Mexican Petroleum | United Mexican States | |
(Translation of registrant’s name into English) | (Jurisdiction of incorporation or organization) |
Item 1. | Identity of Directors, Senior Management and Advisers | 5 | ||||||
Item 2. | Offer Statistics and Expected Timetable | 5 | ||||||
Item 3. | Key Information | 5 | ||||||
Item 4. | Information on the Company | 12 | ||||||
Item 5. | Operating and Financial Review and Prospects | 97 | ||||||
Item 6. | Directors, Senior Management and Employees | 133 | ||||||
Item 7. | Major Shareholders and Related Party Transactions | 159 | ||||||
Item 8. | Financial Information | 160 | ||||||
Item 9. | The Offer and Listing | 167 | ||||||
Item 10. | Additional Information | 167 | ||||||
Item 11. | Quantitative and Qualitative Disclosures About Market Risk | 174 | ||||||
Item 12. | Description of Securities Other than Equity Securities | 179 | ||||||
Item 13. | Defaults, Dividend Arrearages and Delinquencies | 180 | ||||||
Item 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds | 180 | ||||||
Item 15. | Controls and Procedures | 180 | ||||||
Item 16A. | Audit Committee Financial Expert | 181 | ||||||
Item 16B. | Code of Ethics | 181 | ||||||
Item 16C. | Principal Accountant Fees and Services | 181 | ||||||
Item 16D. | Exemptions from the Listing Standards for Audit Committees | 183 | ||||||
Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers | 183 | ||||||
Item 17. | Financial Statements | 184 | ||||||
Item 18. | Financial Statements | 184 | ||||||
Item 19. | Exhibits | 184 |
i
• | 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; |
2
• | significant economic or political developments in Mexico; | |
• | developments affecting the energy sector; and | |
• | changes in our regulatory environment. |
3
4
Item 1. | Identity of Directors, Senior Management and Advisers |
Item 2. | Offer Statistics and Expected Timetable |
Item 3. | Key Information |
5
Year Ended December 31,(1)(2) | ||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2007(4) | |||||||||||||||||||
(in millions of constant pesos as of | (in millions | |||||||||||||||||||||||
December 31, 2007)(3) | of U.S. | |||||||||||||||||||||||
dollars) | ||||||||||||||||||||||||
Income Statement Data | ||||||||||||||||||||||||
Amounts in accordance with Mexican FRS: | ||||||||||||||||||||||||
Net sales(5) | Ps. | 736,254 | Ps. | 865,122 | Ps. | 1,003,831 | Ps. | 1,103,510 | Ps. | 1,136,035 | $ | 104,548 | ||||||||||||
Total sales net of the IEPS tax | 625,852 | 804,092 | 982,007 | 1,103,510 | 1,136,035 | 104,548 | ||||||||||||||||||
Operating income | 433,643 | 509,922 | 539,703 | 604,277 | 590,431 | 54,336 | ||||||||||||||||||
Comprehensive financing result | 36,077 | 7,863 | 4,836 | 23,847 | 20,047 | 1,845 | ||||||||||||||||||
Net income (loss) for the year | (47,698 | ) | (28,443 | ) | (82,358 | ) | 46,953 | (18,308 | ) | (1,685 | ) | |||||||||||||
Balance Sheet Data (end of period) | ||||||||||||||||||||||||
Amounts in accordance with Mexican FRS: | ||||||||||||||||||||||||
Cash and cash equivalents | 86,063 | 94,686 | 130,450 | 195,777 | 170,997 | 15,737 | ||||||||||||||||||
Total assets | 992,193 | 1,057,088 | 1,125,596 | 1,250,020 | 1,330,281 | 122,424 | ||||||||||||||||||
Long-term debt | 356,302 | 452,761 | 541,543 | 524,475 | 424,828 | 39,096 | ||||||||||||||||||
Total long-term liabilities | 777,698 | 863,164 | 977,030 | 1,032,251 | 990,909 | 91,192 | ||||||||||||||||||
Equity (deficit) | 53,820 | 37,199 | (29,010 | ) | 41,456 | 49,908 | 4,593 | |||||||||||||||||
Amounts in accordance with U.S. GAAP: | ||||||||||||||||||||||||
Total sales net of IEPS tax | 625,679 | 803,672 | 982,007 | 1,103,510 | 1,136,035 | 104,548 | ||||||||||||||||||
Operating income net of IEPS tax | 288,513 | 446,471 | 524,954 | 611,476 | 581,482 | 53,513 | ||||||||||||||||||
Comprehensive financing (cost) income | (31,465 | ) | 2,323 | (10,116 | ) | (18,152 | ) | (25,610 | ) | (2,357 | ) | |||||||||||||
Net income (loss) for the period | (77,816 | ) | (14,516 | ) | (79,791 | ) | 56,722 | (32,642 | ) | (3,004 | ) | |||||||||||||
Total assets | 956,988 | 1,018,574 | 1,079,745 | 1,224,272 | 1,211,301 | 111,474 | ||||||||||||||||||
Equity (deficit) | (52,129 | ) | (54,505 | ) | (120,943 | ) | (22,883 | ) | (198,083 | ) | (18,229 | ) | ||||||||||||
Other Financial Data | ||||||||||||||||||||||||
Amounts in accordance with Mexican FRS: | ||||||||||||||||||||||||
Depreciation and Amortization | 47,580 | 46,744 | 56,996 | 65,672 | 72,592 | 6,681 | ||||||||||||||||||
Investments in fixed assets at cost(6) | 79,641 | 83,742 | 89,855 | 104,647 | 155,121 | 14,276 | ||||||||||||||||||
Ratio of earnings to fixed charges: | ||||||||||||||||||||||||
Mexican FRS(7) | — | — | — | 1.8581 | — | n.a. | ||||||||||||||||||
U.S. GAAP(7) | — | — | — | 2.0680 | — | n.a. |
(1) | Includes Petróleos Mexicanos, the subsidiary entities and the subsidiary companies (including the Master Trust, FideicomisoF/163 and RepCon Lux, S.A., 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. | |
(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 21 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, 2007 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 exchange rate established by the SHCP for accounting purposes of Ps. 10.8662 = U.S. $1.00 at December 31, 2007. 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. | |
(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 and 2007, when the IEPS tax rate was negative. | |
(6) | Includes investments in fixed assets and capitalized interest until 2006, and, beginning in 2007, capitalized comprehensive financial result. See Note 3i. to our consolidated financial statements included herein and “Item 5—Operating and Financial Review andProspects—Liquidity and Capital Resources.” For 2003, it excludes certain expenditures charged to the oil field exploration and depletion reserve. | |
(7) | Under Mexican FRS, earnings for the years ended December 31, 2003, 2004, 2005 and 2007 were insufficient to cover fixed charges. The amount by which fixed charges exceeded earnings was Ps. 49,612 million, Ps. 45,026 million, Ps. 86,639 million and Ps. 16,174 million, respectively. Under U.S. GAAP, earnings for the years ended December 31, 2003, 2004, 2005 and 2007 were insufficient to cover fixed charges. The amount by which fixed charges exceeded earnings was Ps. 79,844 million, Ps. 32,601 million, Ps. 84,708 million and Ps. 33,160 million, respectively. |
6
Period | Exchange Rate | |||||||||||||||
Year Ended December 31, | High | Low | Average(1) | Period End | ||||||||||||
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 | 10.902 | 10.799 | ||||||||||||
2007 | 11.269 | 10.667 | 10.925 | 10.917 | ||||||||||||
2008 | ||||||||||||||||
January | 10.973 | 10.819 | 10.906 | 10.819 | ||||||||||||
February | 10.824 | 10.673 | 10.768 | 10.726 | ||||||||||||
March | 10.849 | 10.630 | 10.733 | 10.630 | ||||||||||||
April | 10.601 | 10.442 | 10.515 | 10.510 | ||||||||||||
May | 10.570 | 10.306 | 10.438 | 10.329 | ||||||||||||
June(2) | 10.437 | 10.274 | 10.333 | 10.290 |
(1) | Average of month-end rates, except for 2008 monthly exchange rates. | |
(2) | For the period from June 1, 2008 to June 25, 2008. |
7
8
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10
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Item 4. | Information on the Company |
12
• | theLey Reglamentaria del Artículo 27 Constitucional en el Ramo del Petróleo (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 (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, 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. |
13
• | the Regulatory Law; | |
• | theLey Orgánica de la Administración Pública Federal(Federal Public Administration Organic Law); and | |
• | theLey de la Comisión Reguladora de Energía(Energy Regulatory Commission Law). |
• | theLey Orgánica de Petróleos Mexicanos(Organic Law of Petróleos Mexicanos), which will replace the Organic Law; and | |
• | theLey de la Comisión del Petróleo(Petroleum Regulatory Commission Law). |
1. | Third parties would be able to engage in the transportation, storage and distribution of our petroleum products and basic petrochemicals. | |
2. | The private sector would be permitted to participate in crude oil processing, as long as PEMEX does not transfer the ownership rights to hydrocarbons. | |
3. | Third parties would be able to construct, operate and own pipelines and equipment in accordance with PEMEX’s technical and regulatory framework. | |
4. | Payment obligations in respect of construction and services contracts would always be made in cash and in no case would ownership rights over hydrocarbons be granted. | |
5. | A Petroleum Commission with technical and operative autonomy would be created to support the Ministry of Energy in strategic planning related to the energy sector. The Petroleum Commission would be composed of five members appointed by the President of Mexico. |
14
6. | “Citizen Bonds” could be issued, which may be held only by Mexican citizens, retirement and pension funds in Mexico and investment companies on behalf of individuals. The face value of each “Citizen Bond” would be Ps. 100.00, and it would not grant any equity or voting rights in PEMEX; however, the bonds’ returns would be linked to our performance. | |
7. | An additional commissioner would be appointed for the purpose of representing the interests of the “Citizen Bond” holders and to issue reports on the accuracy, fairness and sufficiency of the information submitted by the Board of Directors of Petróleos Mexicanos. | |
8. | PEMEX would be granted greater administrative autonomy in adopting corporate governance practices in line with international standards. |
• | First, PEMEX identifies a project as a PIDIREGAS and the Mexican Government authorizes expenditures related to its development. | |
• | 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. |
15
16
Year ended December 31,(1)(2) | |||||||||||||||||||||||||
Budget | |||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2008(3) | ||||||||||||||||||||
(millions of nominal pesos) | |||||||||||||||||||||||||
Pemex-Exploration and Production | |||||||||||||||||||||||||
Ku-Maloob-Zaap | Ps. | 3,072 | Ps. | 10,222 | Ps. | 16,424 | Ps. | 26,724 | Ps. | 35,706 | Ps. | 22,484 | |||||||||||||
Cantarell | 23,011 | 27,240 | 25,030 | 25,992 | 29,049 | 48,350 | |||||||||||||||||||
Strategic Gas Program(4) | 18,079 | 23,413 | 20,635 | 23,420 | 23,401 | 27,897 | |||||||||||||||||||
Burgos | 10,995 | 16,344 | 12,439 | 15,726 | 14,622 | 16,512 | |||||||||||||||||||
Antonio J. Bermúdez | 3,622 | 6,270 | 7,045 | 6,908 | 8,484 | 9,628 | |||||||||||||||||||
Aceite Terciario del Golfo(5) | — | — | — | — | 4,938 | 15,988 | |||||||||||||||||||
Chuc(6) | 1,753 | 4,152 | 2,266 | 3,150 | 3,702 | 3,442 | |||||||||||||||||||
Jujo-Tecominoacán | 1,668 | 1,699 | 2,340 | 2,943 | 3,696 | 5,035 | |||||||||||||||||||
Arenque | 1,089 | 2,274 | 2,344 | 2,231 | 3,533 | 1,970 | |||||||||||||||||||
Bellota-Chinchorro | 1,399 | 2,001 | 1,550 | 1,985 | 2,903 | 3,758 | |||||||||||||||||||
Caan(7) | 834 | 1,393 | 1,808 | 2,241 | 2,494 | 2,741 | |||||||||||||||||||
El Golpe-Puerto Ceiba | 1,915 | 1,695 | 2,124 | 1,634 | 2,002 | 1,774 | |||||||||||||||||||
Delta del Grijalva | 641 | 728 | 1,100 | 1,663 | 1,851 | 2,943 | |||||||||||||||||||
Ek-Balam | 748 | 668 | 639 | 603 | 1,493 | 2,596 | |||||||||||||||||||
Integral Poza Rica | 424 | 938 | 1,192 | 1,321 | 1,295 | 1,595 | |||||||||||||||||||
Cactus-Sitio Grande | 1,276 | 918 | 493 | 1,221 | 1,045 | 1,110 | |||||||||||||||||||
Integral Yaxche | 18 | 158 | 383 | 271 | 617 | 1,809 | |||||||||||||||||||
Cárdenas | 241 | 215 | 143 | 245 | 494 | 591 | |||||||||||||||||||
Carmito-Artesa | 606 | 614 | 320 | 325 | 366 | 429 | |||||||||||||||||||
Och-Uech-Kax | 750 | 718 | 347 | 268 | 64 | 923 | |||||||||||||||||||
Ayín-Alux | 37 | 108 | 30 | 37 | 15 | 559 | |||||||||||||||||||
Lakach(8) | — | — | — | — | — | 419 | |||||||||||||||||||
Agua Fría-Coapechaca-Tajín(5) | 1,860 | 2,402 | 1,628 | 2,207 | — | — | |||||||||||||||||||
Taratunich(7) | 938 | 787 | 489 | 441 | — | — | |||||||||||||||||||
Pol(6) | 1,466 | 481 | 217 | 186 | — | — | |||||||||||||||||||
Amatitlán-Profeta-Tzapotempa-Vinazco(5) | 465 | 650 | 291 | 106 | — | — | |||||||||||||||||||
Integral Batab(6) | 388 | 593 | 17 | 27 | — | — | |||||||||||||||||||
Integral Abkatún(7) | 1,856 | 2,769 | 409 | 26 | — | — | |||||||||||||||||||
Integral Kanaab(7) | 284 | 186 | 121 | 26 | — | — | |||||||||||||||||||
Total | 79,435 | 109,638 | 101,823 | 121,929 | 141,769 | 172,553 | |||||||||||||||||||
Pemex-Refining | |||||||||||||||||||||||||
Madero(9) | 11,323 | — | — | — | — | — | |||||||||||||||||||
Salamanca(10) | 2,679 | — | — | — | — | — | |||||||||||||||||||
Tula(11) | 133 | — | — | — | — | — | |||||||||||||||||||
Minatitlán | — | 445 | 2,459 | 7,861 | 8,855 | 6,351 | |||||||||||||||||||
Fuel Quality Investments(8) | — | — | — | — | — | 2,602 | |||||||||||||||||||
Residual Conversion from Tula Refinery | — | — | — | — | — | — | |||||||||||||||||||
Residual Conversion from Salamanca Refinery | — | — | — | — | — | — | |||||||||||||||||||
Total | 14,134 | 445 | 2,459 | 7,861 | 8,855 | 8,953 | |||||||||||||||||||
Pemex-Gas and Basic Petrochemicals | |||||||||||||||||||||||||
Modular Cryogenic Plants in Reynosa | 1,105 | 537 | 1,270 | 477 | 1,696 | 1,466 | |||||||||||||||||||
Total | 1,105 | 537 | 1,270 | 477 | 1,696 | 1,466 | |||||||||||||||||||
Pemex-Petrochemicals | |||||||||||||||||||||||||
Modernization and Enlargement of the Aromatics Train 1 at Cangrejera petrochemical complex | — | — | — | — | 217 | 268 | |||||||||||||||||||
Styrene plant at Cangrejera petrochemical complex | — | — | — | — | — | 291 | |||||||||||||||||||
Ethylene plant at Cangrejera petrochemical complex | — | — | — | — | — | 192 | |||||||||||||||||||
Total | — | — | — | — | 217 | 752 | |||||||||||||||||||
Total PIDIREGAS | 94,674 | 110,620 | 105,552 | 130,267 | 152,538 | 183,724 | |||||||||||||||||||
Maintenance by Pemex-Exploration and Production included in PIDIREGAS Expenditures(12) | 21,749 | 19,802 | 18,942 | 24,209 | 28,227 | 47,735 | |||||||||||||||||||
Total PIDIREGAS Capital Expenditures | Ps. | 72,925 | Ps. | 90,818 | Ps. | 86,610 | Ps. | 106,058 | Ps. | 124,311 | Ps. | 135,989 | |||||||||||||
17
(1) | Amounts based on cash basis method of accounting. | |
(2) | Includes capitalized interest during construction period. | |
(3) | Amended budget. | |
(4) | The Strategic Gas Program includes several different natural gas projects expected to increase domestic supply of natural gas, thereby minimizing imports. See “—Business Overview—Exploration and Production—Investments and Production by Project—Strategic Gas Program.” | |
(5) | The Agua Fría-Coapechaca-Tajín and the Amatitlán-Profeta-Tzapotempa-Vinazco projects were merged into the new Aceite Terciario del Golfo Project in January 2007. | |
(6) | The Pol and the Integral Batab projects were merged into the Chuc project in January 2007. | |
(7) | The Integral Abkatún, the Integral Kanaab and the Taratunich projects were merged into the Caan project in January 2007. | |
(8) | This project was implemented in 2008. | |
(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. |
18
Year ended December 31,(1)(2) | ||||||||||||||||
2008 | 2009 | 2010 | 2011 | |||||||||||||
(millions of constant 2008 pesos) | ||||||||||||||||
Pemex-Exploration and Production | ||||||||||||||||
Cantarell | Ps. | 48,350 | Ps. | 27,407 | Ps. | 20,887 | Ps. | 21,458 | ||||||||
Strategic Gas Program | 27,897 | 31,600 | 30,707 | 30,680 | ||||||||||||
Ku-Maloob-Zaap | 22,484 | 12,856 | 8,390 | 5,092 | ||||||||||||
Burgos | 16,512 | 19,259 | 18,903 | 19,967 | ||||||||||||
Aceite Terciario del Golfo | 15,988 | 26,603 | 26,836 | 26,339 | ||||||||||||
Antonio J. Bermúdez | 9,628 | 8,478 | 8,520 | 7,131 | ||||||||||||
Jujo-Tecominoacán | 5,035 | 3,437 | 2,363 | 2,395 | ||||||||||||
Bellota-Chinchorro | 3,758 | 2,685 | 3,374 | 1,581 | ||||||||||||
Chuc | 3,442 | 1,583 | 2,909 | 3,306 | ||||||||||||
Delta del Grijalva | 2,943 | 2,841 | 1,918 | 1,622 | ||||||||||||
Caan | 2,741 | 2,422 | 1,610 | 1,033 | ||||||||||||
Ek-Balam | 2,596 | 630 | 924 | 258 | ||||||||||||
Arenque | 1,970 | 5,597 | 3,528 | 1,495 | ||||||||||||
Integral Yaxche | 1,809 | 206 | 250 | 1,364 | ||||||||||||
El Golpe-Puerto Ceiba | 1,774 | 1,994 | 2,096 | 1,584 | ||||||||||||
Integral Poza Rica | 1,595 | 2,447 | 1,857 | 547 | ||||||||||||
Cactus-Sitio Grande | 1,110 | 1,049 | 1,375 | 225 | ||||||||||||
Och-Uech-Kax | 923 | 948 | 219 | 217 | ||||||||||||
Cárdenas | 591 | 431 | 332 | 252 | ||||||||||||
Ayín-Alux | 559 | 167 | 1,596 | 1,055 | ||||||||||||
Carmito-Artesa | 429 | 760 | 257 | 234 | ||||||||||||
Lakach | 419 | 2,551 | 8,318 | 3,540 | ||||||||||||
Total | 172,553 | 155,951 | 147,171 | 131,375 | ||||||||||||
Pemex-Refining | ||||||||||||||||
Minatitlán | 6,351 | — | — | — | ||||||||||||
Salina Cruz | — | 1,770 | 6,938 | 8,081 | ||||||||||||
Fuel Quality Investments | 2,602 | 6,560 | 18,880 | — | ||||||||||||
Residual Conversion from Tula Refinery | — | — | 3,831 | 1,280 | ||||||||||||
Residual Conversion from Salamanca Refinery | — | 5,254 | 2,143 | 3,407 | ||||||||||||
Total | 8,953 | 13,584 | 31,792 | 12,768 | ||||||||||||
Pemex-Gas and Basic Petrochemicals | ||||||||||||||||
Modular Cryogenic Plants in Reynosa | 1,466 | 92 | — | — | ||||||||||||
Total | 1,466 | 92 | — | — | ||||||||||||
Pemex-Petrochemicals | ||||||||||||||||
Modernization and Enlargement of the Aromatics Train 1 at Cangrejera petrochemical complex | 268 | 718 | 2,011 | 137 | ||||||||||||
Styrene plant at Cangrejera petrochemical complex | 291 | 690 | 222 | — | ||||||||||||
Ethylene plant at Cangrejera petrochemical complex | 192 | 223 | 782 | 1,268 | ||||||||||||
Total | 752 | 1,631 | 3,015 | 1,405 | ||||||||||||
Total PIDIREGAS Expenditures Budget | 183,724 | 171,259 | 181,979 | 145,548 | ||||||||||||
Maintenance by Pemex-Exploration and Production included in PIDIREGAS Expenditures Budget(3) | 47,735 | 35,308 | 33,348 | 29,807 | ||||||||||||
Total PIDIREGAS Capital Expenditures Budget | Ps. | 135,989 | Ps. | 135,951 | Ps. | 148,631 | Ps. | 115,741 | ||||||||
(1) | Amounts based on cash basis method of accounting. | |
(2) | Includes capitalized interest during the construction period. | |
(3) | Maintenance expenditures are not capitalized in accordance with Mexican FRS. |
19
Year ended December 31, | ||||||||||||||||||||||||||||
Budget | Budget | |||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2008(2)(3) | 2009(4) | ||||||||||||||||||||||
(in millions of nominal pesos) | ||||||||||||||||||||||||||||
Pemex-Exploration and Production(5) | Ps. | 3,305 | Ps. | 957 | Ps. | 7,566 | Ps. | 4,631 | Ps. | 2,021 | Ps. | 3,904 | Ps. | 524 | ||||||||||||||
Pemex-Refining | 5,744 | 4,647 | 6,542 | 7,369 | 7,124 | 12,585 | 15,826 | |||||||||||||||||||||
Pemex-Gas and Basic Petrochemicals | 2,148 | 1,961 | 1,936 | 2,845 | 2,308 | 5,145 | 4,873 | |||||||||||||||||||||
Pemex-Petrochemicals | 1,627 | 1,598 | 1,530 | 1,426 | 922 | 3,057 | 3,863 | |||||||||||||||||||||
Petróleos Mexicanos | 549 | 343 | 388 | 349 | 227 | 1,100 | 981 | |||||||||||||||||||||
Total Non-PIDIREGAS Capital Expenditures | Ps. | 13,373 | Ps. | 9,506 | Ps. | 17,962 | Ps. | 16,619 | Ps. | 12,602 | Ps. | 25,791 | Ps. | 26,067 | ||||||||||||||
(1) | There are no capital expenditures at the subsidiary company level. | |
(2) | Amended capital budget for 2008, which includes resources provided by Article 19 of the Federal Law of Budget and Fiscal Accountability. | |
(3) | The 2008 non-PIDIREGAS budget is subject to revision if our revenues increase. | |
(4) | Subject to approval by the Mexican Congress during the 2009 budgetary process. | |
(5) | Maintenance expenditures are not capitalized in accordance with Mexican FRS and, consequently, have been excluded from the Non-PIDIREGAS capital expenditures. |
20
21
22
23
Year Ended December 31, | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
Wells drilled | 653 | 733 | 759 | 672 | 615 | |||||||||||||||
Exploratory wells drilled | 96 | 105 | 73 | 58 | 49 | |||||||||||||||
Development wells drilled | 557 | 628 | 686 | 614 | 566 | |||||||||||||||
Wells completed | 593 | 727 | 742 | 656 | 659 | |||||||||||||||
Exploratory wells | 88 | 103 | 74 | 69 | 49 | |||||||||||||||
Exploratory productive wells(1) | 53 | 42 | 39 | 32 | 24 | |||||||||||||||
Success rate % | 60 | 41 | 53 | 46 | 49 | |||||||||||||||
Development wells | 505 | 624 | 668 | 587 | 610 | |||||||||||||||
Development productive wells | 455 | 581 | 612 | 541 | 569 | |||||||||||||||
Success rate %(2) | 90 | 93 | 92 | 92 | 94 | |||||||||||||||
Producing wells (annual averages)(3) | 4,941 | 5,286 | 5,682 | 6,080 | 6,280 | |||||||||||||||
Marine region | 369 | 380 | 388 | 411 | 434 | |||||||||||||||
Southern region | 979 | 935 | 959 | 958 | 926 | |||||||||||||||
Northern region | 3,593 | 3,972 | 4,335 | 4,711 | 4,920 | |||||||||||||||
Producing wells (at year end) | 4,870 | 5,217 | 5,671 | 5,998 | 5,941 | |||||||||||||||
Producing fields | 340 | 355 | 357 | 364 | 352 | |||||||||||||||
Marine region | 23 | 25 | 29 | 30 | 30 | |||||||||||||||
Southern region | 102 | 97 | 84 | 88 | 87 | |||||||||||||||
Northern region | 215 | 233 | 244 | 246 | 235 | |||||||||||||||
Drilling Rigs | 101 | 132 | 116 | 103 | 116 | |||||||||||||||
Kilometers drilled | 1,763 | 2,106 | 2,004 | 1,858 | 1,798 | |||||||||||||||
Average depth by well (meters) | 2,904 | 2,692 | 2,828 | 2,771 | 2,744 | |||||||||||||||
Discovered fields(4) | 33 | 24 | 16 | 13 | 14 | |||||||||||||||
Crude oil | 11 | 8 | 3 | 2 | 4 | |||||||||||||||
Natural gas | 22 | 16 | 13 | 11 | 10 | |||||||||||||||
Crude oil and natural gas output by well (barrels per day) | 880 | 833 | 774 | 729 | 699 |
(1) | Excludes non-commercial productive wells. | |
(2) | Excludes injector wells. | |
(3) | In May 2008, the monthly average of total producing wells was 6,427. | |
(4) | Includes only fields with proved reserves. |
24
• | experience in the area; | |
• | stage of development; | |
• | quality and completeness of basic data; and | |
• | production and pressure histories. |
25
(including natural gas liquids)(1)
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(in millions of barrels) | ||||||||||||||||||||
Proved developed and undeveloped reserves | ||||||||||||||||||||
At January 1 | 17,196 | 16,041 | 14,803 | 13,671 | 12,849 | |||||||||||||||
Revisions(2) | 120 | (109 | ) | 165 | 425 | 455 | ||||||||||||||
Extensions and discoveries | 84 | 245 | 57 | 86 | 150 | |||||||||||||||
Production | (1,359 | ) | (1,374 | ) | (1,354 | ) | (1,332 | ) | (1,268 | ) | ||||||||||
At December 31 | 16,041 | 14,803 | 13,671 | 12,849 | 12,187 | |||||||||||||||
Proved developed reserves at December 31 | 10,473 | 9,745 | 9,617 | 8,978 | 8,436 |
(1) | Crude oil and condensate reserves include the fraction of liquefiable hydrocarbons recoverable in natural gas processing plants. | |
(2) | Revisions include positive and negative changes due to new data from well drilling and revisions made when actual reservoir performance differs from expected performance. |
26
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(in billions of cubic feet) | ||||||||||||||||||||
Proved developed and undeveloped reserves | ||||||||||||||||||||
At January 1 | 14,985 | 14,850 | 14,807 | 14,557 | 13,856 | |||||||||||||||
Revisions(2) | 695 | 547 | 640 | 280 | 879 | |||||||||||||||
Extensions and discoveries | 354 | 641 | 415 | 505 | 171 | |||||||||||||||
Production(3) | (1,184 | ) | (1,231 | ) | (1,305 | ) | (1,487 | ) | (1,744 | ) | ||||||||||
At December 31 | 14,850 | 14,807 | 14,557 | 13,856 | 13,162 | |||||||||||||||
Proved developed reserves at December 31 | 8,094 | 8,325 | 8,888 | 8,688 | 8,163 |
(1) | To convert dry gas to barrels of oil equivalent, a factor of 5.201 thousand cubic feet of dry gas per barrel of oil is used. | |
