) | ||||||||||||||||
Available-for-sale securities | (2,886,826 | ) | — | — | — | — | (2,886,826 | ) | ||||||||||||||||
Deferred Income Taxes | — | — | (72,068 | ) | — | — | (72,068 | ) | ||||||||||||||||
Effect of inflation accounting on U.S. GAAP Adjustment | 8,569 | — | 16,821 | 2,200 | — | 27,590 | ||||||||||||||||||
Reclassification of Pemex Finance net income to minority interest | — | — | — | (52,804 | ) | — | (52,804 | ) | ||||||||||||||||
Investments in Subsidiaries | 11,514,502 | — | — | — | 11,514,502 | — | ||||||||||||||||||
Total U.S. GAAP adjustments | 9,415,319 | — | 10,179,890 | 1,334,612 | (11,514,502 | ) | 9,415,319 | |||||||||||||||||
Net income (loss) for the year | Ps. | 55,945,075 | Ps. | — | Ps. | 55,356,364 | (Ps. | 9,895,667 | ) | (Ps. | 46,738,277 | ) | Ps. | 54,667,495 | ||||||||||
(1) | Petróleos Mexicanos is the issuer of the registered debt securities shown in Table 2 above and a full and unconditional guarantor of the registered debt securities shown in Table 1 above. The Master Trust is the issuer of the registered debt securities shown in Table 1 above, but is not an obligor on the registered debt securities shown in Table 2 above. The Subsidiary Guarantors are full and unconditional guarantors of the registered debt securities listed in both Table 1 and Table 2 above. |
F-92
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
STATEMENT OF INCOME
For the year ended December 31, 2005
Petróleos | Subsidiary | Non-Guarantor | PEMEX | |||||||||||||||||||||
Mexicanos(1) | Master Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Net sales | Ps. | 23,189,557 | Ps. | — | Ps. | 1,378,345,484 | Ps. | 572,208,498 | (Ps. | 1,007,459,877 | ) | Ps. | 966,283,662 | |||||||||||
Other (expenses) revenues, net | 1,501,418 | (2,714,849 | ) | 27,972,129 | (14,441,822 | ) | 12,316,876 | |||||||||||||||||
Total revenues | 24,690,975 | — | 1,375,630,635 | 600,180,627 | (1,021,901,699 | ) | 978,600,538 | |||||||||||||||||
Costs and operating expenses: | ||||||||||||||||||||||||
Costs of sales | 139,116 | — | 782,681,086 | 594,865,114 | (1,001,868,376 | ) | 375,816,940 | |||||||||||||||||
Transportation and distribution expenses | — | — | 21,675,960 | 1,122,939 | — | 22,798,899 | ||||||||||||||||||
Administrative expenses | 24,727,461 | 26,590 | 44,556,481 | 5,186,842 | (25,800,023 | ) | 48,697,351 | |||||||||||||||||
Total costs and operating expenses | 24,866,577 | 26,590 | 848,913,527 | 601,174,895 | (1,027,668,399 | ) | 447,313,190 | |||||||||||||||||
Comprehensive financing cost (income) | (136,162 | ) | 3,965,493 | (7,153,562 | ) | 12,261,811 | (4,276,692 | ) | 4,660,888 | |||||||||||||||
Equity participation in subsidiaries | (79,053,646 | ) | — | — | — | 79,053,646 | — | |||||||||||||||||
Capitalization of Master Trust operations and others | — | 3,992,083 | — | 6,052,521 | (10,044,604 | ) | — | |||||||||||||||||
(Loss) income before hydrocarbon extraction duties and other, special tax on production and services and cumulative effect of adoption of new accounting standards | (79,093,086 | ) | — | 533,870,670 | (7,203,558 | ) | 79,052,434 | 526,626,460 | ||||||||||||||||
Hydrocarbon extraction duties and other | — | — | 579,101,760 | 4,028,766 | — | 583,130,526 | ||||||||||||||||||
Special tax on production and services (IEPS Tax) | — | — | 21,033,414 | — | — | 21,033,414 | ||||||||||||||||||
Cumulative effect of adoption of new accounting standards | (463,640 | ) | — | (1,196,452 | ) | (176,730 | ) | — | (1,836,822 | ) | ||||||||||||||
Net (loss) income for the year | (Ps. | 79,556,726 | ) | Ps. | — | (Ps. | 67,460,956 | ) | (Ps. | 11,409,054 | ) | Ps. | 79,052,434 | (Ps. | 79,374,302 | ) | ||||||||
(1) | Petróleos Mexicanos is the issuer of the registered debt securities shown in Table 2 above and a full and unconditional guarantor of the registered debt securities shown in Table 1 above. The Master Trust is the issuer of the registered debt securities shown in Table 1 above, but is not an obligor on the registered debt securities shown in Table 2 above. The Subsidiary Guarantors are full and unconditional guarantors of the registered debt securities listed in both Table 1 and Table 2 above. |