(2) | Revisions include positive and negative changes due to new data from well drilling and revisions made when actual reservoir performance differs from expected performance. | |
(3) | 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. |
27
Proved | Developed | Undeveloped | Producing | Undeveloped | ||||||||||||||||
Field | Reserves | Reserves | Reserves | Wells | Locations(2) | |||||||||||||||
(in millions of barrels of crude oil equivalent)(1) | ||||||||||||||||||||
Akal | 3,699.3 | 3,338.9 | 360.4 | 168 | 8 | |||||||||||||||
Ku-Maloob-Zaap | 2,732.7 | 1,778.9 | 953.9 | 105 | 74 | |||||||||||||||
Jujo-Tecominoacán | 931.6 | 531.4 | 400.2 | 54 | 18 | |||||||||||||||
Samaria | 650.4 | 469.1 | 181.4 | 52 | 21 | |||||||||||||||
Iride | 627.4 | 388.7 | 238.7 | 39 | 2 | |||||||||||||||
Aceite Terciario del Golfo (formerly Chicontepec) | 625.9 | 22.7 | 603.2 | 590 | 1,763 | |||||||||||||||
Sihil | 284.6 | 28.5 | 256.1 | 4 | 15 | |||||||||||||||
May | 273.9 | 114.2 | 159.8 | 7 | 16 | |||||||||||||||
Cunduacán | 258.2 | 157.0 | 101.2 | 17 | 1 | |||||||||||||||
Oxiacaque | 230.7 | 111.1 | 119.7 | 8 | 7 | |||||||||||||||
Ixtal | 162.1 | 89.3 | 72.9 | 4 | 5 | |||||||||||||||
Caan | 124.9 | 124.9 | 0.0 | 19 | 0 | |||||||||||||||
Bolontikú | 98.4 | 71.2 | 27.1 | 7 | 6 | |||||||||||||||
Cactus | 96.3 | 39.9 | 56.3 | 19 | 6 | |||||||||||||||
Sinán | 93.8 | 82.2 | 11.7 | 12 | 3 | |||||||||||||||
Chiapas-Copanó | 93.1 | 93.1 | 0.0 | 10 | 0 | |||||||||||||||
Chuc | 90.9 | 87.7 | 3.2 | 17 | 3 | |||||||||||||||
Cárdenas | 88.8 | 74.7 | 14.1 | 11 | 5 | |||||||||||||||
Balam | 86.8 | 86.8 | 0.0 | 4 | 0 | |||||||||||||||
Ek | 85.1 | 49.7 | 35.4 | 7 | 8 | |||||||||||||||
Poza Rica | 84.1 | 74.3 | 9.8 | 198 | 12 | |||||||||||||||
Puerto Ceiba | 76.1 | 73.9 | 2.2 | 17 | 3 | |||||||||||||||
Bellota | 74.8 | 74.8 | 0.0 | 10 | 0 | |||||||||||||||
Sen | 68.4 | 44.0 | 24.4 | 12 | 5 | |||||||||||||||
Mora | 67.6 | 54.6 | 13.0 | 6 | 4 | |||||||||||||||
Ogarrio | 63.5 | 51.8 | 11.6 | 41 | 10 | |||||||||||||||
Lizamba | 61.7 | 61.7 | 0.0 | 37 | 0 | |||||||||||||||
Papán | 51.4 | 46.3 | 5.1 | 9 | 1 | |||||||||||||||
Lum | 49.4 | 24.2 | 25.2 | 1 | 3 | |||||||||||||||
Paredón | 46.9 | 46.9 | 0.0 | 6 | 0 | |||||||||||||||
Ayín | 45.8 | 0.0 | 45.8 | 0 | 3 | |||||||||||||||
San Ramón | 42.4 | 25.1 | 17.2 | 28 | 17 | |||||||||||||||
Caparroso-Pijije-Escuintle | 39.8 | 30.7 | 9.0 | 13 | 2 | |||||||||||||||
Abkatún | 38.9 | 38.9 | 0.0 | 11 | 0 | |||||||||||||||
Yaxché | 37.8 | 13.0 | 24.8 | 1 | 6 | |||||||||||||||
Alux | 37.1 | 0.0 | 37.1 | 0 | 2 | |||||||||||||||
Onel | 34.0 | 0.0 | 34.0 | 0 | 4 | |||||||||||||||
Platanal | 33.7 | 10.5 | 23.2 | 2 | 2 | |||||||||||||||
Cuitláhuac | 33.2 | 24.2 | 9.0 | 219 | 51 | |||||||||||||||
Narváez | 31.8 | 25.3 | 6.4 | 9 | 1 | |||||||||||||||
Tizón | 29.8 | 16.9 | 12.9 | 4 | 5 | |||||||||||||||
Magallanes-Tucán-Pajonal | 29.6 | 24.0 | 5.6 | 34 | 7 | |||||||||||||||
Culebra | 29.1 | 21.9 | 7.2 | 446 | 50 | |||||||||||||||
Rodador | 28.8 | 25.3 | 3.5 | 16 | 2 | |||||||||||||||
Ché | 28.3 | 0.0 | 28.3 | 0 | 3 | |||||||||||||||
Chinchorro | 26.4 | 22.5 | 3.8 | 5 | 1 | |||||||||||||||
Homol | 26.2 | 8.4 | 17.8 | 1 | 2 | |||||||||||||||
Cinco Presidentes | 24.6 | 14.3 | 10.3 | 27 | 13 | |||||||||||||||
Arcabuz | 22.1 | 16.9 | 5.2 | 220 | 31 | |||||||||||||||
Cráter | 19.5 | 4.7 | 14.8 | 1 | 3 | |||||||||||||||
Fundador | 12.8 | 12.8 | 0.0 | 22 | 0 | |||||||||||||||
Arcos | 12.3 | 12.3 | 0.0 | 138 | 0 | |||||||||||||||
Pol | 11.6 | 11.6 | 0.0 | 12 | 0 | |||||||||||||||
Velero | 10.9 | 9.8 | 1.1 | 136 | 11 | |||||||||||||||
Total | 12,665.2 | 8,661.7 | 4,003.6 | 2,836 | 2,215 | |||||||||||||||
Mexico’s proved reserves | 14,717.2 | 10,005.3 | 4,711.9 | |||||||||||||||||
Percentage | 86% | 87% | 85% |
(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. |
28
Average Lifting Costs | ||||||||
Year Ended December 31, | ||||||||
2005 | 2006 | 2007 | ||||||
(U.S. dollars per barrel) | ||||||||
U.S. $4.24 | U.S. $ | 4.13 | U.S. $ | 4.72 |
• | Altamira, a heavy crude oil; | |
• | Maya, a heavy crude oil; |
29
• | Isthmus, a light crude oil; and | |
• | Olmeca, a very light crude oil. |
2007 | ||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2006 | |||||||||||||||||||
(in thousands of barrels per day) | (%) | |||||||||||||||||||||||
Marine region | ||||||||||||||||||||||||
Heavy crude oil | 2,380.9 | 2,412.3 | 2,330.8 | 2,173.6 | 1,981.7 | (8.8 | ) | |||||||||||||||||
Light crude oil | 433.0 | 416.7 | 422.5 | 506.2 | 547.9 | 8.2 | ||||||||||||||||||
Total | 2,813.9 | 2,829.0 | 2,753.3 | 2,679.8 | 2,529.6 | (5.6 | ) | |||||||||||||||||
Southern region | ||||||||||||||||||||||||
Heavy crude oil | 6.4 | 7.1 | 20.8 | 14.2 | 10.7 | (24.6 | ) | |||||||||||||||||
Light crude oil | 476.9 | 465.6 | 475.7 | 477.1 | 454.5 | (4.7 | ) | |||||||||||||||||
Total | 483.3 | 472.7 | 496.6 | 491.3 | 465.2 | (5.3 | ) | |||||||||||||||||
Northern region | ||||||||||||||||||||||||
Heavy crude oil | 38.0 | 38.6 | 35.4 | 55.9 | 53.0 | (5.2 | ) | |||||||||||||||||
Light crude oil | 35.6 | 42.6 | 48.1 | 28.6 | 33.9 | 18.5 | ||||||||||||||||||
Total | 73.6 | 81.2 | 83.5 | 84.5 | 86.9 | 2.8 | ||||||||||||||||||
Total heavy crude oil | 2,425.4 | 2,458.0 | 2,387.0 | 2,243.8 | 2,045.4 | (8.8 | ) | |||||||||||||||||
Total light crude oil | 945.5 | 924.9 | 946.4 | 1,011.8 | 1,036.3 | 2.4 | ||||||||||||||||||
Total crude oil | 3,370.9 | 3,382.9 | 3,333.3 | 3,255.6 | 3,081.7 | (5.3 | ) | |||||||||||||||||
30
2007 | ||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2006 | |||||||||||||||||||
(in thousands of barrels per day) | (%) | |||||||||||||||||||||||
Northern region | ||||||||||||||||||||||||
Burgos | — | — | — | — | — | — | ||||||||||||||||||
Poza Rica-Altamira | 72.1 | 79.5 | 81.6 | 83.0 | 85.1 | 2.5 | ||||||||||||||||||
Veracruz | 1.5 | 1.7 | 1.9 | 1.5 | 1.8 | 20.0 | ||||||||||||||||||
Total | 73.6 | 81.2 | 83.5 | 84.5 | 86.9 | 2.8 | ||||||||||||||||||
Southern region | ||||||||||||||||||||||||
Cinco Presidentes | 37.3 | 37.7 | 38.8 | 39.3 | 44.6 | 13.5 | ||||||||||||||||||
Bellota-Jujo | 195.4 | 212.3 | 224.0 | 219.1 | 190.0 | (13.3 | ) | |||||||||||||||||
Macuspana | 2.5 | 4.9 | 5.0 | 6.6 | 10.4 | 57.6 | ||||||||||||||||||
Muspac | 42.2 | 36.1 | 33.3 | 33.6 | 33.6 | 0 | ||||||||||||||||||
Samaria-Luna | 205.9 | 181.6 | 195.5 | 192.7 | 186.7 | (3.1 | ) | |||||||||||||||||
Total | 483.3 | 472.7 | 496.6 | 491.3 | 465.2 | (5.3 | ) | |||||||||||||||||
Marine region | ||||||||||||||||||||||||
Cantarell | 2,122.8 | 2,136.4 | 2,035.3 | 1,800.9 | 1,496.5 | (16.9 | ) | |||||||||||||||||
Ku-Maloob-Zaap | 293.6 | 304.4 | 321.7 | 403.8 | 527.2 | 30.6 | ||||||||||||||||||
Abkatún-Pol-Chuc | 359.0 | 321.8 | 299.8 | 332.2 | 312.3 | (6.0 | ) | |||||||||||||||||
Litoral de Tabasco | 38.6 | 66.4 | 96.5 | 142.9 | 193.6 | 35.5 | ||||||||||||||||||
Total | 2,813.9 | 2,829.0 | 2,753.3 | 2,679.8 | 2,529.6 | (5.6 | ) | |||||||||||||||||
Total crude oil | 3,370.9 | 3,382.9 | 3,333.3 | 3,255.6 | 3,081.7 | (5.3 | ) | |||||||||||||||||
31
Year Ended December 31, | 2007 | |||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2006 | |||||||||||||||||||
(in million cubic feet per day) | (%) | |||||||||||||||||||||||
Northern region | ||||||||||||||||||||||||
Burgos | 1,030.7 | 1,094.5 | 1,217.3 | 1,330.3 | 1,411.8 | 6.1 | ||||||||||||||||||
Veracruz | 205.2 | 313.8 | 499.2 | 723.3 | 921.7 | 27.4 | ||||||||||||||||||
Poza Rica-Altamira | 110.8 | 119.5 | 118.8 | 174.1 | 222.5 | 27.8 | ||||||||||||||||||
1,346.7 | 1,527.8 | 1,835.2 | 2,227.6 | 2,556.0 | 14.7 | |||||||||||||||||||
Southern region | ||||||||||||||||||||||||
Cinco Presidentes | 58.7 | 67.8 | 62.8 | 56.7 | 61.4 | 8.3 | ||||||||||||||||||
Bellota-Jujo | 276.6 | 276.6 | 281.9 | 271.4 | 239.6 | (11.7 | ) | |||||||||||||||||
Macuspana | 147.5 | 179.6 | 167.5 | 192.9 | 223.1 | 15.7 | ||||||||||||||||||
Muspac | 686.0 | 558.1 | 449.2 | 368.5 | 310.9 | (15.6 | ) | |||||||||||||||||
Samaria-Luna | 461.2 | 412.9 | 438.9 | 462.6 | 517.6 | 11.9 | ||||||||||||||||||
1,630.0 | 1,495.1 | 1,400.3 | 1,352.1 | 1,352.8 | 0.1 | |||||||||||||||||||
Marine region | ||||||||||||||||||||||||
Cantarell | 786.1 | 789.1 | 760.7 | 717.7 | 944.9 | 31.7 | ||||||||||||||||||
Ku-Maloob-Zaap | 154.4 | 158.4 | 167.1 | 202.5 | 212.2 | 4.8 | ||||||||||||||||||
Abkatún-Pol-Chuc | 494.3 | 456.1 | 431.8 | 512.5 | 544.2 | 6.2 | ||||||||||||||||||
Litoral de Tabasco | 87.0 | 146.5 | 222.9 | 343.6 | 448.4 | 30.5 | ||||||||||||||||||
1,521.8 | 1,550.0 | 1,582.5 | 1,776.4 | 2,149.7 | 21.0 | |||||||||||||||||||
Total natural gas | 4,498.4 | 4,572.9 | 4,818.0 | 5,356.1 | 6,058.5 | 13.1 | ||||||||||||||||||
32
33
Year ended December 31,(1) | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(millions of nominal pesos) | ||||||||||||||||||||
Exploration | Ps. | 16,411 | Ps. | 21,664 | Ps. | 14,653 | Ps. | 12,960 | Ps. | 13,624 | ||||||||||
Development | 44,580 | 69,129 | 75,794 | 89,391 | 101,939 | |||||||||||||||
Total | Ps. | 60,991 | Ps. | 90,793 | Ps. | 90,447 | Ps. | 102,351 | Ps. | 115,563 | ||||||||||
Year ended December 31,(1) | ||||||||||||||||
2008(2) | 2009 | 2010 | 2011 | |||||||||||||
(millions of nominal pesos) | ||||||||||||||||
Exploration(3) | Ps. | 22,757 | Ps. | 23,190 | Ps. | 21,903 | Ps. | 19,577 | ||||||||
Development(3) | 105,965 | 97,977 | 92,539 | 82,713 | ||||||||||||
Total | Ps. | 128,722 | Ps. | 121,167 | Ps. | 114,442 | Ps. | 102,290 | ||||||||
34
35
• | Veracruz Project. The Veracruz project is the second most important non-associated gas project in Mexico. It is located on the western margin of the Gulf of Mexico, in central Veracruz. During 2007, it produced an average of 0.9 billion cubic feet of natural gas per day. As of December 31, 2007, cumulative production totaled 2.0 trillion cubic feet of natural gas. Proved hydrocarbon reserves totaled 1.0 trillion cubic feet of natural gas and 214.6 million barrels of oil equivalent. In addition, developed reserves totaled 1.0 trillion cubic feet of natural gas, and 200 million barrels of oil equivalent. Two of the most important fields in the Veracruz project are Lizamba and Papán. | |
• | Lizamba. This field covers an area of 40 square kilometers. During 2007, it produced an average of 242.8 million cubic feet of natural gas per day. As of December 31, 2007, 51 wells had been drilled, 37 of which were operating. Proved reserves were 320.9 billion cubic feet of natural gas and 61.7 million barrels of oil equivalent, all of which were developed. | |
• | Papán. This field was one of the last discoveries in the Veracruz project in 2005. The field covers an area of 29.4 square kilometers. Production began on June 15, 2007, and reached an average of 57.2 million cubic feet of natural gas per day. As of December 31, 2007, 18 wells had been drilled, nine of which were operating. The other nine wells were completed in April 2008. Their respective gas pipelines were completed in June 2008 and are expected to be operational by July 2008. As of December 31, 2007, proved reserves totaled 267.4 billion cubic feet of natural gas and 51.4 million barrels of oil equivalent, of which 240.9 billion cubic feet of natural gas and 46.3 million barrels of oil equivalent were developed. | |
• | Crudo Ligero Marino Project. This project is located on the continental shelf of the Gulf of Mexico off the coast of the states of Tabasco and Campeche, 76 kilometers northeast from the Dos Bocas Marine Terminal in Paraiso, Tabasco. The project is composed of the Bolontikú, Citam, Hayabil, Ichalkil, Kab, Kix, May, Men, Misón, Nak, Sinán, and Yum fields, all in the Southwestern Marine region. As of December 31, 2007, 59 wells had been drilled, 26 of which were producing. Approximately half of the fields in this project are not yet developed. During 2007, average daily production totaled 156.7 thousand barrels of crude oil and 382.3 million cubic feet of natural gas. As of December 31, 2007, cumulative production totaled 131.3 million barrels of crude oil and 327.6 billion cubic feet of natural gas. Proved hydrocarbon reserves totaled 282.8 million barrels of crude oil and 1.0 trillion cubic feet of natural gas. Total proved reserves were 535.0 million barrels of oil equivalent, of which 272.5 million barrels were developed. |
36
• | Arcabuz-Culebra. This field covers an area of 380 square kilometers. As of December 31, 2007, there were a total of 831 wells drilled in this field, 666 of which were producing. During 2007, the field produced an average of 257.1 million cubic feet of natural gas per day. As of December 31, 2007, cumulative production was 1.5 trillion cubic feet of natural gas. Proved gas reserves totaled 256.8 billion cubic feet of natural gas, of which 194.0 billion were developed. | |
• | Cuitláhuac. This field covers an area of 210 square kilometers. As of December 31, 2007, there were a total of 349 wells drilled in this area, 219 of which were producing. During 2007, the field produced an average of 97.0 million cubic feet of natural gas per day. As of December 31, 2007, cumulative production was 515.1 billion cubic feet of natural gas. Proved hydrocarbon reserves totaled 155.3 billion cubic feet of natural gas, of which 113.1 billion were developed. | |
• | Velero. This field covers an area of 58 square kilometers. As of December 31, 2007, 175 wells had been drilled, 136 of which were operating. The average daily production of the field was 113.1 million cubic feet of natural gas. Cumulative production was 156.2 billion cubic feet of natural gas. Proved reserves were 58.7 billion cubic feet of natural gas, of which 51.0 billion cubic feet were developed. | |
• | Arcos. This field covers an area of 45 square kilometers. As of December 31, 2007, there were a total of 187 wells drilled in this area, of which 138 were producing. During 2007, the field produced an average of 64.2 million cubic feet of natural gas per day. As of December 31, 2007, cumulative production was 574.3 billion cubic feet of natural gas. As of December 31, 2007, proved reserves totaled 64.0 billion cubic feet of natural gas, all of which were developed. | |
• | Fundador. This field covers an area of 4.1 square kilometers. As of December 31, 2007, 22 wells had been drilled, and all of them were operating. During 2007, the average daily production was 86.4 million cubic feet per day of natural gas. During 2007, cumulative production was 91.4 billion cubic feet of natural gas. As of December 31, 2007, proved reserves were 59.9 billion cubic feet of natural gas, and all were developed. |
37
38
At December 31, | 2007 | |||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2006 | |||||||||||||||||||
(in thousands of barrels per day) | (%) | |||||||||||||||||||||||
Production | 3,370.9 | 3,382.9 | 3,333.3 | 3,255.6 | 3,081.7 | (5.3 | ) | |||||||||||||||||
Distribution | ||||||||||||||||||||||||
Refineries | 1,246.4 | 1,257.9 | 1,274.9 | 1,242.1 | 1,230.9 | (0.9 | ) | |||||||||||||||||
Products under processing agreements(1) | 112.5 | 97.4 | 81.4 | 80.2 | 0 | (100.0 | ) | |||||||||||||||||
Petrochemicals | 150.4 | 133.8 | 131.0 | 122.3 | 125.5 | 2.6 | ||||||||||||||||||
Export terminals | 1,848.3 | 1,873.6 | 1,832.6 | 1,789.1 | 1,701.3 | (4.9 | ) | |||||||||||||||||
Total | 3,357.6 | 3,362.7 | 3,319.9 | 3,233.7 | 3,057.8 | (5.4 | ) | |||||||||||||||||
Stock changes, statistical differences(2) | 13.3 | 20.3 | 13.4 | 21.8 | 24.0 | 10.1 |
39
40
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. | U.S. $ | 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 | |||||
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 | U.S. $ | 7,232 | ||||||
41
• | 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. |
42
At December 31, | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(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 | 754.0 | 754.0 | |||||||||||||||
Cracking | 395.5 | 374.5 | 374.5 | 380.5 | 380.5 | |||||||||||||||
Visbreaking | 141.0 | 141.0 | 141.0 | 91.0 | 91.0 | |||||||||||||||
Reforming | 301.3 | 301.3 | 301.3 | 279.3 | 279.3 | |||||||||||||||
Hydrotreatment | 987.1 | 987.1 | 987.1 | 926.1 | 926.1 | |||||||||||||||
Alkylation and isomerization | 143.9 | 143.9 | 143.9 | 152.5 | 152.5 | |||||||||||||||
Coking | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
43
Year Ended December 31, | 2007 | |||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2006 | |||||||||||||||||||
(in thousands of barrels per day) | (%) | |||||||||||||||||||||||
Refinery crude oil runs | 1,285.9 | 1,303.4 | 1,284.4 | 1,284.2 | 1,269.8 | (1.1 | ) | |||||||||||||||||
Refined products | ||||||||||||||||||||||||
Liquefied petroleum gas | 33.8 | 28.0 | 30.6 | 25.4 | 26.6 | 4.7 | ||||||||||||||||||
Gasoline | ||||||||||||||||||||||||
Nova (leaded)/Base | 10.5 | 3.9 | 4.8 | 7.5 | 4.5 | (40.0 | ) | |||||||||||||||||
Pemex Magna | 396.5 | 418.5 | 412.0 | 413.7 | 425.7 | 2.9 | ||||||||||||||||||
Pemex Premium | 37.6 | 43.8 | 38.2 | 35.0 | 26.1 | (25.4 | ) | |||||||||||||||||
Others | 0.6 | 0.4 | 0.1 | 0.1 | 0.1 | 0.0 | ||||||||||||||||||
Total | 445.2 | 466.7 | 455.1 | 456.2 | 456.4 | 0.0 | ||||||||||||||||||
Kerosenes | ||||||||||||||||||||||||
Jet fuel | 59.6 | 62.1 | 63.3 | 64.8 | 66.3 | 2.3 | ||||||||||||||||||
Total | 59.6 | 62.1 | 63.3 | 64.8 | 66.3 | 2.3 | ||||||||||||||||||
Diesel | ||||||||||||||||||||||||
Pemex Diesel | 290.8 | 319.6 | 312.3 | 318.3 | 326.2 | 2.5 | ||||||||||||||||||
Low sulphur diesel | 0.6 | — | — | — | — | — | ||||||||||||||||||
Others | 16.4 | 5.1 | 5.9 | 9.8 | 7.8 | (20.4 | ) | |||||||||||||||||
Total | 307.8 | 324.7 | 318.2 | 328.1 | 334.0 | 1.8 | ||||||||||||||||||
Fuel oil | 396.5 | 368.0 | 350.8 | 325.2 | 301.5 | (7.3 | ) | |||||||||||||||||
Other refined products | ||||||||||||||||||||||||
Asphalts | 25.6 | 27.2 | 29.3 | 32.3 | 31.9 | (1.2 | ) | |||||||||||||||||
Lubricants | 5.5 | 5.4 | 5.2 | 5.1 | 5.2 | 2.0 | ||||||||||||||||||
Paraffins | 0.9 | 1.0 | 1.1 | 1.0 | 1.1 | 10.0 | ||||||||||||||||||
Still gas | 51.3 | 49.9 | 51.9 | 56.7 | 55.2 | (2.6 | ) | |||||||||||||||||
Other refined products(1) | 16.7 | 28.2 | 32.8 | 34.8 | 34.2 | (1.7 | ) | |||||||||||||||||
Total | 100.1 | 111.7 | 120.2 | 129.9 | 127.6 | (1.8 | ) | |||||||||||||||||
Total refined products | 1,342.9 | 1,361.2 | 1,338.3 | 1,329.7 | 1,312.4 | (1.3 | ) | |||||||||||||||||
44
Year Ended December 31, | 2007 | |||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2006 | |||||||||||||||||||
(in millions of constant pesos at December 31, 2007)(2) | (%) | |||||||||||||||||||||||
Oil Products | ||||||||||||||||||||||||
Gasoline | ||||||||||||||||||||||||
Pemex Magna | Ps. | 96,783.6 | Ps. | 130,964.6 | Ps. | 162,803.3 | Ps. | 188,101.3 | Ps. | 209,006.5 | 11.1 | |||||||||||||
Pemex Premium | 21,979.5 | 30,781.5 | 36,554.3 | 41,929.7 | 38,331.9 | (8.6 | ) | |||||||||||||||||
Aviation fuels | 155.7 | 133.5 | 185.7 | 187.2 | 212.9 | 13.7 | ||||||||||||||||||
Others | 101.5 | 101.4 | 66.1 | 97.9 | 74.1 | (24.3 | ) | |||||||||||||||||
Total | 119,020.5 | 161,981.0 | 199,609.3 | 230,316.1 | 247,625.4 | 7.5 | ||||||||||||||||||
Kerosene | ||||||||||||||||||||||||
Jet fuel | 8,652.2 | 12,217.4 | 17,534.9 | 19,607.4 | 23,369.3 | 19.2 | ||||||||||||||||||
Other kerosene | 137.7 | 145.6 | 159.2 | 199.5 | 183.2 | (8.2 | ) | |||||||||||||||||
Total | 8,789.8 | 12,362.8 | 17,694.0 | 19,807.1 | 23,552.5 | 18.9 | ||||||||||||||||||
Diesel | ||||||||||||||||||||||||
Pemex Diesel | 43,732.3 | 57,651.1 | 72,351.9 | 78,894.3 | 84,752.0 | 7.4 | ||||||||||||||||||
Others | 9,776.0 | 10,930.1 | 12,655.7 | 12,801.3 | 12,168.2 | (4.9 | ) | |||||||||||||||||
Total | 53,508.4 | 68,581.2 | 85,007.6 | 91,695.6 | 96,920.1 | 5.7 | ||||||||||||||||||
Fuel oil | ||||||||||||||||||||||||
Total | 36,979.0 | 35,174.4 | 42,668.4 | 44,926.5 | 42,395.7 | (5.6 | ) | |||||||||||||||||
Other refined products | ||||||||||||||||||||||||
Asphalts | 2,757.8 | 3,188.2 | 3,820.1 | 5,976.0 | 6,107.4 | 2.2 | ||||||||||||||||||
Lubricants | 1,348.5 | 1,388.9 | 1,658.7 | 2,137.3 | 2,167.9 | 1.4 | ||||||||||||||||||
Paraffins | 143.3 | 161.4 | 217.4 | 233.7 | 247.7 | 6.0 | ||||||||||||||||||
Others(3) | 28.8 | 36.4 | 50.4 | 82.8 | 98.0 | 18.4 | ||||||||||||||||||
Total | 4,278.4 | 4,775.0 | 5,746.5 | 8,429.7 | 8,621.1 | 2.3 | ||||||||||||||||||
Total Oil Products | Ps. | 222,575.9 | Ps. | 282,874.6 | Ps. | 350,725.8 | Ps. | 395,175.0 | Ps. | 419,114.8 | 6.1 | |||||||||||||
Petrochemicals(4) | Ps. | 1,098.2 | Ps. | 1,882.8 | Ps. | 2,236.9 | Ps. | 2,540.6 | Ps. | 2,508.1 | (1.3 | ) |
(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, 2007, by applying the inflation factors, as measured by the NCPI, from the respective years through December 31, 2007. For the five years ended December 31, 2007, the inflation factor is the 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. |
45
46
Year Ended December 31, | 2007 | |||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2006 | |||||||||||||||||||
(in thousands of barrels per day, except where otherwise indicated) | (%) | |||||||||||||||||||||||
Oil Products | ||||||||||||||||||||||||
Gasoline | ||||||||||||||||||||||||
Pemex Magna | 500.2 | 525.5 | 559.6 | 601.8 | 658.9 | 9.5 | ||||||||||||||||||
Pemex Premium | 100.1 | 110.4 | 111.7 | 116.3 | 101.3 | (12.9 | ) | |||||||||||||||||
Aviation fuels | 0.4 | 0.4 | 0.5 | 0.5 | 0.5 | 0 | ||||||||||||||||||
Others | 0.4 | 0.4 | 0.3 | 0.2 | 0.2 | 0 | ||||||||||||||||||
Total | 601.2 | 636.7 | 672.1 | 718.9 | 760.9 | 5.8 | ||||||||||||||||||
Kerosenes | ||||||||||||||||||||||||
Jet fuel | 54.2 | 57.8 | 58.7 | 61.2 | 67.9 | 10.9 | ||||||||||||||||||
Other kerosenes | 0.7 | 0.7 | 0.8 | 1.0 | 0.9 | (10.0 | ) | |||||||||||||||||
Total | 54.9 | 58.5 | 59.5 | 62.2 | 68.8 | 10.6 | ||||||||||||||||||
Diesel | ||||||||||||||||||||||||
Pemex Diesel | 240.7 | 255.4 | 273.4 | 297.9 | 314.5 | 5.6 | ||||||||||||||||||
Others | 54.0 | 47.3 | 46.7 | 46.9 | 43.9 | (6.4 | ) | |||||||||||||||||
Total | 294.7 | 302.7 | 320.1 | 344.9 | 358.4 | 3.9 | ||||||||||||||||||
Fuel oil | ||||||||||||||||||||||||
Total | 354.6 | 332.5 | 340.6 | 263.7 | 256.9 | (2.6 | ) | |||||||||||||||||
Other oil products | ||||||||||||||||||||||||
Asphalts | 22.2 | 24.5 | 26.9 | 28.8 | 29.9 | 3.8 | ||||||||||||||||||
Lubricants | 5.7 | 5.7 | 5.7 | 5.5 | 5.7 | 3.6 | ||||||||||||||||||
Paraffins | 1.0 | 1.1 | 1.1 | 1.0 | 1.1 | 10.0 | ||||||||||||||||||
Others(1) | 22.8 | 28.4 | 31.2 | 31.4 | 33.1 | 5.4 | ||||||||||||||||||
Total | 51.7 | 59.7 | 64.8 | 66.7 | 69.8 | 4.6 | ||||||||||||||||||
Total oil products | 1,357.1 | 1,390.0 | 1,457.1 | 1,456.4 | 1,514.8 | 4.0 | ||||||||||||||||||
Petrochemicals(2) | 272.3 | 286.0 | 289.0 | 333.8 | 290.9 | (12.9 | ) |
(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. |
47
48
Contract Amount | ||||||||
(in millions of | ||||||||
Contractor(s) | Contract Date | U.S. dollars) | ||||||
Tradeco Infraestructura, S.A. de C.V and Pager de Tabasco, S.A. de C.V. | November 2003 | U.S.$ | 43.8 | |||||
ICA Fluor Daniel, S. de R.L. de C.V. | October 2004 | U.S. $ | 684.4 | |||||
Dragados Proyectos Industriales de México, S.A. de C.V. and Dragados Industrial, S.A. | October 2004 | U.S. $ | 534.1 | |||||
Mina-Trico, S. de R.L. de C.V. | January 2005 | U.S. $ | 317.0 | |||||
Proyectos Ebramex, S. de R.L. de C.V. | January 2005 | U.S. $ | 317.9 | |||||
Samsung Ingeniería Minatitlán, S.A. de C.V. and Samsung Engineering, Co. Ltd. | January 2005 | U.S. $ | 154.1 |
49
• | Cactus: This facility contains twenty-two plants that together produced 784 million cubic feet per day of dry gas (which is natural gas with a methane content of more than 90.5%), 18 thousand barrels per day of ethane, 35 thousand barrels per day of liquefied gas, 18 thousand barrels per day of naphtha and 262 thousand tons of sulphur in 2007. | |
• | Ciudad Pemex: This facility contains eight plants that together produced 710 million cubic feet per day of dry gas and 204 thousand tons of sulphur in 2007. | |