F-93
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
U.S. GAAP RECONCILIATION OF INCOME
For the year ended December 31, 2005
Petróleos | Subsidiary | Non-Guarantor | PEMEX | |||||||||||||||||||||
Mexicanos(1) | Master Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Net income (loss) under Mexican FRS | (Ps. | 79,556,726 | ) | Ps. | — | (Ps. | 67,460,956 | ) | (Ps. | 11,409,054 | ) | Ps. | 79,052,434 | (Ps. | 79,374,302 | ) | ||||||||
U.S. GAAP adjustments: | ||||||||||||||||||||||||
Exploration and drilling costs | — | — | (1,493,672 | ) | — | — | (1,493,672 | ) | ||||||||||||||||
Pension and seniority premiums | 155,735 | — | 730,272 | 89,771 | — | 975,778 | ||||||||||||||||||
Post-retirement benefits | 421,907 | — | 2,545,428 | 285,607 | — | 3,252,942 | ||||||||||||||||||
Accrued vacation | (2,258 | ) | — | (12,237 | ) | (1,612 | ) | — | (16,107 | ) | ||||||||||||||
Fixed asset adjustments: | ||||||||||||||||||||||||
Capitalized gains (losses) of derivative financial instruments, Net | — | — | (8,140,013 | ) | — | — | (8,140,013 | ) | ||||||||||||||||
Capitalization of interests, net | 12,095 | — | 1,599,867 | 246,452 | — | 1,858,414 | ||||||||||||||||||
Impairment, net | — | — | 2,295,395 | 3,725,275 | — | 6,020,670 | ||||||||||||||||||
Depreciation convention | 9,491 | — | 731,037 | 14,244 | — | 754,772 | ||||||||||||||||||
Derivative financial instruments | (803,727 | ) | (4,062,102 | ) | 5,140,110 | 719,245 | — | 993,526 | ||||||||||||||||
Profit in inventory | — | — | (2,675,545 | ) | — | — | (2,675,545 | ) | ||||||||||||||||
Available-for-sale securities | (800,103 | ) | — | — | — | — | (800,103 | ) | ||||||||||||||||
Deferred Income Taxes | — | — | 426,631 | — | — | 426,631 | ||||||||||||||||||
Effect of inflation accounting on U.S. GAAP Adjustment | 183,474 | — | 14,058 | 1,853 | — | 199,385 | ||||||||||||||||||
Reclassification of Pemex Finance net income to minority interest | — | — | — | 1,117,236 | — | 1,117,236 | ||||||||||||||||||
Investments in Subsidiaries | 3,297,300 | — | — | — | (3,297,300 | ) | — | |||||||||||||||||
Total U.S. GAAP adjustments | 2,473,914 | (4,062,102 | ) | 1,161,331 | 6,198,071 | (3,297,300 | ) | 2,473,914 | ||||||||||||||||
Net (loss) income for the year | (Ps. | 77,082,812 | ) | (Ps. | 4,062,102 | ) | (Ps. | 66,299,625 | ) | (Ps. | 5,210,983 | ) | Ps. | 75,755,134 | (Ps. | 76,900,388 | ) | |||||||
(1) | Petróleos Mexicanos is the issuer of the registered debt securities shown in Table 2 above and a full and unconditional guarantor of the registered debt securities shown in Table 1 above. The Master Trust is the issuer of the registered debt securities shown in Table 1 above, but is not an obligor on the registered debt securities shown in Table 2 above. The Subsidiary Guarantors are full and unconditional guarantors of the registered debt securities listed in both Table 1 and Table 2 above. |
F-94
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
STATEMENT OF INCOME
For the year ended December 31, 2004
Petróleos | Subsidiary | Non-Guarantor | PEMEX | |||||||||||||||||||||
Mexicanos(1) | Master Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Net sales | Ps. | 19,793,730 | Ps. | — | Ps. | 1,169,178,551 | Ps. | 455,271,941 | (Ps. | 812,474,957 | ) | Ps. | 831,769,265 | |||||||||||
Other (expenses) revenues, net | 451,720 | — | 2,535,925 | 10,426,939 | (1,421,277 | ) | 11,993,307 | |||||||||||||||||
Total revenues | 20,245,450 | — | 1,171,714,476 | 465,698,880 | (813,896,234 | ) | 843,762,572 | |||||||||||||||||
Costs and operating expenses: | ||||||||||||||||||||||||
Costs of sales | 190,421 | — | 618,794,981 | 456,516,317 | (791,532,635 | ) | 283,969,084 | |||||||||||||||||
Transportation and distribution expenses | — | — | 18,564,266 | 528,950 | (197,129 | ) | 18,896,087 | |||||||||||||||||
Administrative expenses | 23,524,435 | 8,325 | 31,202,941 | 4,938,798 | (20,207,773 | ) | 39,466,726 | |||||||||||||||||
Total costs and operating expenses | 23,714,856 | 8,325 | 668,562,188 | 461,984,065 | (811,937,537 | ) | 342,331,897 | |||||||||||||||||
Comprehensive financing cost (income) | (9,595,766 | ) | 5,674,044 | 13,687,205 | 8,851,180 | (11,038,413 | ) | 7,578,250 | ||||||||||||||||
Equity participation in subsidiaries | (32,367,176 | ) | — | — | — | 32,367,176 | — | |||||||||||||||||
Capitalization of Master Trust operations and others | — | 5,682,369 | — | 3,381,919 | (9,064,288 | ) | — | |||||||||||||||||
(Loss) income before hydrocarbon extraction duties and other, special tax on production and services and cumulative effect of adoption of new accounting standards | (26,240,816 | ) | — | 489,465,083 | (1,754,446 | ) | 32,382,604 | 493,852,425 | ||||||||||||||||
Hydrocarbon extraction duties and other | — | — | 449,486,748 | 1,687,650 | 15,427 | 451,189,825 | ||||||||||||||||||
Special tax on production and Services (IEPS tax) | — | — | 58,819,245 | — | — | 58,819,245 | ||||||||||||||||||
Cumulative effect of adoption of new accounting standards | (1,172,604 | ) | — | (7,048,147 | ) | (3,035,760 | ) | — | (11,256,511 | ) | ||||||||||||||
Net (loss) income for the year | (Ps. | 27,413,420 | ) | Ps. | — | (Ps. | 25,889,057 | ) | (Ps. | 6,477,856 | ) | Ps. | 32,367,177 | (Ps. | 27,413,156 | ) | ||||||||
(1) | Petróleos Mexicanos is the issuer of the registered debt securities shown in Table 2 above and a full and unconditional guarantor of the registered debt securities shown in Table 1 above. The Master Trust is the issuer of the registered debt securities shown in Table 1 above, but is not an obligor on the registered debt securities shown in Table 2 above. The Subsidiary Guarantors are full and unconditional guarantors of the registered debt securities listed in both Table 1 and Table 2 above. |
F-95
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
U.S. GAAP RECONCILIATION OF INCOME
For the year ended December 31, 2004
Petróleos | Master | Subsidiary | Non-Guarantor | PEMEX | ||||||||||||||||||||
Mexicanos(1) | Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Net income (loss) under Mexican FRS | (P | s.27,413,420 | ) | Ps. | — | (P | s.25,889,057 | ) | (P | s.6,477,856 | ) | P | s. 32,367,177 | (P | s.27,413,156 | ) | ||||||||
U.S. GAAP adjustments: | ||||||||||||||||||||||||
Exploration and drilling costs | — | — | (1,526,217 | ) | — | — | (1,526,217 | ) | ||||||||||||||||
Pension and seniority premiums | 12,781 | — | 607,624 | 184,001 | — | 804,406 | ||||||||||||||||||
Post-retirement benefits | (333,536 | ) | — | (2,232,829 | ) | (291,969 | ) | — | (2,858,334 | ) | ||||||||||||||
Accrued vacation | 18,850 | — | 103,812 | 13,764 | — | 136,426 | ||||||||||||||||||
Fixed asset adjustments: | ||||||||||||||||||||||||
Capitalized gains (losses) of hedging financial instruments, net | — | — | 890,056 | — | — | 890,056 | ||||||||||||||||||
Capitalization of interests, net | — | — | 2,053,170 | 43,347 | — | 2,096,517 | ||||||||||||||||||
Impairment, net | — | — | 7,492,900 | 2,353,485 | — | 9,846,385 | ||||||||||||||||||
Depreciation convention | 14,531 | — | 717,020 | 23,221 | — | 754,772 | ||||||||||||||||||
Derivative financial instruments | 2,663,154 | 3,991,117 | 1,146,393 | (1,685,744 | ) | 105,157 | 6,220,077 | |||||||||||||||||
Sales of shares of Repsol | 727,159 | — | — | — | — | 727,159 | ||||||||||||||||||
Profit in inventory | — | — | 1,117,526 | — | — | 1,117,526 | ||||||||||||||||||
Available-for-sale securities | (5,407,389 | ) | — | — | — | — | (5,407,389 | ) | ||||||||||||||||
Effect of inflation accounting on U.S. GAAP adjustment | 595,815 | — | 23,126 | 3,066 | — | 622,007 | ||||||||||||||||||
Investments in Subsidiaries | 15,026,869 | (15,026,869 | ) | — | ||||||||||||||||||||
Total U.S. GAAP adjustments | 13,318,234 | 3,991,117 | 10,392,581 | 643,171 | (14,921,712 | ) | 13,423,391 | |||||||||||||||||