• | Cangrejera: This facility contains three plants that together produced 31 thousand barrels per day of ethane, 39 thousand barrels per day of liquefied gas and 12 thousand barrels per day of naphtha and 0.5 thousand tons of sulphur in 2007. | |
• | Morelos: This facility contains one plant that produced 31 thousand barrels per day of ethane, 42 thousand barrels per day of liquefied gas and 11 thousand barrels per day of naphtha in 2007. | |
• | Nuevo Pemex: This facility contains 13 plants that together produced 814 million cubic feet per day of dry gas, 24 thousand barrels per day of ethane, 58 thousand barrels per day of liquefied gas, 31 thousand barrels per day of naphtha and 170 thousand tons of sulphur in 2007. | |
• | Pajaritos: This facility contains one plant that produced 11 thousand barrels per day of ethane in 2007. | |
• | La Venta: This facility contains one plant that produced 119 million cubic feet per day of dry gas in 2007. | |
• | Matapionche: This facility contains five plants that together produced 60 million cubic feet per day of dry gas, 2 thousand barrels per day of liquefied gas, 1 thousand barrels per day of naphtha and 10 thousand tons of sulphur in 2007. |
• | Reynosa: This facility contains two plants that together produced 178 million cubic feet per day of dry gas, 0.4 thousand barrels per day of ethane, 3 thousand barrels per day of liquefied gas, 2 thousand barrels per day of naphtha and 1 thousand barrels per day of other products in 2007. |
50
• | Poza Rica: This facility contains four plants that together produced 90 million cubic feet per day of dry gas, 4 thousand barrels per day of ethane, 3 thousand barrels per day of liquefied gas, 1 thousand barrels per day of naphtha and 10 thousand tons of sulphur in 2007. | |
• | Arenque: This facility contains three plants that together produced 28 million cubic feet per day of dry gas, 1 thousand barrels per day of ethane plus liquids and 3 thousand tons of sulphur in 2007. | |
• | Burgos: This facility contains seven plants that together produced 763 million cubic feet per day of dry gas, 17 thousand barrels per day of liquefied gas and 10 thousand barrels per day of naphtha in 2007. |
Year Ended December 31, | 2007 | |||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2006 | |||||||||||||||||||
(in millions of cubic feet per day, | (%) | |||||||||||||||||||||||
except where otherwise indicated) | ||||||||||||||||||||||||
Processing | ||||||||||||||||||||||||
Wet gas | 3,853 | 3,963 | 3,879 | 4,153 | 4,288 | 3.3 | ||||||||||||||||||
Sour gas | 3,360 | 3,349 | 3,153 | 3,203 | 3,162 | (1.3 | ) | |||||||||||||||||
Sweet gas(2) | 492 | 614 | 726 | 950 | 1,125 | 18.4 | ||||||||||||||||||
Condensates(3) | 95 | 107 | 102 | 101 | 79 | (21.8 | ) | |||||||||||||||||
Gas to natural gas liquids extraction | 3,829 | 3,925 | 3,810 | 4,108 | 4,264 | 3.8 | ||||||||||||||||||
Wet gas | 3,689 | 3,803 | 3,712 | 3,987 | 4,134 | 3.7 | ||||||||||||||||||
Reprocessing streams(4) | 141 | 123 | 98 | 121 | 130 | 7.4 | ||||||||||||||||||
Production | ||||||||||||||||||||||||
Dry gas(5) | 3,029 | 3,144 | 3,147 | 3,445 | 3,546 | 2.9 | ||||||||||||||||||
Natural gas liquids(6)(7) | 428 | 451 | 436 | 436 | 405 | (7.1 | ) | |||||||||||||||||
Liquefied petroleum gas(6) | 212 | 225 | 215 | 215 | 199 | (7.4 | ) | |||||||||||||||||
Ethane(6) | 125 | 133 | 129 | 127 | 119 | (6.3 | ) | |||||||||||||||||
Naphtha(6)(8) | 86 | 90 | 88 | 92 | 85 | (7.6 | ) | |||||||||||||||||
Sulphur(9) | 757 | 759 | 692 | 711 | 659 | (7.3 | ) |
(1) | Excludes operations of Pemex-Exploration and Production. Pemex-Exploration and Production produced a total of 6,058 million cubic feet per day of natural gas in 2007. | |
(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. |
51
Year Ended December 31, | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(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) | 4,503 | 4,503 | 4,503 | 4,503 | 4,503 | |||||||||||||||
Natural gas liquids recovery plants | ||||||||||||||||||||
Cryogenics(3) | 4,592 | 4,992 | 4,992 | 5,392 | 5,392 | |||||||||||||||
Absorption(4) | 554 | 554 | 350 | 350 | 350 | |||||||||||||||
Total | 5,146 | 5,546 | 5,342 | 5,742 | 5,742 | |||||||||||||||
Natural gas liquids fractionating(1)(4) | 569 | 574 | 574 | 587 | 587 | |||||||||||||||
Processing of hydrosulphuric acid(5)(6) | 219 | 219 | 219 | 219 | 219 |
(1) | In thousands of barrels per day. | |
(2) | 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) | 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 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. | |
(4) | 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 barrels per day. In 2006, two liquids fractionating plants began operations at the Burgos complex, each with a capacity of seven thousand barrels per day. | |
(5) | 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. | |
(6) | In 2006, one sulphur recovery plant began operations at the Cangrejera complex, with a capacity of ten tons per day of sulphur production. |
52
Year Ended December 31, | 2007 | |||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2006 | |||||||||||||||||||
(in millions of constant pesos at December 31, 2007)(2) | (%) | |||||||||||||||||||||||
Natural gas | Ps. | 61,266.8 | Ps. | 77,196.4 | Ps. | 85,333.7 | Ps. | 78,187.2 | Ps. | 78,933.2 | 1.0 | |||||||||||||
Liquefied petroleum gas | 44,111.4 | 47,595.9 | 52,396.1 | 54,687.3 | 54,456.5 | (0.4 | ) | |||||||||||||||||
Petrochemicals | ||||||||||||||||||||||||
Hexane | 260.4 | 319.1 | 439.1 | 392.5 | 344.8 | (12.2 | ) | |||||||||||||||||
Dissolving agents | 50.3 | 69.6 | 120.8 | 113.9 | 81.6 | (28.4 | ) | |||||||||||||||||
Sulphur | 232.4 | 210.8 | 200.2 | 247.1 | 236.1 | (4.5 | ) | |||||||||||||||||
Carbon black | 328.4 | 413.9 | 687.2 | 850.6 | 1,038.5 | 22.1 | ||||||||||||||||||
Pentanes | 27.6 | 51.6 | 41.9 | 75.3 | 63.1 | (16.2 | ) | |||||||||||||||||
Heptane | 36.1 | 46.4 | 69.7 | 72.4 | 68.3 | (5.7 | ) | |||||||||||||||||
Butane | 65.6 | 77.7 | 95.3 | 104.1 | 141.1 | 35.5 | ||||||||||||||||||
Propane | 33.5 | 45.6 | 47.4 | 50.9 | 60.5 | 18.9 | ||||||||||||||||||
Isobutane | 0.4 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||
Others | 9.4 | 15.5 | 4.8 | 6.2 | 3.4 | (45.2 | ) | |||||||||||||||||
Total Petrochemicals | 1,044.0 | 1,250.1 | 1,706.5 | 1,913.2 | 2,037.4 | 6.5 | ||||||||||||||||||
Total | Ps. | 106,422.2 | Ps. | 126,042.3 | Ps. | 139,436.1 | Ps. | 134,787.7 | Ps. | 135,427.1 | 0.5 | |||||||||||||
(1) | Excludes value added tax. | |
(2) | Figures have been restated to constant pesos as of December 31, 2007, by applying the inflation factors from the respective years through December 31, 2007. For the five years ended December 31, 2007, the inflation factor is the inflation rate for each of these years. |
53
Ownership | ||||||
Subsidiary | Principal Activity | Interest (%) | ||||
Mex Gas International, Ltd.(2) | 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, 2007. | |
(2) | Mex Gas International, Ltd. is the only subsidiary of Pemex-Gas and Basic Petrochemicals that is a consolidated subsidiary company. See Note 3b. to our consolidated financial statements included herein. |
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 |
(1) | As of December 31, 2007. |
54
• | Customers could purchase natural gas swaps from us at a fixed price equal to a maximum of U.S. $4.50 per million British Thermal Units (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. |
55
Year ended December 31, | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(in thousands of tons) | ||||||||||||||||||||
Petrochemical Facility | ||||||||||||||||||||
Cosoleacaque | 4,975 | 4,975 | 4,975 | 4,975 | 4,975 | |||||||||||||||
Cangrejera | 3,205 | 3,255 | 3,280 | 3,280 | 3,280 | |||||||||||||||
Morelos | 2,263 | 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 | 288 | 288 | 288 | 288 | 288 | |||||||||||||||
Camargo | 333 | 333 | 333 | 333 | 333 | |||||||||||||||
Tula | 76 | 76 | 76 | 76 | 76 | |||||||||||||||
Total | 12,496 | 12,546 | 12,571 | 12,571 | 12,571 | |||||||||||||||
Source:Pemex BDI.
• | methane derivatives, such as ammonia and methanol; | |
• | ethane derivatives, such as ethylene, polyethylene, vinyl chloride monomer, ethylene oxide and glycols; | |
• | aromatics and their derivatives, such as paraxylene, styrene, benzene, toluene and xylenes; | |
• | propylene and its derivatives, such as acrylonitrile and propylene; and |
56
• | other products, such as oxygen, nitrogen, hexane, heptane, pyrolysis liquids, specialty petrochemical products, hydrochloric acid and muriatic acid. |
57
Year ended December 31, | 2007 | |||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2006 | |||||||||||||||||||
(in thousands of tons per year) | (%) | |||||||||||||||||||||||
Liquids | ||||||||||||||||||||||||
Hexanes | 70 | 66 | 66 | 53 | 56 | 5.7 | ||||||||||||||||||
Heptanes | 18 | 11 | 15 | 14 | 13 | (7.1 | ) | |||||||||||||||||
Total | 88 | 77 | 81 | 68 | 69 | 1.5 | ||||||||||||||||||
Other inputs | ||||||||||||||||||||||||
Oxygen | 399 | 418 | 433 | 447 | 410 | (8.3 | ) | |||||||||||||||||
Nitrogen | 106 | 112 | 118 | 117 | 106 | (9.4 | ) | |||||||||||||||||
Hydrogen | 167 | 162 | 184 | 167 | 161 | (3.6 | ) | |||||||||||||||||
Total | 672 | 692 | 735 | 731 | 677 | (7.4 | ) | |||||||||||||||||
Petrochemicals | ||||||||||||||||||||||||
Methane derivatives | 1,383 | 1,668 | 1,242 | 1,404 | 1,859 | 32.4 | ||||||||||||||||||
Ethane derivatives | 2,218 | 2,073 | 2,440 | 2,748 | 2,607 | (5.1 | ) | |||||||||||||||||
Aromatics and derivatives | 795 | 1,222 | 1,187 | 1,089 | 1,338 | 22.9 | ||||||||||||||||||
Propylene and derivatives | 125 | 116 | 104 | 24 | 47 | 95.8 | ||||||||||||||||||
Others | 723 | 327 | 321 | 338 | 708 | 109.5 | ||||||||||||||||||
Total | 5,244 | 5,406 | 5,294 | 5,603 | 6,559 | 17.1 | ||||||||||||||||||
Other products | ||||||||||||||||||||||||
Hydrochloric acid | 66 | 38 | 93 | 126 | 141 | 11.9 | ||||||||||||||||||
Muriatic acid | 14 | 11 | 16 | 44 | 50 | 13.6 | ||||||||||||||||||
Total | 81 | 49 | 109 | 170 | 191 | 12.4 | ||||||||||||||||||
Subtotal | 6,085 | 6,223 | 6,219 | 6,572 | 7,496 | 14.1 | ||||||||||||||||||
Refined products(1) | n.a. | n.a. | n.a. | n.a. | 5,068 | |||||||||||||||||||
Total | 12,565 | |||||||||||||||||||||||
Notes: | Numbers may not total due to rounding. |
(1) | Began production in 2007 using plants transferred from Pemex-Refining to Pemex-Petrochemicals. Refined products produced at these plants are basically virgin stock. |
58
Year Ended December 31, | 2007 | |||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2006 | |||||||||||||||||||
(in millions of constant pesos at December 31, 2007)(2) | (%) | |||||||||||||||||||||||
Petrochemical Product | ||||||||||||||||||||||||
Ethane derivatives | Ps. | 7,413.4 | Ps. | 9,290.0 | Ps. | 11,084.5 | Ps. | 11,663.1 | Ps. | 11,742.2 | 0.7 | |||||||||||||
Aromatics and derivatives | 2,287.3 | 5,193.1 | 6,006.9 | 6,050.7 | 5,898.5 | (2.5 | ) | |||||||||||||||||
Methane derivatives | 1,960.5 | 2,418.9 | 2,746.3 | 2,786.9 | 3,124.9 | 12.1 | ||||||||||||||||||
Propylene and derivatives | 910.8 | 1,246.0 | 1,173.9 | 352.6 | 346.8 | (1.6 | ) | |||||||||||||||||
Others | 157.9 | 162.7 | 287.1 | 278.5 | 311.8 | 12.0 | ||||||||||||||||||
Total | Ps. | 12,729.9 | Ps. | 18,310.7 | Ps. | 21,298.7 | Ps. | 21,131.8 | Ps. | 21,424.2 | 1.4 | |||||||||||||
(1) | Excludes value added tax. | |
(2) | Figures have been restated to constant pesos as of December 31, 2007, by applying the inflation factors from the respective years through December 31, 2007. For the five years ended December 31, 2007, the inflation factor is the inflation rate for each of these years. |
• | Petroquímica Cosoleacaque, S.A. de C.V.; | |
• | Petroquímica Escolín, S.A. de C.V.; |
59
• | Petroquímica Tula, S.A. de C.V.; | |
• | Petroquímica Camargo, S.A. de C.V.; | |
• | 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; and | |
• | reduce our operational expenses. |
60
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||||||||||||||||||||||
(tbpd) | (%) | (tbpd) | (%) | (tbpd) | (%) | (tbpd) | (%) | (tbpd) | (%) | |||||||||||||||||||||||||||||||
Crude oil exports (by volume) | ||||||||||||||||||||||||||||||||||||||||
Olmeca (API gravity of 38°-39°) | 216 | 12 | 221 | 12 | 216 | 12 | 231 | 13 | 173 | 10 | ||||||||||||||||||||||||||||||
Isthmus (API gravity of 32°-33°) | 25 | 1 | 27 | 1 | 81 | 4 | 68 | 4 | 41 | 2 | ||||||||||||||||||||||||||||||
Maya (API gravity of 21°-22°) | 1,590 | 86 | 1,608 | 86 | 1,506 | 83 | 1,480 | 83 | 1,460 | 87 | ||||||||||||||||||||||||||||||
Altamira (API gravity 15.0°-16.5°) | 14 | 1 | 13 | 1 | 15 | 1 | 14 | 1 | 13 | 1 | ||||||||||||||||||||||||||||||
Total | 1,844 | 100 | 1,870 | 100 | 1,817 | 100 | 1,793 | 100 | 1,686 | 100 | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(U.S. dollars per barrel) | ||||||||||||||||||||
Crude Oil Prices | ||||||||||||||||||||
Olmeca | U.S.$ | 29.32 | U.S.$ | 39.34 | U.S.$ | 53.91 | U.S. $ | 64.67 | U.S.$ | 70.89 | ||||||||||
Isthmus | 28.08 | 38.04 | 53.11 | 57.29 | 69.92 | |||||||||||||||
Maya | 24.13 | 29.82 | 40.61 | 51.10 | 60.38 | |||||||||||||||
Altamira | 22.81 | 28.12 | 36.07 | 45.75 | 53.71 | |||||||||||||||
Weighted average realized price | U.S.$ | 24.78 | U.S.$ | 31.05 | U.S.$ | 42.71 | U.S.$ | 53.04 | U.S.$ | 61.64 |
Percentage of Exports | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
United States | 78.0 | % | 79.2 | % | 78.6 | % | 80.3 | % | 80.2 | % | ||||||||||
Spain | 7.8 | 8.0 | 8.9 | 8.0 | 7.4 | |||||||||||||||
Netherlands Antilles | 5.7 | 6.2 | 5.2 | 4.3 | 4.1 | |||||||||||||||
India | 2.8 | 1.9 | 1.8 | 1.8 | 2.1 | |||||||||||||||
Canada | 1.6 | 1.5 | 2.0 | 2.0 | 1.8 | |||||||||||||||
Others | 6.4 | 3.1 | 3.6 | 3.5 | 4.4 | |||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
61
At December 31, | ||||||||||||||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||||||||||||||||||||||
(tbpd) | (%) | (tbpd) | (%) | (tbpd) | (%) | (tbpd) | (%) | (tbpd) | (%) | |||||||||||||||||||||||||||||||
PMI Crude Oil Export Sales to: | ||||||||||||||||||||||||||||||||||||||||
United States and Canada | 1,467 | 80 | 1,510 | 81 | 1,464 | 81 | 1,477 | 82 | 1,383 | 82 | ||||||||||||||||||||||||||||||
Europe | 176 | 10 | 178 | 10 | 194 | 11 | 171 | 10 | 163 | 10 | ||||||||||||||||||||||||||||||
Central and South America | 137 | 7 | 145 | 8 | 125 | 7 | 113 | 6 | 104 | 6 | ||||||||||||||||||||||||||||||
Far East | 63 | 3 | 36 | 2 | 34 | 2 | 32 | 2 | 35 | 2 | ||||||||||||||||||||||||||||||
Africa | 1 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Total | 1,844 | 100 | 1,870 | 100 | 1,817 | 100 | 1,793 | 100 | 1,686 | 100 | ||||||||||||||||||||||||||||||
Olmeca (API gravity of 38°-39°) | ||||||||||||||||||||||||||||||||||||||||
United States and Canada | 195 | 11 | 208 | 11 | 200 | 11 | 214 | 12 | 160 | 9 | ||||||||||||||||||||||||||||||
Others | 21 | 1 | 14 | 1 | 16 | 1 | 17 | 1 | 13 | 1 | ||||||||||||||||||||||||||||||
Total | 216 | 12 | 221 | 12 | 216 | 12 | 231 | 13 | 173 | 10 | ||||||||||||||||||||||||||||||
Isthmus (API gravity of 32°-33°) | ||||||||||||||||||||||||||||||||||||||||
United States and Canada | 11 | 1 | 6 | — | 38 | 2 | 41 | 2 | 16 | 1 | ||||||||||||||||||||||||||||||
Others | 14 | 1 | 22 | 1 | 43 | 2 | 27 | 1 | 25 | 2 | ||||||||||||||||||||||||||||||
Total | 25 | 1 | 27 | 1 | 81 | 4 | 68 | 4 | 41 | 2 | ||||||||||||||||||||||||||||||
Maya (API gravity of 21°-22°) | ||||||||||||||||||||||||||||||||||||||||
United States and Canada | 1,247 | 68 | 1,283 | 69 | 1,212 | 67 | 1,208 | 67 | 1,195 | 71 | ||||||||||||||||||||||||||||||
Others | 342 | 19 | 325 | 17 | 294 | 16 | 272 | 15 | 265 | 16 | ||||||||||||||||||||||||||||||
Total | 1,590 | 86 | 1,608 | 86 | 1,506 | 83 | 1,480 | 83 | 1,460 | 87 | ||||||||||||||||||||||||||||||
Altamira (API gravity of 15.0°-16.5°) | ||||||||||||||||||||||||||||||||||||||||
United States and Canada | 14 | 1 | 13 | 1 | 15 | 1 | 14 | 1 | 13 | 1 | ||||||||||||||||||||||||||||||
Others | — | — | — | — | — | — | 1 | — | — | — | ||||||||||||||||||||||||||||||
Total | 14 | 1 | 13 | 1 | 15 | 1 | 14 | 1 | 13 | 1 | ||||||||||||||||||||||||||||||
Notes: | Numbers may not total due to rounding. |
62
• | 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 occurred in March 2001; the amount of Maya crude oil supplied is adjusted every six months. On December 31, 2007, the volume to be supplied was set at 188 thousand barrels per day and on May 1, 2008, the volume was adjusted to 177 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. | |
• | 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 in December 2006. | |
• | An agreement with Pecten Trading Company, which is a trading subsidiary of Shell Oil Company, executed on May 1, 1999, and an agreement with P.M.I. Norteamérica, S.A. de C.V., to supply the Deer Park refinery joint venture with a total of approximately 200 thousand barrels per day, 50 of which were under the support mechanism for such contract for a period of seven years following project completion, which occurred in April 2001. Effective May 2008, the contract volume is for approximately 170 thousand barrels per day until 2023. | |
• | An agreement with Marathon Petroleum Supply, LLC (formerly Marathon Ashland Supply, LLC), executed 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. | |
• | An agreement with Valero Marketing and Supply Company and Valero Refining—Texas, L.P., executed 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., executed 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. Therefore, this agreement terminated on April 2008. | |
• | 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 occurred in June 2007. |
63
Year Ended December 31, | ||||||||||||||||||||||||
2007 | ||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2006 | |||||||||||||||||||
(in thousands barrels per day, except as noted) | (%) | |||||||||||||||||||||||
Exports | ||||||||||||||||||||||||
Crude Oil | ||||||||||||||||||||||||
Olmeca | 215.6 | 221.4 | 215.8 | 230.6 | 172.7 | (25.1 | ) | |||||||||||||||||
Isthmus | 24.9 | 27.4 | 81.0 | 68.3 | 41.1 | (39.8 | ) | |||||||||||||||||
Altamira | 13.7 | 13.4 | 14.7 | 14.3 | 12.7 | (11.2 | ) | |||||||||||||||||
Maya | 1,589.6 | 1,608.1 | 1,505.6 | 1,479.5 | 1,459.6 | (1.3 | ) | |||||||||||||||||
Total crude oil | 1,843.9 | 1,870.3 | 1,817.1 | 1,792.7 | 1,686.1 | (5.9 | ) | |||||||||||||||||
Natural gas(1) | — | — | 23.9 | 32.7 | 138.7 | 324.2 | ||||||||||||||||||
Refined products | 178.9 | 151.8 | 186.2 | 188.2 | 176.9 | (6.0 | ) | |||||||||||||||||
Petrochemical products(2)(3) | 834.8 | 915.7 | 853.6 | 823.7 | 746.0 | (9.4 | ) | |||||||||||||||||
Imports | ||||||||||||||||||||||||
Natural gas(1) | 756.9 | 765.6 | 480.4 | 451.0 | 385.6 | (14.5 | ) | |||||||||||||||||
Refined products | 287.2 | 310.5 | 391.9 | 431.1 | 494.0 | 14.6 | ||||||||||||||||||
Petrochemical products(2)(4) | 532.4 | 276.6 | 397.4 | 435.6 | 425.1 | (2.4 | ) |
Note: | Numbers are subject to adjustment because the volume of crude oil exports actually sold during December 2007 may be adjusted to reflect the percentage of water in each shipment. |
(1) | Fuel oil equivalent. Numbers expressed in millions of cubic feet per day. |
(2) | Thousands of metric tons. |
(3) | Includes propylene. |
(4) | Includes isobutane, butane and N-butane. |
64
Year Ended December 31, | 2007 | |||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2006 | |||||||||||||||||||
(in millions of nominal U.S. dollars) | (%) | |||||||||||||||||||||||
Exports | ||||||||||||||||||||||||
Olmeca | U.S. $ | 2,307.7 | U.S.$ | 3,187.9 | U.S. $ | 4,246.4 | U.S. $ | 5,443.4 | U.S.$ | 4,469.1 | (17.9 | ) | ||||||||||||
Isthmus | 255.4 | 380.9 | 1,569.6 | 1,427.9 | 1,049.9 | (26.5 | ) | |||||||||||||||||
Altamira | 114.5 | 138.2 | 193.8 | 238.4 | 248.7 | 4.3 | ||||||||||||||||||
Maya | 13,998.7 | 17,551.0 | 22,319.8 | 27,597.1 | 32,169.6 | 16.6 | ||||||||||||||||||
Total crude oil(2) | U.S.$ | 16,676.3 | U.S. $ | 21,257.9 | U.S. $ | 28,329.5 | U.S. $ | 34,706.8 | U.S.$ | 37,937.2 | 9.3 | |||||||||||||
Natural gas | — | — | 78.9 | 71.8 | 350.5 | 388.2 | ||||||||||||||||||
Refined products | 1,743.5 | 2,036.8 | 3,119.2 | 3,758.0 | 4,116.6 | 9.5 | ||||||||||||||||||
Petrochemical products | 185.9 | 250.8 | 356.7 | 352.6 | 297.1 | (15.7 | ) | |||||||||||||||||
Total natural gas and products | U.S. $ | 1,929.4 | U.S.$ | 2,287.6 | U.S. $ | 3,554.8 | U.S $ | 4,182.4 | U.S.$ | 4,764.2 | 13.9 | |||||||||||||
Total exports | U.S.$ | 18,605.7 | U.S. $ | 23,545.5 | U.S. $ | 31,884.1 | U.S.$ | 38,889.2 | U.S. $ | 42,701.4 | 9.8 | |||||||||||||
Imports | ||||||||||||||||||||||||
Natural gas | U.S. $ | 1,526.2 | U.S.$ | 1,715.1 | U.S.$ | 1,397.9 | U.S. $ | 1,134.5 | U.S. $ | 995.7 | (12.2 | ) | ||||||||||||
Refined products | 3,777.3 | 5,306.2 | 9,418.2 | 12,007.4 | 15,696.2 | 30.7 | ||||||||||||||||||
Petrochemical products | 105.5 | 145.9 | 207.4 | 264.8 | 278.9 | 5.3 | ||||||||||||||||||
Total imports | U.S. $ | 5,409.0 | U.S. $ | 7,167.2 | U.S. $ | 11,023.5 | U.S.$ | 13,406.8 | U.S. $ | 16,970.8 | 26.6 | |||||||||||||
Net exports | U.S.$ | 13,196.7 | U.S.$ | 16,378.3 | U.S.$ | 20,860.6 | U.S.$ | 25,482.4 | U.S.$ | 25,730.6 | 1.0 | |||||||||||||
(1) | Does not include crude oil, refined products and petrochemicals 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. |
65
Year Ended December 31, | ||||||||||||||||||||||||
2005 | 2006 | 2007 | ||||||||||||||||||||||
(tbpd) | (%) | (tbpd ) | (%) | (tbpd ) | (%) | |||||||||||||||||||
Imports | ||||||||||||||||||||||||
Gasoline(1) | 249.4 | 63.6 | 281.2 | 65.1 | 318.6 | 64.5 | ||||||||||||||||||
Fuel oil | 27.5 | 7.0 | 14.3 | 3.3 | 16.9 | 3.4 | ||||||||||||||||||
Liquefied petroleum gas(2) | 72.9 | 18.6 | 75.6 | 17.6 | 82.8 | 16.8 | ||||||||||||||||||
Diesel | 24.9 | 6.4 | 41.3 | 9.6 | 52.7 | 10.7 | ||||||||||||||||||
Others | 17.2 | 4.4 | 18.7 | 4.3 | 22.9 | 4.6 | ||||||||||||||||||
Total | 391.9 | 100.0 | % | 431.1 | 100.0 | % | 494.0 | 100.0 | % | |||||||||||||||
Exports | ||||||||||||||||||||||||
Gasoline(1) | 81.3 | 43.7 | 86.9 | 46.2 | 79.7 | 44.8 | ||||||||||||||||||
Diesel | 0.4 | 0.2 | 0.2 | 0.1 | 2.8 | 1.6 | ||||||||||||||||||
Liquefied petroleum gas(2) | 1.8 | 0.9 | 2.1 | 1.1 | 1.0 | 0.6 | ||||||||||||||||||
Jet fuel | 6.9 | 3.7 | 6.3 | 3.3 | 3.4 | 1.9 | ||||||||||||||||||
Fuel oil | 0.8 | 0.4 | 38.0 | 20.2 | 37.0 | 20.8 | ||||||||||||||||||
Others | 94.9 | 51.0 | 54.6 | 29.0 | 53.9 | 30.3 | ||||||||||||||||||
Total | 186.2 | 100.0 | % | 188.2 | 100.0 | % | 177.8 | 100.0 | % | |||||||||||||||
(1) | Includes methyl terbutyl ether (MTBE) and pentanes. |
(2) | Includes butanes. |
66
Year Ended December 31, | ||||||||||||||||||||||||
2005 | 2006 | 2007 | ||||||||||||||||||||||
(tmt) | (%) | (tmt) | (%) | (tmt) | (%) | |||||||||||||||||||
Imports | ||||||||||||||||||||||||
Isobutane-butane-hex1 | 140.2 | 35.3 | 185.2 | 42.5 | 146.1 | 34.4 | ||||||||||||||||||
Methanol | 123.5 | 31.1 | 153.3 | 35.2 | 191.9 | 45.1 | ||||||||||||||||||
Ammonia | 74.6 | 18.8 | 50.7 | 11.6 | 27.0 | 6.4 | ||||||||||||||||||
Xylenes | 22.8 | 5.7 | 33.2 | 7.6 | 31.8 | 7.5 | ||||||||||||||||||
Toluene | 3.7 | 0.9 | 9.2 | 2.1 | 15.0 | 3.5 | ||||||||||||||||||
Others | 32.5 | 8.2 | 3.9 | 0.9 | 13.3 | 3.1 | ||||||||||||||||||
Total | 397.4 | 100.0 | % | 435.6 | 100.0 | % | 425.1 | 100.0 | % | |||||||||||||||
Exports | ||||||||||||||||||||||||
Sulphur | 487.1 | 57.1 | 484.6 | 58.8 | 471.1 | 63.1 | ||||||||||||||||||
Ammonia | 0.0 | 0.0 | 35.7 | 4.3 | 54.7 | 7.3 | ||||||||||||||||||
Ethylene | 163.9 | 19.2 | 80.1 | 9.7 | 24.4 | 3.3 | ||||||||||||||||||
Polyethylenes | 39.2 | 4.6 | 94.7 | 11.5 | 73.0 | 9.8 | ||||||||||||||||||
Others | 163.4 | 19.1 | 128.7 | 15.6 | 122.9 | 16.5 | ||||||||||||||||||
Total | 853.6 | 100.0 | % | 823.7 | 100.0 | % | 746.0 | 100.0 | % | |||||||||||||||
67
• | 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. |
68
69
70
71
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Estimated Affected Area | Estimated Liability | |||||||
(in hectares) | (in millions of pesos) | |||||||
Northern region | 146.07 | Ps. 292.13 | ||||||