Net (loss) income for the year | (P | s.14,095,186 | ) | P | s.3,991,117 | (P | s.15,496,476 | ) | (P | s.5,834,685 | ) | Ps. | 17,445,465 | (P | s.13,989,765 | ) | ||||||||
(1) | Petróleos Mexicanos is the issuer of the registered debt securities shown in Table 2 above and a full and unconditional guarantor of the registered debt securities shown in Table 1 above. The Master Trust is the issuer of the registered debt securities shown in Table 1 above, but is not an obligor on the registered debt securities shown in Table 2 above. The Subsidiary Guarantors are full and unconditional guarantors of the registered debt securities listed in both Table 1 and Table 2 above. |
F-96
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
STATEMENT OF CASH FLOW(1)
For the year ended December 31, 2006
Petróleos | Subsidiary | Non-Guarantor | PEMEX | |||||||||||||||||||||
Mexicanos(2) | Master Trust(2) | Guarantors(2) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Operating activities | ||||||||||||||||||||||||
Net income (loss) for the year | Ps. | 46,529,755 | Ps. | — | Ps. | 45,176,474 | (Ps. | 11,230,278 | ) | (Ps. | 35,223,775 | ) | Ps. | 45,252,176 | ||||||||||
Adjustments to reconcile net income (loss) to cash provided by operating activities | ||||||||||||||||||||||||
Depreciation and amortization | 671,365 | — | 61,751,502 | 870,138 | — | 63,293,005 | ||||||||||||||||||
Reserve for retirement payments, pensions and seniority premiums | 11,027,389 | — | 53,914,166 | 6,853,035 | — | 71,794,590 | ||||||||||||||||||
Impairment of fixed assets | — | — | — | 677,770 | — | 677,770 | ||||||||||||||||||
Loss on disposal of fixed assets | 24,640 | — | 2,841,924 | 256,071 | — | 3,122,635 | ||||||||||||||||||
Allowance for uncollectible trade accounts | 775 | — | (51,808 | ) | 118,745 | — | 67,712 | |||||||||||||||||
Allowance for decline in the value of inventory | (18,355 | ) | (71,196 | ) | (55,402 | ) | — | (144,953 | ) | |||||||||||||||
Foreign exchange loss (gain) | 19,161 | 12,424,980 | 623,031 | 393,610 | — | 13,460,782 | ||||||||||||||||||
Equity in earning in investees less dividend received and other | (29,504,163 | ) | — | — | (9,677,281 | ) | 35,223,775 | (3,957,669 | ) | |||||||||||||||
Gain from monetary position | (11,969,769 | ) | — | (4,055,741 | ) | 1,743,161 | — | (14,282,349 | ) | |||||||||||||||
Deferred income taxes | — | — | 1,031,619 | (160,214 | ) | — | 871,405 | |||||||||||||||||
Dismantlement and abandonment costs in fixed assets | — | — | (1,919,880 | ) | — | — | (1,919,880 | ) | ||||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||||||||||
Accounts and notes receivable | 5,794,221 | (5,218,119 | ) | (24,530,225 | ) | 4,859,732 | — | (19,094,391 | ) | |||||||||||||||
Inter-company changes and deductions | (95,910,710 | ) | (989,961 | ) | 111,959,301 | (77,657,471 | ) | 62,598,841 | — | |||||||||||||||
Inventories | (33,315 | ) | (8,640 | ) | (8,033,613 | ) | (2,326,201 | ) | — | (10,401,769 | ) | |||||||||||||
Other assets | (1,066,538 | ) | — | (97,896 | ) | 405,047 | — | (759,387 | ) | |||||||||||||||
Accounts payable and accrued liabilities | (756,665 | ) | (3,167,889 | ) | (31,573,950 | ) | 1,774,158 | — | (33,724,346 | ) | ||||||||||||||
Cash flows provided by operating activities | (75,192,209 | ) | 3,040,371 | 208,963,708 | (83,155,380 | ) | 62,598,841 | 114,255,331 | ||||||||||||||||
Investing activities: | ||||||||||||||||||||||||
Increase in fixed assets, net | (255,195 | ) | — | (96,785,134 | ) | (1,844,354 | ) | — | (98,884,683 | ) | ||||||||||||||
Specific funds account — trade commission | (6,360,806 | ) | (6,360,806 | ) | ||||||||||||||||||||
Inter-company (increase) decrease in investments | (324,123,643 | ) | (84,001,981 | ) | (283,066,677 | ) | 57,078,448 | 634,113,853 | — | |||||||||||||||
Investments in Subsidiaries | (2,791,641 | ) | — | (828,125 | ) | 10,009,921 | (10,601,946 | ) | (4,211,791 | ) | ||||||||||||||
Cash flows used in investing activities | (333,531,285 | ) | (84,001,981 | ) | (380,679,936 | ) | 65,244,015 | 623,511,907 | 109,506,799 | ) | ||||||||||||||
Financing Activities | ||||||||||||||||||||||||
Proceeds from long term financing | 39,272,061 | 112,873,129 | — | 10,452,573 | — | 162,597,763 | ||||||||||||||||||
Financing payments | (45,346,740 | ) | (92,562,167 | ) | — | (5,000,320 | ) | — | (142,909,227 | ) | ||||||||||||||
Inter-company (decrease) increase in financing | 499,292,811 | 28,815,829 | 137,931,823 | 31,978,772 | (698,019,235 | ) | — | |||||||||||||||||
Increase in equity of subsidiary entities | 13,211,400 | — | 33,478,562 | 248,493 | — | 46,938,455 | ||||||||||||||||||
Minimum guaranteed dividends paid to the Mexican government | (259,245 | ) | — | — | (11,958,006 | ) | 11,958,006 | (259,245 | ) | |||||||||||||||
Cash flows provided by financing activities | 506,170,287 | 49,126,791 | 171,410,385 | 25,721,512 | (686,061,229 | ) | 66,367,746 | |||||||||||||||||
Effects of inflation on cash and cash equivalents | (8,631,016 | ) | (2,592,166 | ) | 2,616,538 | 450,145 | — | (8,156,499 | ) | |||||||||||||||
Increase (decrease) in cash and cash equivalents | 88,815,777 | (34,426,985 | ) | 310,695 | 8,260,292 | — | 62,959,779 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 39,442,854 | 56,286,972 | 2,558,776 | 27,435,451 | — | 125,724,053 | ||||||||||||||||||
Cash and cash equivalents, end of period | Ps. | 128,258,631 | Ps.21,859,987 | Ps.2,869,471 | Ps.35,695,743 | Ps.— | Ps.188,683,832 | |||||||||||||||||
(1) | The accompanying cash flow is prepared in accordance with Mexican FRS. | |
(2) | Petróleos Mexicanos is the issuer of the registered debt securities shown in Table 2 above and a full and unconditional guarantor of the registered debt securities shown in Table 1 above. The Master Trust is the issuer of the registered debt securities shown in Table 1 above, but is not an obligor on the registered debt securities shown in Table 2 above. The Subsidiary Guarantors are full and unconditional guarantors of the registered debt securities listed in both Table 1 and Table 2 above. |
F-97
Table of Contents
AND SUBSIDIARY COMPANIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
STATEMENT OF CASH FLOW(1)
For the year ended December 31, 2005
Petróleos | Subsidiary | Non-Guarantor | PEMEX | |||||||||||||||||||||
Mexicanos(2) | Master Trust(2) | Guarantors(2) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Operating activities | ||||||||||||||||||||||||
Net income (loss) for the year | (Ps. 79,556,726 | ) | Ps. | — | (Ps. 67,460,956 | ) | (Ps. 11,409,054 | ) | Ps. | 79,052,434 | (Ps. 79,374,302 | ) | ||||||||||||
Adjustments to reconcile net income (loss) to cash provided by operating activities | ||||||||||||||||||||||||
Depreciation and amortization | 690,311 | — | 53,170,898 | 1,069,310 | — | 54,930,519 | ||||||||||||||||||
Reserve for retirement payments, pensions and seniority premiums | 8,998,132 | — | 46,828,327 | 5,650,248 | — | 61,476,707 | ||||||||||||||||||
Impairment of fixed assets | — | — | (2,203,639 | ) | 3,584,426 | — | 1,380,787 | |||||||||||||||||
Loss on disposal of fixed assets | 291,482 | — | 4,148,148 | 747,681 | — | 5,187,311 | ||||||||||||||||||
Allowance for uncollectible trade accounts | (3,801 | ) | — | 923,343 | (306,011 | ) | — | 613,531 | ||||||||||||||||
Allowance for slow-moving inventory and obsolescence | — | — | (20,837 | ) | — | — | (20,837 | ) | ||||||||||||||||
Foreign exchange loss (gain) | (3,184,037 | ) | (25,332,483 | ) | — | (609,361 | ) | — | (29,125,881 | ) | ||||||||||||||
Equity in earning in investees less dividend received and other | 77,487,902 | — | (449,924 | ) | (1,403,028 | ) | (79,052,434 | ) | (3,417,484 | ) | ||||||||||||||
Gain from monetary position | (4,514,503 | ) | — | (12,441,837 | ) | (38,110 | ) | — | (16,994,450 | ) | ||||||||||||||
Deferred income taxes | — | — | 2,057,891 | — | — | 2,057,891 | ||||||||||||||||||