Southern region | 4.69 | 6.17 | ||||||
Total(1) | 150.76 | Ps. 298.30 | ||||||
(1) | During 2007, environmental remediation was completed on 150.8 hectares. There were 20.11 hectares of additional affected areas, including 6.52 hectares in the Northern region and 13.59 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(1) | Liability | |||||||
(in millions of | ||||||||
pesos) | ||||||||
Northern region | 147.00 | Ps. | 73.24 | |||||
Southern region | 0.04 | 0.10 | ||||||
Total | 147.04 | Ps. | 73.34 | |||||
Total estimated environmental liabilities of Pemex-Exploration and Production | Ps. | 371.64 | ||||||
(1) | A total of 320 holding ponds, 315 in the Northern region and 5 in the Southern region, were restored and discharged as liabilities in 2007. A total of 206 holding ponds in the Northern region were classified as new liabilities. |
Estimated | Estimated | |||||||
affected area | Liability | |||||||
(in hectares) | (in millions | |||||||
of pesos) | ||||||||
Pipelines | 0.68 | Ps. 16.79 | ||||||
Refineries | 241.73 | 1,100.14 | ||||||
Storage and Distribution Terminals | 57.47 | 163.25 | ||||||
Other affected areas | 52.00 | 227.52 | ||||||
Total | 351.87 | Ps.1,507.71 | ||||||
Estimated | Estimated | |||||||
affected area | Liability | |||||||
(in hectares) | (in millions of | |||||||
pesos) | ||||||||
Gas Complex Processors | 20.32 | Ps. 202.84 | ||||||
Pipelines | 0.05 | 8.85 | ||||||
Total | 20.37 | Ps. 211.69 | ||||||
74
Estimated | Estimated | |||||||
affected area | Liability | |||||||
(in hectares) | (in millions of | |||||||
pesos) | ||||||||
Cangrejera petrochemical complex | 0.07 | Ps. | 0.4 | |||||
Pajaritos petrochemical complex | 2.03 | 2.0 | ||||||
Total(1) | 2.10 | Ps. | 2.4 | |||||
(1) | All of Pemex-Petrochemicals’ plants have been audited and the table above reflects the only plants determined to require environmental remediation. |
75
• | We contributed Ps.1.7 billion to a variety of charities and development projects in communities in which PEMEX carries out its activities, including: |
– | construction of the Shicbul-Carmen parallel aqueduct in Campeche; | |
– | aid to the people affected by flooding in Tabasco; | |
– | supporting fishing programs in Minatitlán, Veracruz; and | |
– | construction of an underpass on the Matamoros-Monterrey southern beltway, in Tamaulipas. |
• | We commenced remediation work at the former refinery in Azcapotzalco to transform it into a recreational park. At the beginning of 2007, 22 hectares were remediated and the first phase of the project was completed in December 2007. The remediation of the second phase, consisting of 33 hectares, began in January 2008. We expect to have remediated 55 hectares by September 2009. |
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Derecho Ordinario sobre Hidrocarburos (Ordinary Hydrocarbons Duty) | For 2007, the tax rate was 78.76%. 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). |
77
Derecho sobre Hidrocarburos para el Fondo de Estabilización(Hydrocarbon Duty for the Oil Revenues Stabilization 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. | |
Derecho para la Investigación Científicay Tecnológica en Materia de Energía(Duty for the 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. | |
Derecho para la Fiscalización Petrolera (Duty for Fiscal Monitoring of Oil Activities) | A rate of 0.003% is applied to the value of extracted production of crude oil and natural gas for the year. | |
Derecho Extraordinario sobre la Explotación de Petróleo Crudo(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 2007 was U.S.$42.80 per barrel and for 2008 is U.S.$49.00 per barrel. | |
Derecho Adicional(Additional Duty) | This duty is applied 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. |
Impuesto a los Rendimientos Petroleros(Hydrocarbon Income Tax) | A tax rate of 30% is applied to net income, as determined in accordance with the Federal Revenue Law for the applicable fiscal year. |
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Impuesto Especial sobre Producción y Servicios(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, some rates have been negative. The Federal Revenue Law for the Fiscal Year of 2006 and 2007 determined that the amounts resulting from negative IEPS 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. Negative IEPS taxes, if any, in 2008 may also be credited. |
Derecho Ordinario sobre Hidrocarburos(Ordinary Hydrocarbons Duty) | The applicable rate for this duty will be 74.0% in 2008, 73.5% in 2009, 73.0% in 2010, 72.5% in 2011 and 71.5% in 2012. | |
Derecho para la Investigación Científica y Tecnológica enMateria de Energía (Duty for Scientific and Technological Research on Energy) | The rate will be 0.15% of the value of extracted crude oil and natural gas production for 2008, 0.30% in 2009, 0.40% in 2010, 0.50% in 2011 and 0.65% in 2012. Under the prior regime, a fixed rate of 0.05% was applied to the value of extracted crude oil and natural gas production for the year. | |
Derecho Único sobre Hidrocarburos (Sole Hydrocarbons Duty) | For this duty, a floating annual rate is applied to the value of the extracted crude oil and natural gas from abandoned fields or fields that are in the process of being abandoned. Rates will fluctuate between 37% and 57%, depending on the weighted average Mexican crude oil export price. |
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80
Senate | Chamber of Deputies | |||||||||||||||
Seats | % of Total | Seats | % of Total | |||||||||||||
National Action Party | 52 | 40.6 | 207 | 41.4 | ||||||||||||
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 | 18 | 3.6 | ||||||||||||
Labor Party | 5 | 3.9 | 11 | 2.2 | ||||||||||||
New Alliance | 0 | 0.0 | 9 | 1.8 | ||||||||||||
Alternative | 0 | 0.0 | 5 | 1.0 | ||||||||||||
Unaffiliated | 1 | 0.8 | 0 | 0.0 | ||||||||||||
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 the protections 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; | |
• | reduce significantly the persistent social, economic and cultural gaps among the population; | |
• | provide effective opportunities for Mexicans 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. |
81
• | 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 and the competitiveness of the economy, and strengthen 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. |
• | a sustained increase in the economic growth rate above 5%; | |
• | the creation of more that 800,000 jobs per year; and | |
• | a 30% reduction in the percentage of the population living in food poverty. |
• | improving the broad determinants of the competitiveness of the Mexican economy, such as the rule of law, macroeconomic stability and the level of technological development; and | |
• | eliminating the restrictions on the growth of specific economic sectors caused by inadequate legal, regulatory or competition frameworks, or by insufficient availability of resources. |
• | domestic savings should rise from 21.7% of GDP in 2007 to 23.8% in 2012. Public savings should grow from 3.3% of GDP in 2007 to 4.2% in 2012 and private savings from 18.4% of GDP to 19.6% during the same period; and | |
• | external savings are expected to remain below 2.0% of GDP during the2008-2012 period, a level that can be easily financed with the expected flows of foreign direct investment. |
82
• | encouraging higher savings and the intermediation of these savings through the financial system; | |
• | increasing the penetration of the financial system by promoting access to financial services by a higher proportion of the population; | |
• | continuing to increase competition among intermediaries; | |
• | strengthening the debt and equity markets’ role in financing the private sector; | |
• | ensuring the safety, soundness and stability of the financial system; | |
• | developing a financial and consumer protection culture; | |
• | consolidating the national pension system; and | |
• | strengthening and fostering development banks. |
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First three | ||||||||||||||||||||
months | ||||||||||||||||||||
2004 | 2005 | 2006 | 2007(1) | of 2008(1)(2) | ||||||||||||||||
GDP (constant 2003 prices) | 4.0 | % | 3.1 | % | 4.9 | % | 3.2 | % | 2.6 | % | ||||||||||
Primary Activities: | ||||||||||||||||||||
Agriculture, forestry, fishing and hunting | 2.5 | (2.6 | ) | 6.4 | 2.0 | (1.3 | ) | |||||||||||||
Secondary Activities: | ||||||||||||||||||||
Mining | 1.3 | (0.3 | ) | 1.4 | (3.4 | ) | (5.8 | ) | ||||||||||||
Utilities | 4.0 | 2.0 | 12.2 | 7.2 | 8.0 | |||||||||||||||
Construction | 5.3 | 2.5 | 7.9 | 3.0 | 0.1 | |||||||||||||||
Manufacturing | 3.9 | 3.6 | 5.2 | 2.7 | 2.7 | |||||||||||||||
Tertiary activities: | ||||||||||||||||||||
Wholesale and retail trade | 6.9 | 4.6 | 6.2 | 4.1 | 5.4 | |||||||||||||||
Transportation and warehousing | 5.4 | 3.6 | 5.4 | 3.4 | 4.0 | |||||||||||||||
Information | 11.7 | 8.6 | 10.7 | 12.0 | 11.6 | |||||||||||||||
Finance and Insurance | 10.0 | 21.1 | 16.6 | 11.0 | 9.6 | |||||||||||||||
Real estate, rental and leasing | 3.9 | 2.3 | 5.9 | 4.5 | 3.6 | |||||||||||||||
Professional, scientific and technical services | 3.4 | 3.6 | 3.1 | 3.7 | (1.6 | ) | ||||||||||||||
Management of companies and enterprises | 7.1 | 4.8 | 20.1 | 1.3 | 5.0 | |||||||||||||||
Administrative support and waste management and remediation services | 3.7 | 3.6 | 3.7 | 1.7 | 2.5 | |||||||||||||||
Education services | 0.8 | 2.1 | 0.1 | 2.3 | 0.9 | |||||||||||||||
Health care and social assistance | 0.3 | 3.6 | 2.3 | 2.9 | 0.5 | |||||||||||||||
Arts, entertainment and recreation | 4.8 | 0.7 | 2.3 | 6.5 | 4.9 | |||||||||||||||
Accommodation and food services | 3.5 | 0.8 | 1.6 | 2.0 | 3.5 | |||||||||||||||
Other services (except public administration) | 1.9 | 2.2 | 3.3 | 4.2 | 2.6 | |||||||||||||||
Public administration | (1.3 | ) | 2.3 | (0.9 | ) | 0.0 | 0.8 |
(1) | Preliminary. | |
(2) | First three months of 2008 results as compared to the same period of 2007. |
84
• | the announcement of an explicit, multi-year plan to control inflation; | |
• | a systematic analysis of the economy and inflationary pressures; | |
• | a description of the instruments used by Banco de México to achieve its objectives; and | |
• | a policy of communication that promotes transparency, credibility and effective monetary policy. |
85
• | the announcement of an explicit, multi-year plan to control inflation; | |
• | a systematic analysis of the economy and inflationary pressures; | |
• | a description of the instruments used by Banco de México to achieve its objectives; and | |
• | a policy of communication that promotes 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; |
86
• | 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. |
87
• | 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. |
88
89
90
• | to strengthen the framework of fiscal responsibility to ensure a responsible and efficient fiscal policy, including a balanced budget and a prudent management of debt, each of which are core components of the development strategy, with the goal of reducing the historical balance of the public sector’s borrowing requirements and strengthening the mechanisms to carry out counter-cyclical policies; | |
• | to continue to simplify the Mexican taxation system, seeking additional mechanisms to facilitate compliance with tax obligations and reduce tax evasion in order to improve tax collection; | |
• | to ensure the proper implementation of public finance reforms, in particular the Impuesto Empresarial a Tasa Única (Unique Rate Corporate Tax, or IETU), in order to increase non-oil tax revenues and reduce the volatility of total government revenues; | |
• | to improve the allocation and use of expenditures by evaluating their results, based on greater transparency and accountability, including the implementation of an expenditure programs |
91
evaluation system, integrating the Mexican Government’s accounting systems at all three levels of government and giving priority in the allocation of expenditures to sectors and programs that produce better results; and |
• | to promote the development of local financial markets and achieve savings in the financial costs of the public sector through the active management of public debt, while maintaining a level of risk consistent with the natural evolution of public finances and the development of local financial markets. |
2007 and 2008 Budget Assumptions and Targets
2007 | ||||||||||||||||
2006 | Budget | 2007(1) | 2008 Budget | |||||||||||||
Real GDP growth(%) | 4.9 | % | 3.6 | % | 3.2 | % | 3.7 | % | ||||||||
Increase in the national consumer price index(%) | 4.1 | % | 3.0 | % | 3.8 | % | 3.0 | % | ||||||||
Average export price of Mexican oil mix (U.S. $/barrel) | $ | 53.04 | $ | 42.80 | $ | 61.63 | $ | 49.00 | ||||||||
Current account deficit as % of GDP(2) | 0.3 | % | 2.3 | % | 0.6 | % | 1.0 | % | ||||||||
Average exchange rate (Ps./$1.00) | 10.9 | 11.2 | 10.9 | 11.2 | ||||||||||||
Average rate on28-day Cetes (%) | 7.2 | % | 6.8 | % | 7.2 | % | 7.0 | % | ||||||||
Public sector balance as % of GDP(2) | 0.1 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||
Primary balance as % of GDP(2) | 2.8 | % | 2.7 | % | 2.5 | % | n.a. |
(1) | Preliminary. | |
(2) | Calculated with GDP figures resulting from the method of calculation in place prior to April 2008. In April 2008, the following changes to this method of calculation were instituted: (1) 2003 was established as the base year (replacing 1993); (2) new activities were included in the calculation of GDP; and (3) the treatment of taxes was amended in order to reflect more accurately their effect on GDP. The new method of calculation has resulted in increases in nominal GDP of 9.6% for 2003 and 12.6% for 2006. |
92
• | 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. |
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December 31, | March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007(2) | 2008 | |||||||||||||||||||||||||||||||||||||||||||
(in billions of pesos, except percentages) | ||||||||||||||||||||||||||||||||||||||||||||||||
Gross Debt | ||||||||||||||||||||||||||||||||||||||||||||||||
Government Securities | Ps. | 956.7 | 94.5 | % | Ps. | 1,039.3 | 94.6 | % | Ps. | 1,173.3 | 94.5 | % | Ps. | 1,569.9 | 93.9 | % | Ps. | 1,795.8 | 94.7 | % | Ps. | 1,846.4 | 94.2 | % | ||||||||||||||||||||||||
Cetes | 206.4 | 20.4 | 241.5 | 22.0 | 288.2 | 23.2 | 346.0 | 20.7 | 340.5 | 18.0 | 324.2 | 16.5 | ||||||||||||||||||||||||||||||||||||
Floating-Rate Bonds | 354.7 | 35.1 | 310.5 | 28.2 | 287.6 | 23.2 | 359.6 | 21.5 | 325.0 | 17.1 | 300.0 | 15.3 | ||||||||||||||||||||||||||||||||||||
Inflation-Linked Bonds | 83.9 | 8.3 | 84.6 | 7.7 | 95.3 | 7.7 | 155.3 | 9.3 | 235.3 | 12.4 | 258.2 | 13.2 | ||||||||||||||||||||||||||||||||||||
Fixed-Rate Bonds | 311.7 | 30.8 | 402.7 | 36.6 | 502.2 | 40.4 | 709.0 | 42.4 | 895.1 | 47.2 | 964.4 | 49.2 | ||||||||||||||||||||||||||||||||||||
Other | 55.2 | 5.5 | 59.9 | 5.4 | 68.8 | 5.5 | 102.9 | 6.1 | 100.6 | 5.3 | 114.5 | 5.8 | ||||||||||||||||||||||||||||||||||||
Total Gross Debt | 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. | 1,896.3 | 100 | % | Ps. | 1,960.8 | 100 | % | ||||||||||||||||||||||||
Net Debt | ||||||||||||||||||||||||||||||||||||||||||||||||
Financial Assets(3) | (84.8 | ) | (69.2 | ) | (58.8 | ) | (125.7 | ) | (107.9 | ) | (246.4 | ) | ||||||||||||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||||||||||||||||||
Total Net Debt | Ps. | 927.1 | Ps. | 1,030.0 | Ps. | 1,183.3 | Ps. | 1,547.1 | Ps. | 1,788.3 | Ps. | 1,714.4 | ||||||||||||||||||||||||||||||||||||
Gross Internal Debt/GDP(4) | 13.9 | % | 13.2 | % | 13.8 | % | 17.8 | % | 18.3 | % | 18.6 | % | ||||||||||||||||||||||||||||||||||||
Net Internal Debt/GDP(4) | 12.7 | % | 12.4 | % | 13.2 | % | 16.5 | % | 17.3 | % | 16.3 | % |
(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. 13.8 billion at December 31, 2007.Regulación Monetariadoes not increase the Mexican Government’s overall level of internal debt, because Banco de México must reimburse the Mexican Government for any allocated debt that Banco de México sells into the secondary market and that is presented to the Mexican 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 Mexican 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. | |
(4) | Calculated with GDP figures resulting from the method of calculation in place prior to April 2008. See note 2 to the table “2006 and 2007 Results; 2007 and 2008 Budget Assumptions and Targets” under “—Public Finance—2008 Budget.” |
94
95
By Type
Long-Term | ||||||||||||||||||||||||
Debt of | ||||||||||||||||||||||||
Long-Term Direct | Budget | Other Long- | Total Long- | |||||||||||||||||||||
Debt of the Federal | Controlled | Term Public | Total Long- | Total Short- | and Short- | |||||||||||||||||||
Government | Agencies | Debt(2) | Term Debt | Term Debt | Term Debt | |||||||||||||||||||
(in millions of dollars) | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2003 | U.S. $ | 44,898 | U.S. $ | 11,190 | U.S. $ | 21,248 | U.S. $ | 77,336 | U.S. $ | 1,688 | U.S. $ | 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 | ||||||||||||||||||
2007 | 40,114 | 7,745 | 6,576 | 54,435 | 920 | 55,355 | ||||||||||||||||||
March 31, 2008(4) | 39,664 | 10,175 | 6,136 | 55,975 | 3,603 | 59,578 |
December 31, | March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006(4) | 2007 | 2008(4) | |||||||||||||||||||||||||||||||||||||||||||
(in | (in | (in | (in | (in | (in | |||||||||||||||||||||||||||||||||||||||||||
millions of | millions of | millions of | millions of | millions of | millions of | |||||||||||||||||||||||||||||||||||||||||||
$) | (%) | $) | (%) | $) | (%) | $) | (%) | $) | (%) | $) | (%) | |||||||||||||||||||||||||||||||||||||
U.S. Dollars | 70,519 | 89.2 | 71,220 | 89.9 | 65,480 | 91.4 | 50,760 | 92.7 | 44,309 | 80.0 | 48,687 | 81.7 | ||||||||||||||||||||||||||||||||||||
Japanese Yen | 4,013 | 5.1 | 2,937 | 3.7 | 1,990 | 2.8 | 1,006 | 1.8 | 1,157 | 2.1 | 1,123 | 1.9 | ||||||||||||||||||||||||||||||||||||
Pounds | 173 | 0.2 | 186 | 0.2 | 80 | 0.1 | 91 | 0.2 | 1,040 | 1.9 | 1,039 | 1.7 | ||||||||||||||||||||||||||||||||||||
Swiss Francs | 184 | 0.2 | 236 | 0.3 | 171 | 0.2 | 175 | 0.3 | 423 | 0.8 | 481 | 0.8 | ||||||||||||||||||||||||||||||||||||
Others | 4,135 | 5.3 | 4,647 | 5.9 | 3,954 | 5.5 | 2,734 | 5.0 | 8,426 | 15.2 | 8,248 | 13.9 | ||||||||||||||||||||||||||||||||||||
Total | 79,024 | 100.0 | 79,226 | 100.0 | 71,675 | 100.0 | 54,766 | 100.0 | 55,355 | 100.0 | 59,578 | 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, 2008), (b) external borrowings by the public sector after March 31, 2008 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. |
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• | On January 11, 2008, Mexico issued U.S. $1,500,000,000 of its 6.05% Global Notes due 2040. | |
• | During the first quarter of 2008, Mexico repurchased in open market transactions certain of its outstanding U.S. dollar-denominated bonds with maturities between 2009 and 2034, totaling U.S. $714 million. The table below shows the results of the open market transactions. |
Aggregate | Aggregate | Aggregate Principal | ||||||||||||||
Principal Amount | Principal | Amount | ||||||||||||||
Outstanding before | Amount | Outstanding after | ||||||||||||||
Repurchases (in | Repurchased | Repurchases (in | ||||||||||||||
millions of U.S. | (in millions of | millions of U.S. | ||||||||||||||
Title of Purchased Securities | ISIN | dollars) | U.S. dollars) | dollars) | ||||||||||||
10.375% Global Bonds due 2009 | US593048BG58 | U.S.$ | 970 | U.S. $ | 20 | U.S. $ | 950 | |||||||||
8.375% Notes due 2011 | US91086QAF54 | 1,711 | 171 | 1,540 | ||||||||||||
5.875% Global Notes due 2014 | US91086QAQ10 | 1,296 | 5 | 1,291 | ||||||||||||
6.625% Global Notes due 2015 | US91086QAL23 | 1,392 | 48 | 1,344 | ||||||||||||
113/8% Global Bonds due September 15, 2016 | US593048BA88 | 1,771 | 80 | 1,691 | ||||||||||||
8.125% Global Bonds due December 30, 2019 | US593048BN00 | 1,483 | 131 | 1,352 | ||||||||||||
8.00% Global Notes due 2022 | US91086QAJ76 | 743 | 30 | 714 | ||||||||||||
8.30% Global Notes due 2031 | US91086QAG38 | 1,819 | 45 | 1,774 | ||||||||||||
7.500% Global Notes due 2033 | US91086QAN88 | 1,271 | 2 | 1,269 | ||||||||||||
6.75% Global Notes due 2034 | US91086QAS75 | 4,267 | 183 | 4,084 |
• | On April 8, 2008, Mexico issued 1,000,000 Series XWA08 Warrants and 250,000 Series XWB08 Warrants. XWA08 Warrants and Series XWB08 Warrants entitle the holders to exchange, on October 9, 2008 (unless extended, at Mexico’s sole discretion), up to approximately U.S. $1.25 billion of various series of outstanding U.S. dollar, euro, Italian lira and Deutsche-mark denominated bonds issued by Mexico for, in the case of the XWA08 Warrants, peso-denominated MBonos issued by the Mexican Government maturing in 2014, 2017 or 2036 or, in the case of the XWB08 Warrants, UDI-denominated (i.e., inflation indexed), peso-payable Udibonos issued by the Mexican Government maturing in 2017 or 2035. |
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 LPG) 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, salaries, wages and benefits, 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. |
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• | 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; | |
• | 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. |
(1) | Productivity, Efficiency and Project Management: we seek to implement an integrated investment project management system to create operating efficiencies and to improve productivity levels. | |
(2) | Physical and Industrial Safety and Environmental Protection: we seek to strengthen the industrial safety and security measures in our facilities, modernize transportation through our pipelines and enhance our environmental protection activities. | |
(3) | Accountability: we seek to further develop our corporate governance, prevent corruption, improve administrative processes and promote transparency and accountability. | |
(4) | Modernization, Globalization and Customer Service: we seek to increase our capacity to acquire and assimilate new technologies, promote private investment activities in relation to our business, to the extent permitted by the Mexican Constitution, improve customer service and improve PEMEX’s position worldwide. |
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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, | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(in dollars per barrel) | ||||||||||||||||||||
West Texas Intermediate crude oil average price | U.S. $ | 31.06 | U.S. $ | 41.49 | U.S. $ | 56.59 | U.S. $ | 66.04 | U.S. $ | 72.20 | ||||||||||
PEMEX crude oil weighted average export price | 24.78 | 31.05 | 42.71 | 53.04 | 61.64 |
Note: | The numbers in this table are daily average prices for the full year. Spot prices at year end are different. On June 25, 2008, the spot price for West Texas Intermediate crude oil was U.S. $133.97 per barrel and the spot price for the PEMEX crude oil basket was an estimated U.S. $116.36 per barrel. |
Sources: | PMI operating statistics and Platt’s U.S. Market Scan (McGraw-Hill Company). |
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2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||||||||||||||||||||||
Mexico | U.S. | Mexico | U.S. | Mexico | U.S. | Mexico | U.S. | Mexico | U.S. | |||||||||||||||||||||||||||||||
Oil Products | ||||||||||||||||||||||||||||||||||||||||
Unleaded regular gasoline(1) | $ | 87.79 | $ | 60.94 | $ | 86.48 | $ | 72.39 | $ | 92.45 | $ | 92.42 | $ | 96.46 | $ | 104.10 | $ | 100.59 | $ | 110.15 | ||||||||||||||||||||
Premium gasoline(1) | 98.55 | 68.78 | 101.17 | 80.38 | 109.31 | 100.67 | 114.64 | 112.62 | 124.00 | 119.95 | ||||||||||||||||||||||||||||||
Diesel(1) | 72.80 | 61.50 | 71.72 | 72.93 | 76.55 | 99.51 | 79.47 | 111.18 | 85.09 | 118.44 | ||||||||||||||||||||||||||||||