Dismantlement and abandonment costs | — | — | (1,697,762 | ) | — | — | (1,697,762 | ) | ||||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||||||||||
Accounts and notes receivable | 19,322,830 | 347,343 | 28,302,552 | (39,694,728 | ) | (14,808,242 | ) | (6,530,245 | ) | |||||||||||||||
Inter-company changes and deductions | (11,359,858 | ) | 296,179,910 | (367,242,561 | ) | 82,422,509 | — | — | ||||||||||||||||
Inventories | (47,335 | ) | (153,678 | ) | (6,529,291 | ) | (2,952,882 | ) | — | (9,683,186 | ) | |||||||||||||
Other assets | 1,619,029 | (58,957 | ) | 760,843 | 1,014,538 | — | 3,335,453 | |||||||||||||||||
Accounts payable and accrued liabilities | (2,508,299 | ) | 2,502,337 | 5,101,221 | 17,958,646 | — | 23,053,905 | |||||||||||||||||
Cash flows provided by operating activities | 7,235,129 | 273,484,472 | (316,753,583 | ) | 56,034,184 | (14,808,242 | ) | 5,191,961 | ||||||||||||||||
Investing activities: | ||||||||||||||||||||||||
Increase in fixed assets, net | (694,361 | ) | — | (81,777,637 | ) | (2,445,395 | ) | — | (84,917,393 | ) | ||||||||||||||
Specific fundsaccount-trade commission | 7,225,819 | — | — | — | — | (7,225,819 | ) | |||||||||||||||||
Inter-company (increase) decrease in investments | (399,495,765 | ) | (301,112,606 | ) | 14,736,564 | (114,074,446 | ) | 799,946,253 | — | |||||||||||||||
Investments in Subsidiaries | — | — | — | 2,527,079 | — | 2,527,079 | ||||||||||||||||||
Cash flows used in investing activities | (392,964,307 | ) | (301,112,606 | ) | (67,041,073 | ) | (113,992,762 | ) | 799,946,253 | (75,164,495 | ) | |||||||||||||
Financing Activities | ||||||||||||||||||||||||
Proceeds from long term financing | 49,640,624 | 127,490,222 | 934,966 | 75,453,871 | — | 253,519,683 | ||||||||||||||||||
Financing payments | (58,286,870 | ) | (62,873,914 | ) | (11,229,645 | ) | (3,251,949 | ) | — | (135,642,378 | ) | |||||||||||||
Sale of future accounts receivable | — | — | (51,485,288 | ) | — | 12,441,459 | (39,043,829 | ) | ||||||||||||||||
Inter-company (decrease) increase in financing | 386,722,649 | (3,970,250 | ) | 416,796,326 | 397,531 | (799,946,256 | ) | — | ||||||||||||||||
Increase in equity of subsidiary entities | 15,085,960 | — | 31,312,465 | — | — | 46,398,425 | ||||||||||||||||||
Dividends paid | (15,902,902 | ) | — | — | (2,366,786 | ) | 2,366,786 | (15,902,902 | ) | |||||||||||||||
Cash flows provided by financing activities | 377,259,461 | 60,646,058 | 386,328,824 | 70,232,667 | (785,138,011 | ) | 109,328,999 | |||||||||||||||||
Effects of inflation on cash and cash equivalents | 2,277,495 | (617,155 | ) | (2,158,615 | ) | (1,446,491 | ) | — | (1,944,766 | ) | ||||||||||||||
Increase (decrease) in cash and cash equivalents | (6,192,222 | ) | 32,400,769 | 375,553 | 10,827,598 | — | 37,411,698 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 45,635,076 | 23,886,203 | 2,183,223 | 16,607,853 | — | 88,312,355 | ||||||||||||||||||
Cash and cash equivalents, end of period | Ps. 39,442,854 | Ps. | 56,286,972 | Ps. | 2,558,776 | Ps. | 27,435,451 | Ps. | — | Ps. | 125,724,053 | |||||||||||||
(1) | The accompanying cash flow is prepared in accordance with Mexican FRS. | |
(2) | Petróleos Mexicanos is the issuer of the registered debt securities shown in Table 2 above and a full and unconditional guarantor of the registered debt securities shown in Table 1 above. The Master Trust is the issuer of the registered debt securities shown in Table 1 above, but is not an obligor on the registered debt securities shown in Table 2 above. The Subsidiary Guarantors are full and unconditional guarantors of the registered debt securities listed in both Table 1 and Table 2 above. |
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Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
As of December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Proved properties | Ps. | 814,251,220 | Ps. | 712,540,925 | Ps. | 614,919,061 | ||||||
Construction in progress | 54,659,956 | 54,680,906 | 65,375,434 | |||||||||
Accumulated depreciation and amortization | (369,896,470 | ) | (318,215,448 | ) | (274,218,779 | ) | ||||||