Jet fuel(2) | 36.30 | 34.87 | 47.92 | 48.49 | 71.59 | 72.04 | 81.31 | 80.91 | 88.93 | 89.56 | ||||||||||||||||||||||||||||||
Kerosene(3) | 72.80 | 36.68 | 71.72 | 50.76 | 76.55 | 72.87 | 79.37 | 83.67 | 85.10 | 91.13 | ||||||||||||||||||||||||||||||
Natural Gas(4) Industrial | 5.31 | 5.81 | 6.09 | 6.41 | 7.88 | 8.58 | 6.67 | 7.81 | 6.62 | 7.57 | ||||||||||||||||||||||||||||||
Residential | 7.62 | 10.63 | 9.58 | 12.03 | 11.75 | 14.78 | 11.22 | 13.99 | 11.86 | 14.04 | ||||||||||||||||||||||||||||||
Selected Petrochemicals | ||||||||||||||||||||||||||||||||||||||||
Ammonia(5) | 237.03 | 205.36 | 272.48 | 250.68 | 324.26 | 288.87 | 305.53 | 282.17 | 310.76 | 301.95 | ||||||||||||||||||||||||||||||
Polyethylene L.D.(6) | 948.08 | 1,286.83 | 1,221.15 | 1,504.20 | 1,542.74 | 1,721.57 | 1,504.40 | 1,509.98 | 1,593.26 | 1,345.93 | ||||||||||||||||||||||||||||||
Polyethylene H.D.(7) | 824.86 | 1,187.98 | 978.44 | 1,364.33 | 1,352.18 | 1,552.94 | 1,504.53 | 1,463.60 | 1,485.02 | 1,270.69 | ||||||||||||||||||||||||||||||
Styrene(8) | 885.89 | 873.94 | 1,297.79 | 1,231.44 | 1,419.03 | 1,360.49 | 1,475.00 | 1,358.50 | 1,575.75 | 1,426.84 |
(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). | |
(4) | In U.S. dollars per thousand cubic feet. Excluding taxes. Industrial natural gas prices are for Mexico City and surrounding areas, and correspond to additional volumes requested with prior notification, which is required only one day in advance. Residential prices for 2003 and 2007 are nationally weighted; from 2004 to 2006 prices are for Mexico City. These prices reflects the specific cost of transportation and distribution in the relevant area. U.S prices represent national average industrial prices and Texas residential prices. | |
Sources: Pemex-Gas and Basic Petrochemicals, Energy Regulatory Commission (CRE) and Petroleum Marketing Monthly published by the Energy Information Administration (DOE). | ||
(5) | In U.S. dollars per ton. Prices exclude taxes. Mexico wholesale prices at Cosoleacaque Petrochemical Plant. Spot prices for the Caribbean. | |
Sources: Pemex-Petrochemical and Fertecon Weekly Ammonia Fax (Fertecon Limited) and Fertilizer Market Bulletin (FMB Consultants Ltd.) | ||
(6) | In U.S. dollars per ton. PX 20020 P quality. Prices exclude taxes. Mexico prices to spot consumers. U.S. export prices since June 2006 and U.S. domestic prices for previous years. | |
Sources: Pemex-Petrochemicals and ICIS-Pricing. | ||
(7) | In U.S. dollars per ton. PADMEX 65050 quality. Prices exclude taxes. Mexico prices to spot consumers. U.S. export prices since June 2006 and U.S. domestic prices for previous years.Sources: Pemex-Petrochemicals and ICIS-Pricing. | |
(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-Pricing. |
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Year ended December 31,(1) | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
(in millions of constant pesos as of | ||||||||||||
December 31, 2007) | ||||||||||||
Taxes and duties: | ||||||||||||
Hydrocarbon extraction duties and others | Ps. 538,064 | Ps. 587,021 | Ps. 667,999 | |||||||||
Excess gains duties | 60,870 | 8,224 | — | |||||||||
Hydrocarbon income tax | 2,135 | 4,915 | 6,031 | |||||||||
Income tax | 3,981 | 4,605 | 3,226 | |||||||||
Special tax on production and services(2) | 21,824 | — | — | |||||||||
Total | Ps. 626,874 | Ps. 604,765 | Ps. 677,256 | |||||||||
(1) | The amounts are expressed in millions of constant pesos as of December 31, 2007, and do not represent the amount in nominal terms effectively paid to the corresponding tax authorities. | |
(2) | During 2006 and 2007, no IEPS tax was generated due to negative IEPS tax rates, as explained below. |
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• | Each year, we have adjusted the value of certain of our fixed assets, materials and spare parts on our balance sheet to reflect the effects of inflation. This revaluation has increased our assets in periods of high inflation. When we have revalued fixed assets and inventories to reflect the effects of inflation, our subsequent depreciation and cost of sales charges have increased, reducing our income. The higher carrying value has further exposed us to subsequent impairment charges. Beginning in 2003, we have revalued all of our fixed assets using the NCPI in a comprehensive manner. See Note 3i. to our consolidated financial statements. | |
• | Until December 31, 2007, Mexican FRS required 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 had a net monetary liability position, |
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the income statement reflected a monetary gain as measured by the change in the NCPI. To the extent that we have had a net monetary asset position, the income statement reflected a monetary loss as measured by the change in the NCPI. |
• | the change in the value ofunidades de inversión(UDIs) may be used to determine the inflation for a given period; | |
• | the election to use inventory replacement costs as well as specific indexation for fixed assets is eliminated; | |
• | an entity is only required to recognize the effects of inflation when operating in an inflationary economic environment (i.e.accumulated inflation equal to or higher than 26% in the most recent three-year period); and | |
• | the accounts of (1) gain or loss from holding non-monetary assets (RETANM), (2) monetary position gains or losses (REPOMO), and (3) deficit/excess in equity restatement will be reclassified to retained earnings, when their unrealized portion is not identified. |
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• | The peso depreciated against the U.S. dollar at a rate of 1.0% during 2006 (from Ps. 10.7777 per dollar at December 31, 2005 to Ps. 10.8810 per dollar at December 31, 2006), as compared to a 4.3% appreciation of the peso against the U.S. dollar in 2005 (from Ps. 11.2648 per dollar at December 31, 2004 to Ps. 10.7777 per dollar at December 31, 2005), which resulted in net foreign exchange losses of Ps. 2.5 billion in 2006, as compared to net foreign exchange gains of Ps. 19.0 billion in 2005. | |
• | 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. 14.8 billion in 2006, 15.9% lower than the net gain in monetary position in 2005 of Ps. 17.6 billion. | |
• | These increases in comprehensive financing result were partially offset by a decrease in net interest expense of Ps. 5.3 billion, or 12.8%, from Ps. 41.5 billion in 2005 to Ps. 36.2 billion in 2006. In 2006, interest expense decreased by Ps. 11.0 billion as compared to 2005, while interest income decreased by Ps. 5.7 billion as compared to 2005. |
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Year Ended December 31, | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(in millions of constant pesos as of December 31, 2007) | ||||||||||||||||||||
Total advance payments to the Mexican Government | Ps. | 11,941 | Ps. | 11,589 | Ps. | 16,501 | Ps. | 269 | Ps. | 4,270 | ||||||||||
Dividends declared in respect of Certificates of Contribution “A”(1) | 11,714 | 11,589 | 11,483 | 16,393 | 263 |
(1) | In each of the five years ended December 31, 2007 the dividends were approved by the Board of Directors of Petróleos Mexicanos. |
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(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 | |||
• | cash flow generated from operations; | |
• | the issuance of certificados 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 January 16, 2008, the Master Trust issued, through an inter-company private placement, U.S. $2,000,000,000 of its Floating Rate Notes due 2015; the notes were issued under the Pemex Project Funding Master Trust’s Medium-Term Note Program, Series A; all of the notes were purchased by Petróleos Mexicanos. | |
• | On January 28, 2008, the Master Trust repaid U.S. $500,000,000 of the U.S. $2,500,000,000 borrowed through its syndicated revolving credit facility on October 25, 2007. | |
• | On February 7, 2008, Fideicomiso F/163 renegotiated the maturity date of the Ps. 22,000,000,000 inter-company private placement issued on December 2006, extending its maturity to December 16, 2013. |
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• | On February 7, 2008, Fideicomiso F/163 issued, through an inter-company private placement in Mexico, Ps. 10,000,000,000 of Floating Rate Notes due in 2013; the notes are guaranteed by Petróleos Mexicanos, Pemex-Exploration and Production, Pemex-Refining and Pemex-Gas and Basic Petrochemicals. | |
• | On February 15, 2008, the Master Trust issued, through an inter-company private placement, U.S. $1,500,000,000 of Floating Rate Notes due 2017, under its Medium-Term Note Program, Series A; all of the notes were purchased by Petróleos Mexicanos. | |
• | On February 27, 2008, the Master Trust repaid U.S. $500,000,000 of the U.S. $2,500,000,000 borrowed through its syndicated revolving credit facility on October 25, 2007. | |
• | On February 29, 2008, Petróleos Mexicanos borrowed U.S.$1,000,000,000 from the syndicated revolving facility referred to above. Under this facility, borrowings may be made by either the Master Trust or Petróleos Mexicanos. Borrowings by the Master Trust are guaranteed by Petróleos Mexicanos, Pemex-Exploration and Production, Pemex-Refining and Pemex-Gas and Basic Petrochemicals. | |
• | On March 28, 2008, Petróleos Mexicanos obtained, in the Mexican domestic market, a bank loan for a total of Ps. 10,000,000,000 at a floating rate; the loan matures in December 2008 and is guaranteed by Pemex-Exploration and Production, Pemex-Refining and Pemex-Gas and Basic Petrochemicals. | |
• | On March 28, 2008, Petróleos Mexicanos obtained, in the Mexican domestic market, a bank loan for a total of Ps. 4,000,000,000 at a floating rate, due in June 2008; the loan is guaranteed by Pemex-Exploration and Production, Pemex-Refining and Pemex-Gas and Basic Petrochemicals. | |
• | On March 28, 2008, Petróleos Mexicanos obtained, in the Mexican domestic market, a bank loan for a total of Ps. 3,500,000,000 at a floating rate; the loan matures in December 2008; the loan is guaranteed by Pemex-Exploration and Production, Pemex-Refining and Pemex-Gas and Basic Petrochemicals. | |
• | On May 13, 2008, the Master Trust issued, through an inter-company private placement, U.S. $500,000,000 of Floating Rate Notes due 2021, under its Medium-Term Note Program, Series A; all of the notes were purchased by Petróleos Mexicanos. | |
• | On May 19, 2008, the Master Trust issued, through an inter-company private placement, U.S. $500,000,000 of Floating Rate Notes due 2021, under its Medium-Term Note Program, Series A; all of the notes were purchased by Petróleos Mexicanos. | |
• | In addition, during the month of June, 2008, the following financial activities have taken place: | |
• | On June 2, 2008, the Master Trust entered into a Term Loan Agreement with a commercial bank, in the amount of ¥41,900 million (equivalent to U.S. $400 million) in two tranches of ¥20,950 million each, maturing in 2011 and 2014 respectively. This agreement is guaranteed by Petróleos Mexicanos, Pemex-Exploration and Production, Pemex-Refining and Pemex-Gas and Basic Petrochemicals. | |
• | On June 3, 2008, the Master Trust issued, through an inter-company private placement, U.S. $1,000,000,000 of Floating Rate Notes due 2021, under its Medium-Term Note Program, Series A; all of the notes were purchased by Petróleos Mexicanos. | |
• | On June 4, 2008, the Master Trust issued U.S. $1,000,000,000 of 5.75% Notes due 2018 and U.S. $500,000,000 of 6.625% Bonds due 2038 under its Medium-Term Note Program, Series A; the notes and bonds are guaranteed by Petróleos Mexicanos, Pemex-Exploration and Production, Pemex-Refining and Pemex-Gas and Basic Petrochemicals. |
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• | The Master Trust issued, through inter-company private placements, nine series of floating rate notes under its Medium-Term Note Program, Series A; all of the notes were purchased by Petróleos Mexicanos; the details of each are described below: |
Issue Date | Principal Amount | Maturity Date | ||
February 2, 2007 | U.S. $2,000,000,000 | December 17, 2012 | ||
March 16, 2007 | U.S. $2,500,000,000 | December 16, 2016 | ||
May 4, 2007 | U.S. $1,500,000,000 | December 15, 2014 | ||
June 22, 2007 | U.S. $2,000,000,000 | December 15, 2020 | ||
July 27, 2007 | U.S. $1,000,000,000 | December 15, 2023 | ||
August 24, 2007 | U.S. $1,000,000,000 | December 15, 2023 | ||
October 12, 2007 | U.S. $1,000,000,000 | December 15, 2017 | ||
October 26, 2007 | U.S. $1,000,000,000 | December 15, 2017 | ||
November 26, 2007 | U.S. $1,697,000,000 | December 15, 2015 |
• | On December 13, 2007, Fideicomiso F/163 issued through inter-company private placements Ps. 10,000,000,000 of floating rate debt securities due in 2013, which were purchased by Petróleos Mexicanos. |
• | On October 18, 2007, the Master Trust utilized the full amount of its syndicated revolving credit facility of U.S. $2,500,000,000 entered into on September 7, 2007; under this agreement, borrowings may be made by either the Master Trust or Petróleos Mexicanos; the facility bears interest at a floating rate linked to the London Interbank Offered Rate (LIBOR); the facility matures in 2010 and 2012 and each of the tranches can be extended twice for a period of one year. This facility replaces the two previous syndicated revolving credit facilities, each in the amount of U.S. $1,250,000,000. Borrowings by the Master Trust under this facility are guaranteed by Petróleos Mexicanos, Pemex-Exploration and Production, Pemex-Refining and Pemex-Gas and Basic Petrochemicals. | |
• | On October 22, 2007, the Master Trust issued U.S. $1,500,000,000 of 5.75% Notes due 2018 and U.S. $500,000,000 of 6.625% Bonds due 2035 under its Medium-Term Note Program, Series A; the notes and bonds are guaranteed by Petróleos Mexicanos, Pemex-Exploration and Production, Pemex-Refining and Pemex-Gas and Basic Petrochemicals. |
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Aggregate Principal | ||||||||||||||
Aggregate Principal | Amount Repurchased | Aggregate Principal | ||||||||||||
Title of Purchased | Amount Outstanding | in Open Market | Amount Outstanding | |||||||||||
Securities | ISIN | before Repurchases | Transactions | after Repurchases | ||||||||||
8.50% Notes due 2008 | US706451AA95 | U.S.$ | 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 | ||||||||||
8.000% 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 | ||||||||||
5.750% Notes due 2015 | US706451BF73 | 1,749,457,000 | 28,510,000 | 1,720,947,000 | ||||||||||
9.250% 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 | ||||||||||
9.500% 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 |
Aggregate | ||||||||||||||
Outstanding | Aggregate | Principal | ||||||||||||
Principal | Principal | Amount | ||||||||||||
Amount | Amount | Outstanding | ||||||||||||
Before | Tendered and | After | ||||||||||||
Series of Securities | ISIN | Tender Offers | Not Withdrawn | Tender Offers | ||||||||||
5.750% Notes due 2015 | US706451BF73 | U.S. $ | 1,720,947,000 | U.S. $ | 1,486,575,000 | U.S.$ | 234,372,000 | |||||||
7.375% Notes due 2014 | US706451AH49 | 1,551,059,000 | 1,188,064,000 | 362,995,000 | ||||||||||
7.375% Notes due 2014 | US70645KAM18 | 210,000 | 210,000 | — | ||||||||||
8.000% Notes due 2011 | US706451AF82 | 731,048,000 | 548,874,000 | 182,174,000 | ||||||||||
8.000% Notes due 2011 | US70645KAE91 | 6,386,000 | 820,000 | 5,566,000 | ||||||||||
8.625% Bonds due 2022 | US706451AG65 | 754,234,000 | 593,989,000 | 160,245,000 | ||||||||||
8.625% Bonds due 2022 | US70645JAH59 | 20,000,000 | 20,000,000 | — | ||||||||||
8.625% Bonds due 2022 | US70645KAH23 | 10,010,000 | 10,010,000 | — | ||||||||||
8.625% Guaranteed Bonds due 2023 | US706451BC43 | 225,395,000 | 118,888,000 | 106,507,000 | ||||||||||
8.625% Guaranteed Bonds due 2023 | US70577AR99 | 109,000 | 109,000 | — | ||||||||||
91/4% Guaranteed Bonds due 2018 | US706451BB69 | 334,915,000 | 227,806,000 | 107,109,000 | ||||||||||
91/4% Guaranteed Bonds due 2018 | USU70577AQ17 | 457,000 | 350,000 | 107,000 | ||||||||||
9.50% Guaranteed Bonds due 2027 | US706451BD26 | 573,333,000 | 354,116,000 | 219,217,000 | ||||||||||
9.50% Guaranteed Bonds due 2027 | US706451AW16 | 385,000 | 100,000 | 285,000 | ||||||||||
9.50% Guaranteed Bonds due 2027 | USU70577A572 | 6,440,000 | 150,000 | 6,290,000 |
119
Outstanding | Aggregate | |||||||||||||||||||||
Principal | Aggregate | Principal | ||||||||||||||||||||
Amount | Principal | Final | Amount | |||||||||||||||||||
Before | Amount | Principal | Outstanding | |||||||||||||||||||
Tender | Tendered and | Purchase | Final | After | ||||||||||||||||||
Series of Securities | ISIN | Offers | Not Withdrawn | Amount | Factor | Tender Offers | ||||||||||||||||
8.50% Notes due 2008 | US706451AA95 | U.S. $ | 930,079,000 | U.S.$ | 585,957,000 | U.S.$ | 113,084,000 | 19.4226% | U.S.$ | 816,995,000 | ||||||||||||
US70645JAC62 | 30,000 | 30,000 | 10,000 | 20,000 | ||||||||||||||||||
US70645KAC36 | 15,296,000 | 958,000 | 180,000 | 15,116,000 | ||||||||||||||||||
6.125% Notes due 2008 | US706541AM34 | 709,933,000 | 438,750,000 | 423,533,000 | 96.5586% | 281,400,000 | ||||||||||||||||
US70645KAK51 | 23,742,000 | 16,932,000 | 16,342,000 | 12,401,000 | ||||||||||||||||||
9.375% Guaranteed Notes | US706541BA86 | 468,601,000 | 350,928,000 | 173,826,000 | 49.5679% | 294,775,000 | ||||||||||||||||
due 2008 | USU70577AP34 | 5,267,000 | 2,123,000 | 1,049,000 | 4,218,000 | |||||||||||||||||
7.875% Notes due 2009 | US70645JAK88 | 907,603,000 | 578,202,000 | 109,876,000 | 18.9736% | 797,727,000 | ||||||||||||||||
US70645KAG40 | 4,451,000 | 1,550,000 | 293,000 | 4,158,000 | ||||||||||||||||||
9.125% Notes due 2010 | US706451AB78 | 927,824,000 | 477,445,000 | 374,969,000 | 78.7345% | 552,855,000 | ||||||||||||||||
US70645KAB52 | 1,594,000 | 140,000 | 110,000 | 1,484,000 |
• | 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 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 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 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 Master Trust completed a second exchange of outstanding Petróleos Mexicanos debt securities for new securities issued by the Master Trust, pursuant to which the 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% 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 (which we refer to collectively as the old securities) issued by Petróleos Mexicanos; the old securities were subsequently acquired by Petróleos Mexicanos from the Master Trust; |
120
• | the 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 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 its certificados bursátiles (publicly-traded notes) guaranteed by Petróleos Mexicanos in the Mexican domestic market; | |
• | on September 22, 2006, the 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 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 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 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. |
121
In millions | ||||
of U.S. dollars | ||||
Short-term debt | ||||
Lines of credit with variable interest rates established under committed credit facilities with various international commercial banks | U.S. $ | 4,377 | ||
Lines of credit with fixed interest rates | 2,614 | |||
Total short-term debt | U.S. $ | 6,991 | ||
Long-term debt | ||||
Fixed rate instruments | ||||
Instruments with fixed annual interest rates ranging from 3.23% to 10.61% and maturities ranging from 2008 to 2035 | U.S. $ | 20,932 | ||
Variable rate instruments | ||||
Drawings under lines of credit based on LIBOR and other variable rates with maturities ranging from 2008 to 2018 | U.S. $ | 10,651 | ||
Floating rate notes with maturities ranging from 2008 to 2014 | 7,513 | |||
Total variable rate instruments | U.S. $ | 18,164 | ||
Total long-term debt | U.S. $ | 39,096 | ||
Total indebtedness(1) | U.S. $ | 46,087 | ||
(1) | Excludes accrued interest and includes notes payable to contractors. |
122
In millions | ||||
of U.S. dollars | ||||
Master Trust | ||||
Long-term debt | ||||
Instruments with fixed annual interest rates ranging from 3.23% to 9.5% maturities ranging from 2008 to 2035 | U.S. | $14,592 | ||
Drawings under lines of credit based on LIBOR and other variable rates maturities ranging from 2008 to 2018 | 9,528 | |||
Floating rate notes with maturities ranging from 2008 to 2012 | 2,543 | |||
Obligation to Pemex-Exploration and Production in respect of funds allocated to the Master Trust relating to the sale of accounts receivables by PMI to Pemex Finance, Ltd.(1) | 1,166 | |||
Intercompany private placements at fixed rate(2) | — | |||
Intercompany private placements at variable rate(2) | 16,697 | |||
Short-term debt | ||||
Lines of credit with variable interest rates established under committed credit facilities with various international commercial banks | U.S.$ | 3,676 | ||
Lines of credit with fixed interest rates | 1,779 | |||
Obligation to Pemex-Exploration and Production in respect of funds allocated to the Master Trust relating to the sale of accounts receivables by PMI to Pemex Finance, Ltd.(1) | 325 | |||
Total Master Trust’s indebtedness | 50,306 | |||
Total Master Trust’s intercompany debt | 18,188 | |||
Total consolidated borrowings of Master Trust | U.S. | $32,118 | ||
Fideicomiso F/163 | ||||
Long-term debt | ||||
Instruments with fixed annual interest rates ranging from 8.38% to 11% and maturities ranging from 2008 to 2019 | U.S.$ | $2,937 | ||
Drawings under lines of credit based on LIBOR and other variable rates and maturities ranging from 2008 to 2014 | 5,655 | |||
Intercompany private placements at floating rate(2) | 2,945 | |||
Short-term debt | ||||
Lines of credit with variable interest rates established under committed credit facilities with various national commercial banks | U.S.$ | 309 | ||
Lines of credit with fixed interest rates | 95 | |||
Total Fideicomiso F/163’s indebtedness | 11,941 | |||
Total Fideicomiso F/163’s intercompany debt | 2,945 | |||
Total consolidated borrowings of Fideicomiso F/163 | U.S. | $8,996 | ||
Total intercompany debt | U.S. | $21,133 | ||
Total consolidated indebtedness of Pemex Project Funding Master Trust and Fideicomiso F/163(3) | U.S. | $41,114 | ||
(1) | This amount is not reflected in our consolidated financial statements due to the offsetting effects of the consolidation of the results of both Pemex-Exploration and Production, Master Trust and Pemex Finance, Ltd. (i.e., the effects of intercompany indebtedness are eliminated). | |
(2) | Intercompany private placements do not increase PEMEX’s total indebtedness, since their balances are eliminated in the consolidation. | |
(3) | Excludes accrued interest and notes payable to contractors. |
123
Year Ended December 31,(1) | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(in millions of U.S. dollars)(3) | ||||||||||||||||||||
Domestic Debt in Various Currencies(3) | U.S.$ | 2,900 | U.S.$ | 6,530 | U.S.$ | 10,416 | U.S.$ | 10,885 | U.S.$ | 9,227 | ||||||||||
External Debt(4) | ||||||||||||||||||||
MYRA(5) | U.S. $ | 153 | U.S. $ | 77 | U.S. $ | 38 | — | — | ||||||||||||
Other direct bank loans(6) | 2,769 | 1,789 | 1,186 | 686 | 3,013 | |||||||||||||||
Securities | ||||||||||||||||||||
Bonds(7) | 16,285 | 22,133 | 25,931 | 27,583 | 20,766 | |||||||||||||||
Commercial paper | 432 | — | — | — | — | |||||||||||||||
Total securities | 16,717 | 22,133 | 25,931 | 27,583 | 20,766 | |||||||||||||||
Trade financing(8) | ||||||||||||||||||||
Acceptance lines | 540 | — | — | — | — | |||||||||||||||
Advances from commercial banks(9) | 3,323 | 2,409 | 4,370 | 4,310 | 4,250 | |||||||||||||||
Total trade financing | 3,863 | 2,409 | 4,370 | 4,310 | 4,250 | |||||||||||||||
Purchasing loans(10) | 387 | 366 | 309 | 257 | 171 | |||||||||||||||
Financial leases | 254 | 197 | 153 | 70 | — | |||||||||||||||
Export credit agency loans (project finance)(11) | 4,636 | 5,471 | 6,322 | 7,439 | 7,434 | |||||||||||||||
Notes payable to contractors | 1,195 | 1,186 | 1,068 | 952 | 1,227 | |||||||||||||||
Total external debt | U.S.$ | 29,974 | U.S. $ | 33,628 | U.S.$ | 39,377 | U.S.$ | 41,297 | U.S.$ | 36,861 | ||||||||||
Total Indebtedness(2) | U.S.$ | 32,874 | U.S.$ | 40,158 | U.S.$ | 49,793 | U.S.$ | 52,183 | U.S.$ | 46,087 | ||||||||||
(1) | Figures do not include accrued interest. Accrued interest was U.S. $459 million, U.S. $231 million, U.S. $95 million, U.S. $139 million and U.S.$5.4 million at December 31, 2003, 2004, 2005, 2006 and 2007, respectively. | |
(2) | Includes U.S. $22.5 billion, U.S. $26.0 billion, U.S. $32.9 billion , U.S. $35.5 billion and U.S. $32.1 billion of indebtedness of the Master Trust as of December 31, 2003, 2004, 2005, 2006 and 2007, respectively, and U.S. $1.4 billion, U.S. $5.5 billion, U.S. $9.9 billion, U.S. $10.6 billion and U.S. $9.0 billion of indebtedness of Fideicomiso F/163 as of December 31, 2003, 2004, 2005, 2006 and 2007, 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. 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, Ps. 10.8810 = U.S. $1.00 for 2006 and Ps. 10.8662 = U.S. $1.00 for 2007. See Notes 3 and 10 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 U.S. $2.5 billion under a syndicated revolving credit facility in 2007. | |
(7) | Includes, in 2004, 2005, 2006 and 2007, issuance by RepCon Lux, S.A. of U.S. $1.37 billion of its 4.5% Guaranteed Exchangeable Bonds due 2011 and in 2005, 2006 and 2007, U.S. $2.3 billion, U.S. $1.9 billion and U.S. $1.5 billion, respectively, of bonds issued by Pemex Finance, Ltd. See “—Financing Activities of Pemex Finance, Ltd” below. | |
(8) | To finance external trade of crude oil and derivatives. | |
(9) | Includes indebtedness of the Master Trust in trade financing advances from commercial banks of 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, U.S. $4.3 billion as of December 31, 2006 and U.S. $4.25 billion as of December 31, 2007. | |
(10) | To finance imports of equipment and spare parts. | |
(11) | Includes U.S. $4,529 million, U.S. $5,428 million, U.S. $6,285 million, U.S. $7,409 million and U.S.$7,411 million of indebtedness of the Master Trust as of December 31, 2003, 2004, 2005, 2006 and 2007, respectively. |
124
125
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. $ | 44,863.1 | U.S. $ | 6,576.8 | U.S. $ | 12,158.1 | U.S. $ | 8,699.8 | U.S. $ | 17,428.3 | ||||||||||
Notes payable to contractors(2) | 1,226.6 | 416.6 | 505.4 | 60.4 | 244.2 | |||||||||||||||
Other long-term liabilities: | ||||||||||||||||||||
Dismantlement and abandonment costs obligations(3) | 1,578.1 | 104.2 | 205.5 | 250.0 | 1,018.5 | |||||||||||||||
Employee benefit plan(4) | 48,609.6 | 2,862.2 | 6,151.0 | 7,241.1 | 32,355.3 | |||||||||||||||
Total contractual obligations recognized in balance sheet | 96,277.4 | 9,959.8 | 19,020.0 | 16,251.3 | 51,046.4 | |||||||||||||||
Other contractual obligations not recognized in liabilities: | ||||||||||||||||||||
PIDIREGAS commitments(5) | 28,168.5 | 5,090.6 | 12,727.5 | 3,478.0 | 6,872.5 | |||||||||||||||
Financed Public Works Contracts(6) | 640.4 | 45.7 | 91.4 | 91.3 | 412.0 | |||||||||||||||
Nitrogen supply contract(7) | 1,685.4 | 181.3 | 314.1 | 318.8 | 871.3 | |||||||||||||||
Total contractual obligations not recognized in liabilities | 30,494.4 | 5,317.6 | 13,133.0 | 3,888.1 | 8,155.8 | |||||||||||||||
Total contractual obligations | U.S.$ | 126,771.9 | U.S. $ | 15,277.4 | U.S.$ | 32,153.0 | U.S. $ | 20,139.4 | U.S.$ | 59,202.1 | ||||||||||
(1) | All amounts calculated in accordance with Mexican FRS. | |
(2) | See Note 10 to our consolidated financial statements. | |
(3) | See Note 3e., 3i. and 9 to our consolidated financial statements. | |
(4) | See Note 12 to our consolidated financial statements. | |
(5) | As of December 31, 2007 PEMEX had entered into contracts with various contractors for an approximate amount of Ps. 306,084.6 million (U.S. $28,168.5 million). These contracts are for the development of PIDIREGAS. Figures in the table include only the amounts corresponding to the works pending to be performed by the third-party contractors. | |
(6) | See Note 15c. to our consolidated financial statements. | |
(7) | See Note 15b. to our consolidated financial statements. |
Fair value of contracts outstanding at the beginning of the period | U.S.$ | 5,488 | ||
Contracts realized or otherwise settled during the period | 11,440 | |||
Fair value of new contracts when entered into during the period | 1,314 | |||
Other changes in fair values | (16,681 | ) | ||
Fair value of contracts outstanding at the end of the period | U.S.$ | 1,560.9 | ||
126
Maturity less | Maturity in | |||||||||||||||||||
than | Maturity | Maturity | excess of 5 | |||||||||||||||||
Source of Fair Value | 1 year | 1-3 years | 4-5 years | years | Total fair value | |||||||||||||||
(in thousands of U.S. dollars) | ||||||||||||||||||||
Prices actively quoted | (U.S. $38.33 | ) | — | — | — | (U.S. $38.33 | ) | |||||||||||||
Prices provided by other external sources | U.S.$1,394.17 | U.S.$205.10 | — | — | U.S.$1,599.26 |
Year Ended December 31, | 2006 | 2007 | ||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2005 | vs. 2006 | ||||||||||||||||||||||
(in millions of constant pesos at December 31, 2007) | ||||||||||||||||||||||||||||
(%) | (%) | |||||||||||||||||||||||||||
Exploration and Production | ||||||||||||||||||||||||||||
Trade sales(1) | — | — | — | — | — | — | — | |||||||||||||||||||||
Intersegment sales | Ps. | 500,671 | Ps. | 625,864 | Ps. | 773,337 | Ps. | 890,012 | Ps. | 912,295 | 15.1 | 2.5 | ||||||||||||||||
Total net sales | 500,671 | 625,864 | 773,337 | 890,012 | 912,295 | 15.1 | 2.5 | |||||||||||||||||||||
Refining | ||||||||||||||||||||||||||||
Trade sales(1)(2) | 334,187 | 352,693 | 381,355 | 406,963 | 430,383 | 6.7 | 5.8 | |||||||||||||||||||||
Intersegment sales | 27,509 | 30,146 | 41,308 | 46,242 | 42,229 | 11.9 | (8.7 | ) | ||||||||||||||||||||
Total net sales | 361,696 | 382,840 | 422,663 | 453,206 | 472,612 | 7.2 | 4.3 | |||||||||||||||||||||
Gas and Basic Petrochemicals | ||||||||||||||||||||||||||||
Trade sales(1) | 107,450 | 129,468 | 144,987 | 138,688 | 139,963 | (4.3 | ) | 0.9 | ||||||||||||||||||||
Intersegment sales | 59,621 | 74,956 | 89,170 | 83,058 | 82,941 | (6.9 | ) | (0.1 | ) | |||||||||||||||||||
Total net sales | 167,071 | 204,424 | 234,158 | 221,746 | 222,904 | (5.3 | ) | 0.5 | ||||||||||||||||||||
Petrochemicals | ||||||||||||||||||||||||||||
Trade sales(1) | 12,800 | 18,770 | 21,827 | 21,639 | 21,702 | (0.9 | ) | 0.3 | ||||||||||||||||||||
Intersegment sales | 7,112 | 8,217 | 9,518 | 9,654 | 35,942 | 1.4 | 272.3 | |||||||||||||||||||||
Total net sales | 19,911 | 26,987 | 31,345 | 31,293 | 57,644 | (0.2 | ) | 84.2 | ||||||||||||||||||||
Corporate and subsidiary companies | ||||||||||||||||||||||||||||
Trade sales(1)(3) | 281,818 | 364,190 | 455,660 | 536,220 | 543,988 | 17.7 | 1.4 | |||||||||||||||||||||
Intersegment sales and eliminations | (594,913 | ) | (739,182 | ) | (913,332 | ) | (1,028,969 | ) | (1,073,408 | ) | 12.7 | 4.3 | ||||||||||||||||
Total net sales | (313,095 | ) | (374,992 | ) | (457,672 | ) | (492,749 | ) | (529,420 | ) | 7.7 | 7.4 | ||||||||||||||||
Total Net Sales | Ps. | 736,254 | Ps. | 865,122 | Ps. | 1,003,831 | Ps. | 1,103,510 | Ps. | 1,136,035 | 9.9 | 2.9 | ||||||||||||||||
(1) | Sales to external customers. | |
(2) | Includes IEPS tax, except in 2006 and 2007, when the IEPS tax rate was negative. | |
(3) | Includes services income. |
127
Year Ended December 31, | 2006 | 2007 | ||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | vs. 2005 | vs. 2006 | ||||||||||||||||||||||
(in millions of constant pesos at December 31, 2007) | (%) | (%) | ||||||||||||||||||||||||||
Business Segment | ||||||||||||||||||||||||||||
Exploration and Production | Ps. | 1,316 | Ps. | (15,250 | ) | Ps. | (19,702 | ) | Ps. | 75,888 | Ps. | 19,966 | — | (73.7 | ) | |||||||||||||
Refining | (42,505 | ) | (24,612 | ) | (57,508 | ) | (35,326 | ) | (45,654 | ) | (38.6 | ) | (29.2 | ) | ||||||||||||||
Gas and Basic Petrochemicals | 9,017 | 13,000 | 7,214 | 6,312 | 4,958 | (12.5 | ) | (21.5 | ) | |||||||||||||||||||
Petrochemicals | (17,156 | ) | (13,739 | ) | (17,852 | ) | (18,029 | ) | (16,086 | ) | 1.0 | (10.8 | ) | |||||||||||||||
Corporate and subsidiary companies(1) | 1,629 | 12,157 | 5,490 | 18,108 | 18,508 | 229.8 | 2.2 | |||||||||||||||||||||
Total net income/(loss) | Ps. | (47,699 | ) | Ps. | (28,443 | ) | Ps. | (82,358 | ) | Ps. | 46,953 | Ps. | (18,308 | ) | — | — | ||||||||||||
(1) | Includes intersegment eliminations. |
128
129
130
• | 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. |
• | FRS B-10 “Effects of inflation,” which supersedes Bulletin B-10 and its five amendments, as well as the related circulars and Interpretation of Financial Reporting Standards (INIF) 2. The principal guidelines established by this FRS include: (1) the change in the value of theunidad de inversión (UDI) may be used to determine inflation for a given period; (2) the election to use inventory replacement costs as well as specific indexation for fixed assets is eliminated; (3) an entity is only required to recognize the effects of inflation when operating in an inflationary economic environment, which exists when accumulated inflation is equal to or higher than 26% in the most recent three-year period; and (4) the accounts of (a) gain or loss from holding non-monetary assets (RETANM), (b) monetary position gains or losses (REPOMO), and (c) deficit/excess in equity restatement will be reclassified to retained earnings, when their unrealized portion is not identified. We estimate that the initial effects of this new FRS will result in a charge to retained earnings and a credit to surplus in the restatement of equity of Ps. 178,172 million. | |
• | FRS D-3 “Employee benefits,” which supersedesBulletin D-3, the portion applicable to Employee Statutory Profit Sharing (ESPS) ofBulletin D-4 and INIF 4. The principal guidelines established by this FRS are: (1) a maximum of five years for amortizing unrecognized/unamortized items, with the option for immediate recognition of actuarial gains or losses in results of operations; (2) the elimination of the recognition of an additional liability and related intangible asset and any related item as a separate element of stockholders’ equity; (3) the inclusion of severance benefits in results of operations; and (4) the presentation of ESPS, including deferred ESPS, in the statement of income as ordinary operations. In addition, FRS D-3 establishes that the asset and liability method required by FRS D-4 should be used for determining deferred ESPS, and that any effects arising from the change are to be recognized in retained earnings, with no restatement of prior years’ financial statements. We are currently evaluating the impact of the initial effects of this new FRS. | |
• | FRS D-4 “Tax on earnings,” which supersedesBulletin D-4 and Circulars 53 and 54. The principal guidelines established by this FRS are: (1) the reclassification of balance of the cumulative income tax effects resulting from the initial adoption of Bulletin D-4 in 2000 to retained earnings; (2) the recognition of asset taxes as a tax credit (benefit), rather than a tax prepayment; and (3) the transfer of the accounting treatment of ESPS incurred and deferred to FRS D-3, as outlined above. We estimate that the initial effects of this new FRS will not be material. | |
• | FRS B-2 “Statement of cash flows,” which supersedes Bulletin B-12 and paragraph 33 ofBulletin B-16. The principal guidelines established by this FRS are: (1) the replacement of the statement of changes in financial position with the statement of cash flows; (2) the reporting of cash inflows and cash outflows in nominal currency units, i.e., the effects of inflation are not |
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included; (3) the establishment of two alternative preparation methods (direct and indirect), without stating a preference for either method. In addition, cash flows from operating activities are to be reported first, followed by cash flows from investing activities and finally cash flows from financing activities; (4) the reporting of captions of principal items as gross; and (5) the requirement of disclosure of the composition of those items considered cash equivalents. |
• | FRS B-15 “Translation of foreign currencies,” which supersedesBulletin B-15. The principal guidelines established by this FRS are: (1) the substitution of the integrated foreign operation and foreign entity concepts for determining recording currency, functional currency and reporting currency, requiring that translation be made based on the economic environment in which the entity operates, regardless of its dependency on a holding company; and (2) the inclusion of translation procedures for those cases where the reporting currency is different from the functional currency. | |
• | FRS B-13 “Subsequent events,” which requires, among other things, the recognition of assets and liabilities restructuring charges 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. | |
• | FRS C-13 “Related Parties,” which extends to the definition and scope of the related parties and increases the disclosure requirements in the notes to the financial statements. |
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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 Casa de Moneda de México; 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, S.N.C.; 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 PROFEPA; 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 Head of the President’s Office Born: 1965 Business experience: Coordinator of Cabinets and Special Projects of the President’s Office; Management and Finance Coordinator of Felipe Calderón’s presidential campaign; and President of Linde Pullman 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 the President-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 del 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 Mexico; Executive Vice President 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 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Mr. Agustín Guillermo Carstens Carstens | Board Member of Petróleos Mexicanos and Secretary of Finance and Public Credit Born: 1958 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 Chief of Staff of the Governor of 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 Nacional Financiera, S.N.C.; Chairman of Sociedad Hipotecaria Federal, S.N.C.; Aeropuertos y Servicios Auxiliares; Caminos y Puentes Federales de Ingresos y Servicios Conexos; Chairman of 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; Fondo de Cultura Económica; Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado; Instituto Mexicano del Seguro Social; Instituto para la Protección al Ahorro Bancario; Chairman of Servicio de Administración y Enajenación de Bienes; Chairman of Servicio de Administración Tributaria; 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; Consejo Nacional de Infraestructura; Governor for Mexico of Inter-American Development Bank; Governor for Mexico of Inter-American Investment Corporation; Governor for Mexico of the International Bank for Reconstruction and Development (World Bank); Governor for Mexico of International Development Association; Governor for Mexico of the Multilateral Investment Guarantee Agency of the World Bank; Governor for Mexico of the Caribbean Development Bank; and Chairman of the Foreign Exchange Commission of Banco de México. | 2007 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
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 LIXth Legislature; 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 | ||||
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: Chairman of the 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; Acting Deputy Director of the Financial Information Systems of Petróleos Mexicanos; Chief of Staff of the Corporate Financial Office of Petróleos Mexicanos; and Associate Consultant and Engagement Manager of McKinsey & Co. Other board memberships: Instituto Mexicano del Petróleo; Instalaciones Inmobiliarias para Industrias, S.A. de C.V.; and I.I.I. Servicios, S.A. de C.V. | 2006 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
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 of Corporate Finance for Latin America of West Merchant Bank, Ltd. | 2006 | ||||
Mr. Víctor M. Cámara Peón | Deputy Director of Financial Information Systems Born: 1943 Business experience: Advisor of the Chief Financial Officer of Petróleos Mexicanos; Director of Control and Operational Risk of Banco Nacional de México, S.A.; and Director General of Human Resources 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 | ||||
Vacant | Deputy Director of Economic Planning | |||||
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 Trader 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 |
139
Name | Position with Petróleos Mexicanos | Year Appointed | ||||
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 | ||||
Mr. Ignacio López Rodríguez | Deputy Director of Corporate Services Born: 1971 Business experience: Private Secretary of the Corporate Director of Management of Petróleos Mexicanos; Advisor of the Corporate Director of Management of Petróleos Mexicanos; and Technical Coordinator of the Corporate Director of Management of Petróleos Mexicanos. | 2007 | ||||
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 High Specialty 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; Leader of Human Resources 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: Chief Executive Officer 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 | ||||
Mr. Manuel Reynaud Aveleyra | Deputy Director of Business Process and Technological Infrastructure Born: 1954 Business experience: Chairman and Director General of PAGOSS, S.A. de C.V.; Chairman and Director General of Procesar, S.A. de C.V.; and Director General of Afore Santander Mexicano, S.A. de C.V. Other board memberships: Chairman and Director General of PAGOSS, S.A. de C.V. | 2008 |
140
Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Mr. Guillermo Ruiz Gutiérrez | Deputy Director of Strategy and Operative Planning Born: 1959 Business experience: Deputy Director of Operations Evaluation of Pemex-Refining; Associate Managing Director of Operations and Evaluation of Petróleos Mexicanos; and Deputy Manager of Economic Studies of Petróleos Mexicanos. | 2004 | ||||
Mr. Alejandro Martínez Sibaja | Deputy Director of Operation 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. | 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 Disputes 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 | ||||
Mr. Francisco Fernández Lagos | 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. | 2008 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Mr. Pedro Ismael Hernández Delgado(1)( | 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. Other board memberships: Corporación Mexicana de Investigación en Materiales, S.A. de C.V. (Alternate) | 2006 | ||||
Mr. Jorge José Borja Navarrete | Corporate Director of Engineering and Project Development Born: 1943 Business experience: Director General of ICA Flour Daniel, S. de R.L. de C.V.; Executive Vicepresident of Empresas ICA, S.A. de C.V.; and Director General of ICA Industrial, S.A. de C.V. | 2007 | ||||
Vacant | Deputy Director of Engineering | |||||
Mr. Luis Felipe Luna Melo | Deputy Director of Planning, Evaluation and Control Born: 1956 Business experience: Deputy Director of Natural Gas of Pemex-Gas and Basic Petrochemicals; President of P.M.I. Norteamérica, S.A. de C.V.; and Deputy Manager of Analysis of PMI. | 2007 | ||||
Mr. Francisco Guillermo Iturbide Ruiz | Deputy Director of Contracts Born: 1951 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 of Pemex-Gas and Basic Petrochemicals; Vice President of Projects of P.M.I. Holdings North America, Inc.; and Deputy Manager of Works Supply Planning of Petróleos Mexicanos. | 2005 | ||||
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 San Luis R.C. 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 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
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 of GEA Grupo de Economistas y Asociados, S.C.; 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 | ||||
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; 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 |
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Name | Position with Petróleos Mexicanos | Year Appointed | ||||
Mr. Raoul Mauricio Capdevielle Orozco | Technical Secretary of the Director General Born: 1943 Business experience: Deputy Comptroller of Liabilities and Citizen Service 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 Basálticos 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 | ||||
Vacant | Board Member of Pemex-Exploration and Production | |||||
Mr. Dionisio Arturo Pérez-Jácome Friscione | Board Member of Pemex-Exploration and Production and Undersecretary of Disbursements of the Ministry of Finance and Public Credit Born: 1967 Business experience: Chief of Staff of the President’s Office; Coordinator of Economy Policy at the Public Policy Unit of the Transition Team of President Elect; Director of Mercer Management Consulting; and President of the Energy Regulatory Commission. Other board memberships: 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; and Banco Nacional de Comercio Exterior, S.N.C. | 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 |
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Name | Position with Pemex-Exploration and Production | Year Appointed | ||||
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 Pemex-Exploration and Production; 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 | ||||
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 |
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Name | Position with Pemex-Exploration and Production | Year Appointed | ||||
Mr. Rogelio Bartolomé Morando Sedas | Deputy Director of Industrial Safety and Environmental Protection (formerly named as 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 | Technical Deputy Director of Exploitation (formerly named Deputy Director of Technical Coordination of Exploitation) Born: 1944 Business Experience: Deputy Director (Southerrn region) of Pemex-Exploration and Production; Deputy Director of Human Resources, Competitiveness and Innovation of Pemex-Exploration and Production; and Associate Managing Director of Professional Development of Pemex-Exploration and Production. | 2007 | ||||
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 |
147
Name | Position with Pemex-Exploration and Production | Year Appointed | ||||
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 Imaserve; Director of Administrative Systems of Scotiabank Inverlat, S.A.; and External Consultant on Administrative Systems. | 2003 | ||||
Mr. Pedro Silva López | Deputy Director (Southwestern Marine region) Born: 1953 Business experience: Deputy Director of Operations Coordination of Petróleos Mexicanos; Executive Director of SGP 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 |
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Name | Position with Pemex-Exploration and Production | Year Appointed | ||||
Mr. José Antonio Escalera Alcocer | Technical Deputy Director of Exploration (formerly named as 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. Néstor Martínez Romero | Acting Deputy Director of Human Resources, Competitiveness and Innovation Born: 1959 Business experience: Associate Managing Director of Development and Compensation of Pemex-Exploration and Production; Associate Managing Director of Negotiation and Technological Transfer of Pemex-Exploration and Production; and Analyst of Pemex-Exploration and Production. | 2008 | ||||