Net capitalized costs | Ps. | 499,014,706 | Ps. | 449,006,383 | Ps. | 406,075,716 | ||||||
Year Ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Exploration | Ps. | 12,117,260 | Ps. | 15,171,804 | Ps. | 22,567,890 | ||||||
Development | 85,001,222 | 77,992,553 | 72,487,582 | |||||||||
Total costs incurred | Ps. | 97,118,482 | Ps. | 93,164,357 | Ps. | 95,055,472 | ||||||
F-99
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
Year Ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Revenues from sale of oil and gas | Ps.857,704,121 | Ps. | 745,320,117 | Ps. | 603,190,203 | |||||||
Hydrocarbon duties | 562,082,158 | 515,167,531 | 409,603,317 | |||||||||
Excess-gains taxes | 7,925,886 | 58,664,538 | 36,980,005 | |||||||||
Production costs (excluding taxes) | 72,924,057 | 74,071,052 | 68,717,859 | |||||||||
Other costs and expenses | 36,687,531 | 50,642,117 | 38,161,917 | |||||||||
Exploration expenses | 5,058,454 | 5,409,644 | 5,649,299 | |||||||||
Depreciation, depletion, amortization and accretion | 47,640,143 | 38,994,451 | 26,457,628 | |||||||||
732,318,229 | 742,949,333 | 585,570,025 | ||||||||||
Results of operations for oil and gas producing activities | Ps.125,385,892 | Ps. | 2,370,784 | Ps. | 17,620,178 | |||||||
2006 | 2005 | 2004 | ||||||||||
Weighted average sales price per barrel of oil equivalent(1) | U.S.$ | 43.39 | U.S.$ | 43.75 | U.S.$ | 30.00 | ||||||
Crude oil, per barrel | U.S.$ | 47.97 | U.S.$ | 47.04 | U.S.$ | 29.52 | ||||||
Natural gas, per thousand cubic feet | U.S.$ | 6.04 | U.S.$ | 6.85 | U.S.$ | 6.64 |
(1) | To convert dry gas to barrel of oil equivalent, a factor is used of 5.201 thousand cubic feet of dry gas per barrel of oil. |
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Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
• | Ordinary Hydrocarbon Duty—A variable rate (which fluctuates between 78.68% and 87.81% depending on the year), was applied depending on the weighted average Mexican crude oil export price and natural gas prices as of December 31, 2006. This duty is applied to the annual value of extracted production of crude oil and natural gas minus certain permitted deductions (including specific depreciation investments, certain costs and expenses, and the other duties referred to below, subject to certain conditions). The allowed deductions may not exceed the value obtained of multiplying the produced volume for a particular year times the price of U.S. $6.5 per barrel of oil equivalent for crude oil and associated natural gas, and U.S. $2.7 per thousand of cubic feet of non-associated natural gas, respectively. | |
• | Hydrocarbon Duty for the Oil Revenues Stabilization Fund—A rate of 10% was applied to the value of the extracted crude oil production because the weighted average crude oil export price as of December 31, 2006 exceeded U.S. $31.00 per barrel. | |
• | Duty for the Fund for Scientific and Technological Research on Energy—A rate of 0.05% is applied to the value of extracted crude oil and natural gas production for the year. | |
• | Duty for Fiscal Monitoring of Oil Activities—A rate of 0.003% was applied of extracted production of crude oil and natural gas for the year. | |
• | Additional Duty—This duty is applied only if annual crude oil production is below target production for the years 2006 through 2008, pursuant to a formula that calculates the difference between target production and actual crude oil production. If target production is not reached by reason offorce majeure, an act of God or energy policy, this duty is not collected. | |
• | Extraordinary Duty on Crude Oil Exports—A rate of 13.1% was applied to the value that resulted from multiplying the annual export volume by the difference between the annual weighted average price of one Mexican barrel of crude oil and the budgeted crude oil price of U.S. $42.80 per barrel. |
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Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Millions of barrels) | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Proved developed and undeveloped reserves | ||||||||||||
At January 1 | 13,671 | 14,803 | 16,041 | |||||||||
Revisions2 | 433 | 197 | (109 | ) | ||||||||
Extensions and discoveries2 | 79 | 25 | 245 | |||||||||
Production | (1,332 | ) | (1,354 | ) | (1,374 | ) | ||||||
At December 31 | 12,849 | 13,671 | 14,803 | |||||||||
Proved developed reserves at December 31 | 8,978 | 9,617 | 9,745 | |||||||||
1. | Crude oil and condensate reserves include the fraction of liquefiable hydrocarbons recoverable in natural gas processing plants. | |
2. | Revisions and extensions include positive and negative changes due to new data gathered through drilling of extension wells. |
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Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Billions of cubic feet) | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Proved developed and undeveloped reserves | ||||||||||||
At January 1 | 14,557 | 14,807 | 14,850 | |||||||||
Revisions1 | 280 | 661 | 547 | |||||||||
Extensions and discoveries1 | 505 | 394 | 641 | |||||||||
Production2 | (1,487 | ) | (1,305 | ) | (1,231 | ) | ||||||
At December 31 | 13,856 | 14,557 | 14,807 | |||||||||
Proved developed reserves at December 31 | 8,688 | 8,888 | 8,325 | |||||||||
Note: | Table amounts may not total due to rounding. | |
1. | Revisions and extensions include positive and negative changes due to new data gathered through drilling of extension wells. |
2. | Production refers to dry gas, although natural gas production reported in other tables refer to wet, sour gas. There is a shrinkage in volume when natural gas liquids and impurities are extracted to obtain dry gas. Therefore, reported natural gas volumes are greater than dry gas volumes. |
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Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
As of December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Future cash inflows | U.S.$ | 615,337 | U.S.$ | 653,914 | U.S.$ | 493,971 | ||||||
Future production costs (excluding taxes) | (82,696 | ) | (85,432 | ) | (70,922 | ) | ||||||
Future development costs | (35,845 | ) | (35,966 | ) | (29,314 | ) | ||||||
Future cash flows before tax | 496,797 | 532,516 | 393,735 | |||||||||
Futureproduction-and-excess-gains tax | (410,021 | ) | (448,162 | ) | (311,918 | ) | ||||||
Future income taxes | — | — | — | |||||||||
Future net cash flows | 86,775 | 84,354 | 81,817 | |||||||||
Effect of discounting net cash flows at 10% | (31,699 | ) | (32,728 | ) | (35,193 | ) | ||||||
Standardized measure of discounted future net cash flows | U.S.$ | 55,076 | U.S.$ | 51,626 | U.S.$ | 46,624 | ||||||
Note: | Table amounts may not total due to rounding. |
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Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 | 2005 | 2004 | ||||||||||
Sales of oil and gas produced, net of production costs | U.S.$ | (68,136 | ) | U.S.$ | (55,988 | ) | U.S.$ | (41,740 | ) | |||
Net changes in prices and production costs | 2,908 | 122,257 | 46,463 | |||||||||
Extensions and discoveries | 4,573 | 3,149 | 3,629 | |||||||||
Development cost incurred during the year | 7,803 | 7,067 | 6,207 | |||||||||
Changes in estimated development costs | (6,796 | ) | (11,453 | ) | (5,212 | ) | ||||||
Reserves revisions and timing change | 14,910 | 3,419 | 9,082 | |||||||||
Accretion of discount of pre-tax net cash flows | 28,482 | 20,523 | 17,507 | |||||||||
Net changes in production-and excess-gains taxes | 19,707 | (83,972 | ) | (26,962 | ) | |||||||
Aggregate change in standardized measure | U.S.$ | 3,450 | U.S.$ | 5,002 | U.S.$ | 8,974 | ||||||
Standardized measure | ||||||||||||
As of January 1 | 51,626 | 46,624 | 37,650 | |||||||||
As of December 31 | 55,076 | 51,626 | 46,624 | |||||||||
Change | U.S.$ | 3,450 | U.S.$ | 5,002 | U.S.$ | 8,974 | ||||||
Note: | Table amounts may not total due to rounding. |
F-105