Mr. Karim Elías Bobadilla | Head of the Internal Control Body Born: 1971 Business Experience: Director General of Management of the President’s Office; Leader of Government Banking of Grupo Financiero HSBC; and Executive of Commercial Banking of Grupo Financiero HSBC. | 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 Hernán Herrera Flores | Board Member of Pemex-Refining and Undersecretary of Energy Planning and Technological Development of the Ministry of Energy Born: 1972 Business experience: Director General of the Investments Promotion Unit of the Ministry of Energy; Private Secretary of the Ministry of Energy; and Private Secretary of the Director General of Banco Nacional de Obras y Servicios Públicos, S.N.C. | 2007 | ||||
Vacant | Board Member of Pemex-Refining | |||||
Mr. Dionisio Arturo 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 | ||||
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 |
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Name | Position with Pemex-Refining | Year Appointed | ||||
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 Chief of Planning Staff 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 | ||||
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 of Pemex-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 |
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Name | Position with Pemex-Refining | Year Appointed | ||||
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 | ||||
Vacant | Board Member of Pemex-Gas and Basic Petrochemicals | |||||
Mr. Dionisio Arturo 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 of Pemex-Gas and Basic Petrochemicals; and Associate Managing Director of Control and Measuring of Pemex-Gas and Basic Petrochemicals. | 2006 | ||||
Mr. Salvador Ortiz Vértiz | Deputy Director of Natural Gas Born: 1949 Business experience: Deputy Director of Planning of Pemex-Gas and Basic Petrochemicals; General Coordinator of Mining of the Ministry of Economy; and Assistant Director of Grupo Financiero Banamex-Accival, S.A. | 2007 | ||||
Mr. Miguel Francisco Bueno Fernández | Deputy Director of Liquefied 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 | ||||
Ms. Gabriela Torres Ramírez | Deputy Director of Planning Born: 1954 Business experience: Chief of Staff of the Director General of Pemex-Gas and Basic Petrochemicals; Consul General of Mexico in San Diego (California) of the Ministry of Foreign Affairs; and Director General of Economic Liaisons with Latin America and the Caribbean of the Ministry of Foreign Affairs. | 2007 | ||||
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 Planning 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 | 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 Hernán Herrera Flores | Board Member of Pemex-Petrochemicals (refer to Pemex-Refining) | 2007 | ||||
Vacant | Board Member of Pemex-Petrochemicals | |||||
Mr. Dionisio Arturo 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 of Industrias Negromex, S.A. de C.V.; Director General of Housmex Inc.; and Director General of Hules Mexicanos, S.A. | 2001 | ||||
Mr. Lorenzo Aldeco Ramírez | Deputy Director of Planning Born: 1955 Business experience: Deputy Director of Trading of Pemex-Petrochemicals; Deputy Director of Operations of Pemex-Petrochemicals; and Deputy Director of Planning of Pemex-Petrochemicals. | 2007 | ||||
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 Planning and Budgeting of Petróleos Mexicanos; and Deputy Director of Planning of Pemex-Petrochemicals. | 2001 | ||||
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 | Deputy Director of Trading Born: 1947 Business experience: Executive Director of Petrochemical Projects of Pemex-Petrochemicals; Deputy Director of Trading of Pemex-Refining; and Deputy Director of Trading of Pemex-Petrochemicals. | 2007 |
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Name | Position with Pemex-Petrochemicals | Year Appointed | ||||
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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Position with the Independent | ||||||
Audit Committee of Petróleos | ||||||
Name | Mexicanos | Year of Expiration | ||||
Mr. Felipe César Mellado Flores | Chairman. Born: 1950 Business experience: Assistant Director General of Grupo Azucarero México, S.A. de C.V.; Director General of Management and Finance of Grupo Industrial Saltillo, S.A.B. de C.V.; Director General of Electrodomestic Division of Grupo Industrial Saltillo, S.A.B. de C.V. Board memberships: Aguas de Saltillo, S.A. de C.V.; Instituto Tecnológico y de Estudios Superiores de Monterrey Campus Saltillo; Cámara Nacional de la Industria de Transformación in Coahuila (Southeastern region); and Centro Empresarial Coahuila Sureste. | 2012 | ||||
Mr. Ricardo Samaniego Breach | Member. Born: 1953 Business experience: Director of the Applied Economy and Public Policies Center of the Instituto Tecnológico Autónomo de México; Chief of Staff of the Secretary of Energy; and Head of the Energy Operations Unit of the Ministry of Energy. | 2011 | ||||
Mr. Fernando Vilchis Platas | Member and Financial Expert. Born: 1930 Business experience: Partner of Martín Marmolejo y Asociados; Advisor of the Undersecretaries of Public-Sector Entities, Mines, Basic Industry and Energy of the Ministry of Energy; and Partner of PricewaterhouseCoopers, S.C. Board memberships: Horton International; and Reider y Asociados. | 2010 |
• | supervise the processes of formulating, compiling and disclosing accounting and financial information and ensure that the financial statements conform to applicable accounting standards and auditing rules; | |
• | approve the selection and appointment of the external auditor; | |
• | supervise the preparation and issuance of the auditor’s report on our financial statements; | |
• | ensure that we hire external auditors that are independent; | |
• | provide an opinion on the appropriateness of retaining the external auditor to perform non-audit services, when necessary, in order to avoid a conflict of interest as to the external auditor’s independence; |
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• | provide an opinion regarding the administration’s work policy, valuation and risk management as they relate to the operational and financial condition of the entity; | |
• | propose improvements to the system of internal control, including technological and informational improvements; | |
• | propose ways to address significant findings arising from audits and internal control processes; | |
• | periodically, or at the request of governmental or other supervisory authorities, report on the results of the committee’s work; | |
• | propose revisions and modifications to the Guidelines for the Independent Audit Committee; | |
• | obtain information from PEMEX, as is necessary for the committee to complete its work; | |
• | devise, approve and, when necessary, modify committee procedures; and | |
• | resolve any issues presented to the committee for its consideration. |
At December 31, | 2007 | |||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | % of Total | |||||||||||||||||||
Pemex-Exploration and Production | 46,322 | 47,975 | 48,371 | 48,767 | 49,045 | 34.8 | ||||||||||||||||||
Pemex-Refining | 46,692 | 44,899 | 45,335 | 45,494 | 44,811 | 31.7 | ||||||||||||||||||
Pemex-Petrochemicals | 14,203 | 13,895 | 13,939 | 14,045 | 13,823 | 9.8 | ||||||||||||||||||
Pemex-Gas and Basic Petrochemicals | 12,104 | 11,923 | 12,018 | 12,562 | 12,397 | 8.8 | ||||||||||||||||||
Petróleos Mexicanos | 18,894 | 19,030 | 19,508 | 20,407 | 21,070 | 14.9 | ||||||||||||||||||
Total | 138,215 | 137,722 | 139,171 | 141,275 | 141,146 | 100.0 | ||||||||||||||||||
PMI Group | 336 | 336 | 327 | 322 | 320 |
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Item 7. | Major Shareholders and Related Party Transactions |
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Item 8. | Financial Information |
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• | a proposal to modify the Federal Criminal Codes (Código Penal Federal,Código Federal de Procedimientos Penales,Código Fiscal de la FederaciónandLey Federal Contra la Delincuencia Organizada) in order to facilitate locating those responsible for criminal activity. This proposal is currently under evaluation by the Mexican Congress; | |
• | improvements in the handling of fuels inside our facilities and supervision of the operating controls related to fuels, such as: |
– | the use of a specialized electronic surveillance device that is inserted into the pipelines, which senses, records and locates irregularities and other corrosion, and helps locate holes from which fuel products could be taken illegally; |
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– | the creation of “vulnerability maps” of our facilities, which highlight those areas most vulnerable to security breaches and where the implementation of additional safety measures is recommended; | |
– | the implementation of satellite monitoring of our tankers to keep track of their location at all times; and | |
– | the implementation of a video monitoring system, which has been installed in 66 of the 77 storage and distribution terminals that operates together with a system of 24 mobile laboratories to analyze the quality of fuels in over 8,000 retail service stations in Mexico. |
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• | On December 5, 2005, Impulsora filed an amparo (No. 1519/2005) before the Juzgado 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 to be executed by Pemex-Refining with the service stations. This proceeding has been joined with a pending proceeding filed by Bardahl de México, S.A. de C.V. (Bardahl), a competitor in the lubricants market, which claims that it is the owner of the “Mexlub” trademark. Bardahl seeks a ruling under which it would be permitted to sell its products in the service stations of Mexico, thereby eliminating the exclusive right of Mexicana de Lubricantes to sell its lubricants. As of the date of this report, a constitutional hearing is still pending. | |
• | On December 26, 2005, Pemex-Refining filed a commercial claim (No. 127/2005) against Mexicana de Lubricantes before the Juzgado Segundo de Distrito en Materia Civil (Second Civil District Court) in the state of Jalisco to compel Impulsora to convene a general shareholders’ meeting. On June 29, 2007, a judgment was issued in favor of Pemex-Refining. Mexicana de Lubricantes was ordered to convene a general shareholders’ meeting but it was not ordered to pay for any damages. Both parties appealed this judgment before the Primer Tribunal Unitario del Tercer Circuito (First Unit Court of the Third Circuit). As of the date of this report, the resolution of these appeals 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 Mexicana de Lubricantes. As of the date of this report, the matter is still under investigation. | |
• | On October 17, 2006, Pemex-Refining filed a commercial claim (No. 222/2006) against Impulsora before the Juzgado Octavo de Distrito en Materia Civil (Eight Civil District Court) in Mexico City, pursuant to which Pemex-Refining is seeking to enforce its contractual right to exercise a |
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purchase option of the Mexicana de Lubricantes 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. Pemex-Refining filed an expert’s opinion on shares valuation. An accounting report is still pending the delivery of certain documentation by the external auditor of Mexicana de Lubricantes, to Pemex-Refining’s expert. |
• | On March 28, 2008, Mexicana de Lubricantes filed a commercial claim (No. 28/2007) against Pemex-Refining before the Juzgado Primero de Distrito en Materia Civil (First District Civil Court) in the Federal District seeking, among other things, a judicial judgment declaring null and void any advance termination or cancellation of the following agreements executed between Mexicana de Lubricantes and Pemex-Refining: (i) a license and trademark contract; (ii) a basic greases supply contract; and (iii) a contract for the manufacture of lubricants and greases for Petróleos Mexicanos and the subsidiary entities. Pemex-Refining filed its response to this claim on April 10, 2008. Mexicana de Lubricantes filed a motion arguing that the authorized representative of Pemex-Refining did not have the authority to represent Pemex-Refining. Both parties have filed their evidence. On May 30, 2008 Pemex-Refining filed its allegations and as of the date of this report, a resolution is still pending. | |
• | In addition, there is an administrative proceeding before the Federal Competition Commission under which several claims have been filed. On July 10, 2003, the Federal Competition Commission issued a resolution(No. 10-62-97) (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 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. On January 15, 2008, the Federal Competition Commission requested that Pemex-Refining provide evidence of its compliance with the Resolution. Pemex-Refining argued that it was not able to comply with the Resolution due to a suspension granted to Bardhal. On April 10, 2008, the Commission announced that Pemex-Refining was required to comply with the resolution within 15 days. On January 10, 2008, Pemex-Refining filed an amparo (No. 46/2008 VI.) against this resolution before the Juzgado Sexto de Distrito en Materia Administrativa (Sixth Administrative District Court) in the Federal District. On April 30, 2008, the judge issued a resolution declaring the Resolution unconstitutional, but the ruling was limited to the Resolution and did not include the Ley Federal de Competencia Económica, as requested also by Pemex-Refining. Pemex-Refining filed a suspension, which was granted on May 6, 2008. On May 20, 2008, Mexicana de Lubricantes and Impulsora filed a motion in this proceeding as third parties. On May 27, 2008, the Federal Competition Commission filed a revision motion. On May 29, 2008, Mexicana de Lubricantes and Impulsora also filed revised motions. |
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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 SHCP 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 SHCP 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 31, 2000, among the 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 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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Item 11. | Quantitative and Qualitative Disclosures about Market Risk |
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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; |
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• | 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 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 | ||||||||||||||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | Thereafter | Value | Fair Value | |||||||||||||||||||||||||
(in thousands of nominal pesos) | ||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Outstanding debt | ||||||||||||||||||||||||||||||||
Fixed rate (U.S. dollars) | 25,066,345 | 34,679,676 | 10,969,650 | 18,788,719 | 1,202,626 | 60,088,474 | 150,795,491 | 166,017,227 | ||||||||||||||||||||||||
Average Interest Rate(%) | — | — | — | — | — | — | 7.4987 | % | ||||||||||||||||||||||||
Fixed rate (Japanese yen) | 2,310,201 | 2,443,282 | 1,529,726 | 850,233 | 850,233 | 6,270,637 | 14,254,312 | 15,293,656 | ||||||||||||||||||||||||
Average Interest Rate(%) | — | — | — | — | — | — | 2.5521 | % | ||||||||||||||||||||||||
Fixed rate (Pounds) | — | — | — | — | — | 8,642,960 | 8,642,960 | 9,199,394 | ||||||||||||||||||||||||
Average Interest Rate(%) | — | — | — | — | — | — | 7.5000 | % | ||||||||||||||||||||||||
Fixed rate (Pesos) | 1,027,500 | — | 6,172,000 | 2,000,000 | 2,000,000 | 21,745,244 | 32,944,744 | 30,547,752 | ||||||||||||||||||||||||
Average Interest Rate(%) | — | — | — | — | — | — | 6.2618 | % | ||||||||||||||||||||||||
Fixed rate (Euro) | 840 | 840 | 11,908,290 | 840 | 840 | 37,311,352 | 49,223,002 | 49,236,616 | ||||||||||||||||||||||||
Average Interest Rate(%) | — | — | — | — | — | — | 6.1326 | % | ||||||||||||||||||||||||
Total fixed rate debt | 28,404,886 | 37,123,798 | 30,579,666 | 21,639,792 | 4,053,699 | 134,058,667 | 255,860,509 | 270,294,645 | ||||||||||||||||||||||||
Variable rate (U.S. dollars) | 42,560,947 | 16,385,418 | 25,658,523 | 26,321,621 | 32,075,153 | 35,487,688 | 178,489,350 | 180,715,506 | ||||||||||||||||||||||||
Variable rate (Euro) | 1,639,916 | — | — | — | — | — | 1,639,916 | 1,742,687 | ||||||||||||||||||||||||
Variable rate (pesos) | 3,361,389 | 13,944,444 | 13,912,600 | 8,300,000 | 2,800,000 | 22,487,400 | 64,805,833 | 66,028,634 | ||||||||||||||||||||||||
Total variable rate debt | 47,562,252 | 30,329,862 | 39,571,123 | 34,621,621 | 34,875,153 | 57,975,088 | 244,935,099 | 248,486,827 | ||||||||||||||||||||||||
Total Debt | 75,967,138 | 67,453,660 | 70,150,789 | 56,261,413 | 38,928,852 | 192,033,755 | 500,795,608 | 518,781,472 | ||||||||||||||||||||||||
(1) | The information in this table has been calculated using exchange rates at December 31, 2007 of Ps. 10.8662 = U.S. $1.00; Ps. 0.0973 = 1.00 Japanese yen; Ps. 21.6074 = 1.00 British pound; Ps. 15.8766 = 1.00 Euro. |
178
Year of Expected Maturity Date | ||||||||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||||||||
Notional | ||||||||||||||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | Thereafter | Amount | Fair Value(2) | |||||||||||||||||||||||||
(in thousands of nominal pesos) | ||||||||||||||||||||||||||||||||
Hedging Instruments | ||||||||||||||||||||||||||||||||
Interest Rate Swaps (U.S. Dollar) | ||||||||||||||||||||||||||||||||
Variable to Fixed | 412,996 | 412,996 | 412,996 | — | — | — | 1,238,989 | (13,681 | ) | |||||||||||||||||||||||
Average pay rate | 4.94 | % | 4.94 | % | 4.94 | % | — | — | — | 4.94 | % | n.a. | ||||||||||||||||||||
Average receive rate | 4.75 | % | 3.54 | % | 3.66 | % | — | — | — | 3.98 | % | n.a. | ||||||||||||||||||||
Interest Rate Swaps (Mexican Pesos) | ||||||||||||||||||||||||||||||||
Variable to Fixed | 2,472,500 | 5,000,000 | 600,000 | 1,200,000 | 1,200,000 | 7,500,000 | 17,972,500 | (1,439,470 | ) | |||||||||||||||||||||||
Average pay rate | 10.62 | % | 10.83 | % | 10.95 | % | 11.01 | % | 11.19 | % | 11.48 | % | 11.01 | % | n.a. | |||||||||||||||||
Average receive rate | 8.14 | % | 8.30 | % | 8.40 | % | 8.56 | % | 8.73 | % | 8.86 | % | 8.50 | % | n.a. | |||||||||||||||||
Cross Currency Swaps | ||||||||||||||||||||||||||||||||
Receive Euro / | ||||||||||||||||||||||||||||||||
Pay U.S. dollars | 1,501,184 | — | 10,627,144 | — | — | 32,601,860 | 44,730,188 | 3,549,308 | ||||||||||||||||||||||||
Receive Japanese Yen/ | ||||||||||||||||||||||||||||||||
Pay U.S. dollars | 2,130,189 | 2,262,363 | 1,436,274 | 861,532 | 861,532 | 5,997,946 | 13,549,835 | (355,956 | ) | |||||||||||||||||||||||
Receive Pounds/ | ||||||||||||||||||||||||||||||||
Pay U.S. dollars | — | — | — | — | — | 7,417,159 | 7,417,159 | 1,120,775 | ||||||||||||||||||||||||
Receive UDI/ | ||||||||||||||||||||||||||||||||
Pay Mexican peso | — | — | — | — | — | 11,901,650 | 11,901,650 | 221,101 | ||||||||||||||||||||||||
Non-Hedging Instruments(3) | ||||||||||||||||||||||||||||||||
Interest Rate Swaps | ||||||||||||||||||||||||||||||||
Variable to fixed | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Average pay rate(%) | — | — | — | — | — | — | — | n.a. | ||||||||||||||||||||||||
Average receive rate(%) | — | — | — | — | — | — | — | n.a. | ||||||||||||||||||||||||
Total | — | — | — | — | — | — | — | — |
Notes: | Numbers may not total due to rounding. |
(1) | The information in this table has been calculated using exchange rates at December 31, 2007 of Ps. 10.8662 = U.S. $1.00. | |
(2) | Positive numbers represent a favorable fair value to PEMEX. | |
(3) | As of December 31, 2007, all derivative financial instruments held by PEMEX qualified as hedging instruments. |
Item 12. | Description of Securities Other than Equity Securities |
179
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 |
(a) | Disclosure Controls and Procedures |
(b) | Management’s annual report on internal control over financial reporting |
(1) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of PEMEX; | |
(2) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with Mexican FRS, including the reconciliation to U.S. GAAP in accordance with Item 18 ofForm 20-F, and that receipts and expenditures of PEMEX are being made only in accordance with authorizations of management and directors of the relevant entity; and | |
(3) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of PEMEX’s assets that could have a material effect on our financial statements. |
180
(c) | Attestation report of the independent registered public accounting firm |
(d) | Changes in internal control over financial reporting |
Item 16A. | Audit Committee Financial Expert |
Item 16B. | Code of Ethics |
Item 16C. | Principal Accountant Fees and Services |
181
Year ended December 31, | ||||||||
2006 | 2007 | |||||||
(in thousands of nominal pesos) | ||||||||
Audit fees | Ps. | 29,831 | Ps. | 10,646 | ||||
Audit-related fees | 791 | — | ||||||
Tax fees | 2,429 | 96 | ||||||
Other fees | 22,303 | — | ||||||
Total fees | Ps. | 55,354 | Ps. | 10,742 | ||||
Year ended December 31, 2007 | ||||||||
(in thousands of nominal pesos) | ||||||||
Audit fees | Ps. | 23,597 | ||||||
Audit-related fees | 1,359 | |||||||
Tax fees | 1,580 | |||||||
Other fees | 3,194 | |||||||
Total fees | Ps. | 29,730 | ||||||
182
Item 16D. | Exemptions from the Listing Standards for Audit Committees |
Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
183
Item 17. | Financial Statements. |
Item 18. | Financial Statements. |
Item 19. | Exhibits. |
1 | .1 | Ley Orgánica de Petróleos Mexicanos y Organismos Subsidiarios(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(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 Petróleos 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 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 | .4 | Indenture, dated as of July 31, 2000, among 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 | .5 | 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). |
184
2 | .6 | Indenture, dated as of December 30, 2004 among 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 | .7 | 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 | .8 | 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 | .9 | 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 | .10 | 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 | .11 | 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 | .12 | 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 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 | .13 | Amendment No. 1, dated as of August 17, 2006, to the Assignment and Indemnity Agreement among Petróleos Mexicanos, Pemex-Exploración y Producción, Pemex-Refinación, Pemex-Gas y Petroquímica Básica and 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 | .14 | 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 | 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). | ||
7 | .1 | Computation of Ratio of Earnings to Fixed Charges. | ||
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 4. | ||
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. |
185
By: | /s/ Esteban Levin Balcells |
186
AND SUBSIDIARY COMPANIES
AND SUBSIDIARY COMPANIES
Contents | Page | |
Report of KPMG Cárdenas Dosal, S.C., Registered Public Accounting Firm | F-2 | |
Report of PricewaterhouseCoopers, Registered Public Accounting Firm | F-3 | |
Consolidated financial statements | ||
Consolidated balance sheets | F-4 | |
Consolidated statement of operations | F-5 | |
Consolidated statements of changes in equity | F-6 | |
Consolidated statements of changes in financial position | F-7 | |
Notes to the consolidated financial statements | F-8 through F-100 |
F-1
And the Board of Directors of
Petróleos Mexicanos:
/s/ Eduardo Palomino |
F-2
and the Board of Directors of
Petróleos Mexicanos:
F-3
AND SUBSIDIARY COMPANIES
2007 | 2007 | 2006 | ||||||||||
(Unaudited) | ||||||||||||
ASSETS: | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents (Note 5) | U.S. $ | 15,736,617 | Ps. | 170,997,240 | Ps. | 195,776,457 | ||||||
Accounts, notes receivable and other — Net (Note 6) | 13,943,286 | 151,510,543 | 137,163,105 | |||||||||
Inventories — Net (Note 7) | 8,571,822 | 93,143,136 | 62,063,798 | |||||||||
Derivative financial instruments (Note 11) | 1,188,075 | 12,909,868 | 4,389,836 | |||||||||
23,703,183 | 257,563,547 | 203,616,739 | ||||||||||
Total current assets | 39,439,800 | 428,560,787 | 399,393,196 | |||||||||
Investments in shares of non consolidated subsidiaries and affiliates (Note 8) | 3,042,770 | 33,063,354 | 32,760,946 | |||||||||
Properties, plant and equipment — Net (Note 9) | 73,056,399 | 793,845,453 | 737,195,457 | |||||||||
Intangible asset derived from the actuarial computation of labor obligations (Note 12) | 6,626,864 | 72,008,835 | 76,495,133 | |||||||||
Other assets — Net | 257,880 | 2,802,177 | 4,175,692 | |||||||||
Total assets | U.S. $ | 122,423,713 | Ps. | 1,330,280,606 | Ps. | 1,250,020,424 | ||||||
LIABILITIES: | ||||||||||||
Current liabilities: | ||||||||||||
Current portion of long-term debt (Note 10) | U.S. $ | 6,998,778 | Ps. | 76,050,128 | Ps. | 66,240,278 | ||||||
Suppliers | 3,233,728 | 35,138,344 | 37,102,983 | |||||||||
Accounts and accrued expenses payable | 1,665,488 | 18,097,530 | 14,592,081 | |||||||||
Taxes payable | 13,490,765 | 146,593,355 | 45,006,644 | |||||||||
Derivative financial instruments (Note 11) | 1,250,160 | 13,584,495 | 13,372,143 | |||||||||
Total current liabilities | 26,638,919 | 289,463,852 | 176,314,129 | |||||||||
Long-term liabilities: | ||||||||||||
Long-term debt (Note 10) | 39,096,323 | 424,828,472 | 524,475,242 | |||||||||
Reserve for sundry creditors and others | 2,895,883 | 31,467,252 | 31,513,072 | |||||||||
Reserve for labor obligations (Note 12) | 48,609,566 | 528,201,272 | 471,665,183 | |||||||||
Deferred taxes (Note 18i.) | 590,077 | 6,411,897 | 4,597,172 | |||||||||
Total liabilities | 117,830,768 | 1,280,372,745 | 1,208,564,798 | |||||||||
EQUITY (Note 14): | ||||||||||||
Certificates of Contribution “A” | 8,922,897 | 96,957,993 | 96,957,993 | |||||||||
Mexican Government increase in equity of Subsidiary Entities | 13,294,217 | 144,457,629 | 133,296,805 | |||||||||
Surplus in the restatement of equity | 16,430,011 | 178,531,795 | 159,893,393 | |||||||||
Effect on equity from labor obligations (Note 12) | (4,763,352 | ) | (51,759,539 | ) | (48,326,747 | ) | ||||||
Derivative financial instruments (Note 11) | (101,749 | ) | (1,105,629 | ) | (1,762,328 | ) | ||||||
33,782,024 | 367,082,249 | 340,059,116 | ||||||||||
Accumulated losses: | ||||||||||||
From prior years | (27,504,262 | ) | (298,866,819 | ) | (345,556,695 | ) | ||||||
Net income (loss) for the year | (1,684,817 | ) | (18,307,569 | ) | 46,953,205 | |||||||
(29,189,079 | ) | (317,174,388 | ) | (298,603,490 | ) | |||||||
Total equity | 4,592,945 | 49,907,861 | 41,455,626 | |||||||||
Commitments and contingencies (Notes 15 and 16) | — | — | — | |||||||||
Total liabilities and equity | U.S. $ | 122,423,713 | Ps. | 1,330,280,606 | Ps. | 1,250,020,424 | ||||||
F-4
AND SUBSIDIARY COMPANIES
2007 | 2007 | 2006 | 2005 | |||||||||||||
(Unaudited) | ||||||||||||||||
Net sales: | ||||||||||||||||
Domestic | U.S. $ | 54,485,281 | Ps. | 592,047,961 | Ps. | 567,289,873 | Ps. | 545,339,433 | ||||||||
Export | 49,964,740 | 542,926,858 | 535,144,048 | 457,266,832 | ||||||||||||
Services income | 97,606 | 1,060,609 | 1,075,947 | 1,224,808 | ||||||||||||
Total revenues | 104,547,627 | 1,136,035,428 | 1,103,509,868 | 1,003,831,073 | ||||||||||||
Cost of sales | 42,394,374 | 460,665,742 | 418,258,210 | 389,943,899 | ||||||||||||
Gross income | 62,153,253 | 675,369,686 | 685,251,658 | 613,887,174 | ||||||||||||
General expenses: | ||||||||||||||||
Transportation and distribution expenses | 2,282,172 | 24,798,539 | 24,921,656 | 23,655,910 | ||||||||||||
Administrative expenses | 5,534,636 | 60,140,465 | 56,052,773 | 50,527,884 | ||||||||||||
Total general expenses | 7,816,808 | 84,939,004 | 80,974,429 | 74,183,794 | ||||||||||||
Operating income | 54,336,446 | 590,430,682 | 604,277,229 | 539,703,380 | ||||||||||||
Other revenues (principally IEPS benefit) — Net (Note 18h.) | 7,640,114 | 83,019,010 | 61,213,533 | 2,896,394 | ||||||||||||
Comprehensive financing result: | ||||||||||||||||
Interest — Net | (2,896,873 | ) | (31,478,006 | ) | (36,195,263 | ) | (41,500,949 | ) | ||||||||
Exchange (loss) gain — Net | (132,048 | ) | (1,434,868 | ) | (2,470,584 | ) | 19,031,585 | |||||||||
Gain on monetary position | 1,184,064 | 12,866,287 | 14,819,222 | 17,633,273 | ||||||||||||
(1,844,857 | ) | (20,046,587 | ) | (23,846,625 | ) | (4,836,091 | ) | |||||||||
Profit sharing in non-consolidated subsidiaries and affiliates (Note 8) | 510,303 | 5,545,054 | 10,073,577 | 8,658,665 | ||||||||||||
Income before taxes and duties | 60,642,006 | 658,948,159 | 651,717,714 | 546,422,348 | ||||||||||||
Hydrocarbon extraction duties and others (Note 18) | 61,474,951 | 667,999,120 | 587,020,786 | 538,063,741 | ||||||||||||
Excess gain duties (Note 18d.) | — | — | 8,223,820 | 60,869,738 | ||||||||||||
Hydrocarbon income tax (Note 18i.) | 554,965 | 6,030,367 | 4,914,859 | 2,135,245 | ||||||||||||
Income tax (Note 18k.) | 296,906 | 3,226,241 | 4,605,044 | 3,981,678 | ||||||||||||
Special tax on production and services (IEPS Tax) (Note 18h.) | — | — | — | 21,824,060 | ||||||||||||
62,326,822 | 677,255,728 | 604,764,509 | 626,874,462 | |||||||||||||
Cumulative effect of adoption of new accounting standards (Notes 3l. and 3m.) | — | — | — | (1,905,868 | ) | |||||||||||
Net (loss) income for the year | (U.S.$ | 1,684,816 | ) | (Ps. | 18,307,569 | ) | Ps. | 46,953,205 | (Ps. | 82,357,982 | ) | |||||
F-5
Mexican | ||||||||||||||||||||||||||||||||
Government | ||||||||||||||||||||||||||||||||
increase | Surplus | Effect | Retained earnings | |||||||||||||||||||||||||||||
in equity of | in the | Derivative | on equity | (Accumulated losses) | ||||||||||||||||||||||||||||
Certificates of | Subsidiary | restatement | financial | from labor | From prior | For the | ||||||||||||||||||||||||||
Contribution ‘‘A” | Entities | of equity | instruments | obligations | years | year | Total | |||||||||||||||||||||||||
Balances as of December 31, 2004 | Ps. | 96,957,993 | Ps. | 36,411,340 | Ps. | 147,644,457 | Ps. | — | (Ps. | 7,782,166 | ) | (Ps. 207,589,715 | ) | (Ps. | 28,443,617 | ) | Ps. | 37,198,292 | ||||||||||||||
Transfer to prior years’ accumulated losses | — | — | — | — | (28,443,617 | ) | 28,443,617 | — | ||||||||||||||||||||||||
Minimum guaranteed dividends paid to the Mexican Government approved by the Board of Directors on June 10, 2006 (Note 14) | — | — | — | — | — | (11,482,869 | ) | — | (11,482,869 | ) | ||||||||||||||||||||||
Increase in equity of the Subsidiary Entities made by the Mexican Government (Note 14) | 48,157,553 | 48,157,553 | ||||||||||||||||||||||||||||||
Comprehensive loss for the year (Note 13) | 8,184,288 | (7,036,437 | ) | (21,672,659 | ) | — | (82,357,982 | ) | (102,882,790 | ) | ||||||||||||||||||||||
Balances as of December 31, 2005 | 96,957,993 | 84,568,893 | 155,828,745 | (7,036,437 | ) | (29,454,825 | ) | (247,516,201 | ) | (82,357,982 | ) | (29,009,814 | ) | |||||||||||||||||||
Transfer to prior years’ accumulated losses | — | — | — | — | — | (82,357,982 | ) | 82,357,982 | — | |||||||||||||||||||||||
Minimum guaranteed dividends paid to the Mexican Government approved by the Board of Directors on May 18th, 2005 (Note 14) | — | — | — | — | — | (16,392,606 | ) | — | (16,392,606 | ) | ||||||||||||||||||||||
Increase in equity of the Subsidiary Entities made by the Mexican Government | 48,727,912 | 48,727,912 | ||||||||||||||||||||||||||||||
Comprehensive income for the year (Note 13) | 4,064,648 | 5,274,109 | (18,871,922 | ) | 710,094 | 46,953,205 | 38,130,134 | |||||||||||||||||||||||||
Balances as of December 31, 2006 | 96,957,993 | 133,296,805 | 159,893,393 | (1,762,328 | ) | (48,326,747 | ) | (345,556,695 | ) | 46,953,205 | 41,455,626 | |||||||||||||||||||||
Transfer to prior years’ accumulated losses | — | — | — | — | — | 46,953,205 | (46,953,205 | ) | — | |||||||||||||||||||||||
Minimum guaranteed dividends paid to the Mexican Government approved by the Board of Directors on August 29, 2007 (Note 14) | — | — | — | — | — | (263,329 | ) | — | (263,329} | |||||||||||||||||||||||
Increase in equity of the Subsidiary Entities made by the Mexican Government (Note 14) | — | 11,160,824 | — | — | — | — | — | 11,160,824 | ||||||||||||||||||||||||
Comprehensive loss for the year (Note 13) | — | — | 18,638,402 | 656,699 | (3,432,792 | ) | — | (18,307,569 | ) | (2,445,260 | ) | |||||||||||||||||||||
Balances as of December 31, 2007 | Ps. | 96,957,993 | Ps. | 144,457,629 | Ps. | 178,531,795 | (Ps. | 1,105,629 | ) | (Ps. | 51,759,539 | ) | (Ps. 298,866,819 | ) | (Ps | 18,307,569 | ) | Ps. | 49,907,861 | |||||||||||||
Unaudited | U.S.$ | 8,922,897 | U.S.$ | 13,294,217 | U.S.$ | 16,430,011 | (U.S.$ | 101,749 | ) | U.S.$ | 4,763,352 | (U.S.$ | 27,504,262 | ) | (U.S.$ | 1,684,817 | ) | U.S.$ | 4,592,945 | |||||||||||||
F-6
AND SUBSIDIARY COMPANIES
2007 | 2007 | 2006 | 2005 | |||||||||||||
(Unaudited) | ||||||||||||||||
Operating activities: | ||||||||||||||||
Net (loss) income for the year | (U.S.$ | 1,684,817 | ) | (Ps. | 18,307,569 | ) | Ps. | 46,953,205 | (Ps. | 82,357,982 | ) | |||||
Charges to operations not requiring the use of funds: | ||||||||||||||||
Depreciation and amortization | 6,680,506 | 72,591,718 | 65,672,189 | 56,995,357 | ||||||||||||
Reserve for labor obligations cost | 7,850,662 | 85,306,866 | 74,493,349 | 63,787,616 | ||||||||||||
Profit sharing in non-consolidated subsidiaries and affiliates | 510,302 | 5,545,054 | 10,073,577 | 8,658,665 | ||||||||||||
Deferred taxes | 177,417 | 1,927,847 | 904,162 | 2,135,247 | ||||||||||||
Impairment on fixed assets | — | — | 703,247 | 1,432,691 | ||||||||||||
13,534,070 | 147,063,916 | 198,799,729 | 50,651,594 | |||||||||||||
Funds generated (used) in operation activities: | ||||||||||||||||
Accounts, notes receivable and other | (1,320,373 | ) | (14,347,438 | ) | (37,177,837 | ) | 9,930,406 | |||||||||
Inventories | (1,155,331 | ) | (12,554,059 | ) | (2,678,038 | ) | (6,527,714 | ) | ||||||||
Intangible asset derived from the actuarial computation of labor obligations | — | — | 23,316,114 | (14,672,035 | ) | |||||||||||
Other assets | 126,403 | 1,373,515 | (576,898 | ) | — | |||||||||||
Suppliers | (180,803 | ) | (1,964,639 | ) | 3,676,529 | 6,291,447 | ||||||||||
Accounts payable and accrued expenses | 365,779 | 3,974,633 | 3,382,644 | (14,317,686 | ) | |||||||||||
Taxes payable | 9,348,872 | 101,586,711 | (26,857,283 | ) | 24,181,434 | |||||||||||
Reserve for sundry creditors and others | (4,217 | ) | (45,820 | ) | 3,744,807 | (1,203,805 | ) | |||||||||
Derivative financial instruments | (747,287 | ) | (8,120,165 | ) | (2,541,921 | ) | 16,798,338 | |||||||||
Funds provided by operating activities | 19,967,113 | 216,966,654 | 163,087,846 | 71,131,979 | ||||||||||||
Financing activities: | ||||||||||||||||
Minimum guaranteed dividends paid to the Mexican Government | (24,234 | ) | (263,329 | ) | (16,392,606 | ) | (11,482,869 | ) | ||||||||
(Decrease) Increase in Debt — Net | (8,267,556 | ) | (89,836,920 | ) | 10,202,873 | 65,892,138 | ||||||||||
Increase in equity of Subsidiary Entities | 1,027,114 | 11,160,824 | 48,727,912 | 48,157,553 | ||||||||||||
Retirement, seniority premiums and other post-retirement benefits payments | (2,550,779 | ) | (27,717,270 | ) | (17,042,349 | ) | — | |||||||||
Sale of future accounts receivable | — | — | — | (40,871,801 | ) | |||||||||||
Funds (used in) provided by financing activities | (9,815,455 | ) | (106,656,695 | ) | 25,495,830 | 61,695,021 | ||||||||||
Investing activities: | ||||||||||||||||
Investment in shares | (538,133 | ) | (5,847,462 | ) | (14,153,450 | ) | (7,485,420 | ) | ||||||||
Increase in fixed assets — Net | (11,893,920 | ) | (129,241,714 | ) | (109,103,789 | ) | (89,577,399 | ) | ||||||||
Funds used in investing activities | (12,432,053 | ) | (135,089,176 | ) | (123,257,239 | ) | (97,062,819 | ) | ||||||||
Net (decrease) increase in cash and cash equivalents | (2,280,395 | ) | (24,779,217 | ) | 65,326,437 | 35,764,181 | ||||||||||
Cash and cash equivalents at beginning of the year | 18,017,012 | 195,776,457 | 130,450,020 | 94,685,839 | ||||||||||||
Cash and cash equivalents at end of the year | U.S.$ | 15,736,617 | Ps. | 170,997,240 | Ps. | 195,776,457 | Ps. | 130,450,020 | ||||||||
F-7
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
NOTE 1 — | APPROVAL: |
F-8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
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, 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-9
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
NOTE 3 — | SIGNIFICANT ACCOUNTING POLICIES: |
a. | Effects of inflation on the financial information |
Inflation | ||||||||
December 31, | NCPI | for the Year | ||||||
2007 | 125.5640 | 3.76 | % | |||||
2006 | 121.0150 | 4.05 | % | |||||
2005 | 116.3010 | 3.33 | % |
b. | Consolidation |
F-10
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
c. | Long-term productive infrastructure projects (PIDIREGAS) |
d. | Exploration and drilling costs and specific oil-field exploration and depletion reserve |
F-11
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
e. | Reserve for abandonment cost of wells |
f. | Cash and cash equivalents |
g. | Inventory and cost of sales |
I. | Crude oil and its derivatives for export: at realizable value, determined on the basis of average export prices at year end. | |
II. | Crude oil, natural gas and their derivatives for domestic sale: at realizable value, in accordance with international market prices at year end. | |
III. | The refined products inventories: at their acquisition or production cost calculated in accordance with crude oil costs and auxiliary materials. | |
IV. | Gas and petrochemicals: at direct standard cost of such products without exceeding their market value. | |
V. | Materials spare parts fittings: at the last purchase price without exceeding their market value. | |
VI. | Materials in transit: at acquisition cost. |
h. | Investment in shares of non-consolidated subsidiary companies affiliates companies |
F-12
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
i. | Properties, plant and equipment |
% | Years | |||
Buildings | 3 | 33 | ||
Plants and drilling equipment | 3-5 | 20-33 | ||
Furniture and fixtures | 10-25 | 4-10 | ||
Offshore platforms | 4 | 25 | ||
Transportation equipment | 4-20 | 5-25 | ||
Pipelines | 4 | 25 | ||
Software/computers | 10-25 | 4-10 |
F-13
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
j. | Impairment of the value of long-lived assets |
k. | Accruals |
l. | Labor obligations |
m. | Derivative financial instruments and hedging operations |
F-14
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
n. | Financial instruments with characteristics of liability, equity or both |
o. | Restatement of equity, other contributions and retained earnings |
p. | Cumulative effect of the Hydrocarbon tax |
q. | Surplus in the restatement of equity |
r. | Taxes and federal duties |
s. | Special Tax on Production and Services (IEPS Tax) |
t. | Revenue recognition |
u. | Comprehensive result |
F-15
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
v. | Comprehensive financing result |
w. | Contingencies |
x. | Deferred taxes |
y. | Accounting changes |
F-16
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
z. | Convenience translation |
F-17
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
NOTE 4 — | FOREIGN CURRENCY EXPOSURE: |
Amounts in foreign currency | ||||||||||||||||||||
(Thousands) | ||||||||||||||||||||
Net liability | Year-end | Amounts in | ||||||||||||||||||
Assets | Liabilities | position | Exchange rate | pesos | ||||||||||||||||
2007: | ||||||||||||||||||||
U.S. dollars | 16,950,060 | (30,083,877 | ) | (13,133,817 | ) | 10.8662 | ( | Ps.142,714,682 | ) | |||||||||||
Japanese yen | — | (142,217,370 | ) | (142,217,370 | ) | 0.0973 | (13,837,750 | ) | ||||||||||||
Pounds sterling | 230 | (402,411 | ) | (402,181 | ) | 21.6074 | (8,690,086 | ) | ||||||||||||
Euros | 9,371 | (5,932,198 | ) | (5,922,827 | ) | 15.8766 | (94,034,355 | ) | ||||||||||||
Swiss francs | — | (260 | ) | (260 | ) | 9.5957 | (2,495 | ) | ||||||||||||
Currency Danish crowns | — | (250 | ) | (250 | ) | 2.0075 | (502 | ) | ||||||||||||
Total liability position, before foreign currency hedging | ( | Ps.259,279,870 | ) | |||||||||||||||||
Amounts in foreign currency | ||||||||||||||||||||
(Thousands) | Year-end | |||||||||||||||||||
Net liability | Exchange | Amounts | ||||||||||||||||||
Assets | Liabilities | position | rate | in nominal pesos | ||||||||||||||||
2006:(1) | ||||||||||||||||||||
U.S. dollars | 20,872,208 | (46,944,810 | ) | (26,072,603 | ) | 10.8810 | ( | Ps.283,695,982 | ) | |||||||||||
Japanese yen | — | (150,040,948 | ) | (150,040,948 | ) | 0.0913 | (13,698,739 | ) | ||||||||||||
Pounds sterling | 711 | (401,812 | ) | (401,101 | ) | 21.3061 | (8,545,898 | ) | ||||||||||||
Euros | 23,635 | (4,201,854 | ) | (4,178,219 | ) | 14.3248 | (59,852,152 | ) | ||||||||||||
Swiss francs | 562,443 | (443,338 | ) | 119,105 | 8.9064 | 1,060,797 | ||||||||||||||
Total liability position, before foreign currency hedging | ( | Ps.364,731,974 | ) | |||||||||||||||||
(1) | The figures of December 31, 2006 in pesos are stated in thousands of Mexican pesos as of December 31, 2006 purchasing power (nominal value). Furthermore, as of December 31, 2007 and 2006, PEMEX had foreign exchange hedging instruments, which are discussed in Note 11. |
NOTE 5 — | CASH AND CASH EQUIVALENTS: |
2007 | 2006 | |||||||
Cash on hand and in banks | Ps. | 64,578,352 | Ps. | 95,760,432 | ||||
Marketable securities | 106,418,888 | 100,016,025 | ||||||
Ps. | 170,997,240 | Ps. | 195,776,457 | |||||
F-18
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
NOTE 6 — | ACCOUNTS, NOTES RECEIVABLE AND OTHER: |
2007 | 2006 | |||||||
Domestic customers | Ps. | 40,506,098 | Ps. | 34,729,334 | ||||
Export customers | 25,430,178 | 19,625,463 | ||||||
Negative IEPS Tax pending to be credited (Note 18) | 32,943,613 | 13,372,968 | ||||||
Advance payments to Mexican Government of minimum guaranteed dividends (Note 14) | 4,270,225 | 268,990 | ||||||
Specific funds (Note 14) | 11,858,575 | 35,589,790 | ||||||
Employees and officers | 3,648,372 | 3,174,902 | ||||||
Tax credits | 4,035,632 | 1,505,183 | ||||||
Other accounts receivable | 30,308,784 | 31,570,645 | ||||||
153,001,477 | 139,837,275 | |||||||
Less allowance for doubtful accounts | (1,490,934 | ) | (2,674,170 | ) | ||||
Ps. | 151,510,543 | Ps. | 137,163,105 | |||||
NOTE 7 — | INVENTORIES: |
2007 | 2006 | |||||||
Crude oil, refined products, derivatives and petrochemical products | Ps. | 87,971,050 | Ps. | 56,796,075 | ||||
Materials and supplies in stock | 6,370,017 | 6,673,156 | ||||||
Materials and products in transit | 148,376 | 300,123 | ||||||
94,489,443 | 63,769,354 | |||||||
Less allowance for slow-moving and obsolete inventory | (1,346,307 | ) | (1,705,556 | ) | ||||
Ps. | 93,143,136 | Ps. | 62,063,798 | |||||
F-19
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
NOTE 8 — | INVESTMENT IN SHARES OF NON-CONSOLIDATED SUBSIDIARIES AND ASOCCIATED: |
Percentage of | Carrying Value at December 31, | |||||||||||
Subsidiaries and Affiliates Shares: | Investment | 2007 | 2006 | |||||||||
Repsol YPF, S.A.(1) | 5.00 | % | Ps. | 23,146,258 | Ps. | 23,192,819 | ||||||
Deer Park Refining Limited(2) | 50.00 | % | 7,113,824 | 5,924,890 | ||||||||
Instalaciones Inmobiliarias para Industrias, S.A. de C.V. | 100.00 | % | 1,122,215 | 1,110,643 | ||||||||
Servicios Aéreos Especializados Mexicanos, S.A. de C.V. | 49.00 | % | 5,147 | 5,147 | ||||||||
Other-net | 1,675,910 | 2,527,447 | ||||||||||
Total investments | Ps. | 33,063,354 | Ps. | 32,760,946 | ||||||||
For the Year Ended December 31, | ||||||||||||
Profit Sharing in Non-Subsidiaries and Affiliates: | 2007 | 2006 | 2005 | |||||||||
Repsol YPF, S.A.(1) | Ps. | 588,729 | Ps. | 3,621,872 | Ps. | 2,610,657 | ||||||
Deer Park Refining Limited(2) | 4,944,329 | 6,419,178 | 6,004,199 | |||||||||
Instalaciones Inmobiliarias para Industrias, S.A. de C.V. | 11,996 | 32,527 | 43,809 | |||||||||
Total profit sharing | Ps. | 5,545,054 | Ps. | 10,073,577 | Ps. | 8,658,665 | ||||||
(1) | PEMEX owned 59,884,453 and 59,404,128 shares of Repsol YPF, S.A. at December 31, 2007 and 2006, respectively. | |
(2) | PMI NASA has a 50% joint venture with Shell Oil Company, through which it owns a 50% interest in a petroleum refinery located in Deer Park, Texas. The investment is accounted for under the equity method. During 2007, 2006 and 2005, PEMEX recorded Ps. 4,944,329, Ps. 6,419,178 and Ps. 6,004,199 of profits, respectively, related to its equity in the results of the joint venture, which has been recorded under “profit sharing in non-consolidated subsidiaries and affiliates” in the statement of operations. In 2006 and 2005, PEMEX paid the joint venture Ps. 11,078,973 and Ps. 10,742,295, respectively, for the processing of crude oil. As of December 31, 2006 the contract between PMI NASA and Pemex-Refining, was concluded and it was not renewed. |
F-20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
NOTE 9 — | PROPERTIES, PLANT AND EQUIPMENT: |
2007 | 2006 | |||||||
Plants | Ps. | 379,268,733 | Ps. | 357,366,268 | ||||
Pipelines | 296,304,941 | 278,873,434 | ||||||
Wells | 466,157,259 | 412,518,087 | ||||||
Drilling equipment | 22,226,019 | 22,363,980 | ||||||
Buildings | 47,681,968 | 42,210,278 | ||||||
Offshore platforms | 160,543,843 | 139,223,391 | ||||||
Furniture and equipment | 36,440,294 | 34,809,700 | ||||||
Transportation equipment | 14,146,501 | 14,008,239 | ||||||
1,422,769,558 | 1,301,373,377 | |||||||
Less: | ||||||||
Accumulated depreciation and amortization | (760,177,709 | ) | (693,295,137 | ) | ||||
Net value | 662,591,849 | 608,078,240 | ||||||
Land | 39,842,669 | 42,164,885 | ||||||
Construction in progress | 90,720,481 | 86,150,194 | ||||||
Fixed assets to be disposed of | 690,454 | 802,138 | ||||||
Total | Ps. | 793,845,453 | Ps. | 737,195,457 | ||||
a) | PEMEX capitalized interest associated with the construction or installation of property, plant and equipment, totaling Ps. 6,996,305 and Ps. 5,541,036, as of December 31, 2007 and 2006, respectively. Starting in 2007, as part of the adoption of NIF-6, PEMEX capitalized Ps 5,350,849 of comprehensive financing costs related to qualified fixed assets, as these costs were directly related to investments during the acquisition phase of a project. | |
b) | Total depreciation of fixed assets and amortization of wells for the years ended December 31, 2007, 2006 and 2005 were Ps. 72,591,718, Ps. 65,672,189 and Ps.56,995,357, respectively, which includes amortization costs related to dismantlement and abandonment cost for the years ended December 31, 2007, 2006 and 2005 of Ps. 2,554,062, Ps. 508,361 and Ps. 1,370,730, respectively. | |
c) | As of December 31, 2007 and 2006, the capitalized portion related to dismantlement and abandonment costs, net of accumulated amortization, and determined based on the present value (discounted) of the project cost, was Ps. 17,148,400 and Ps. 16,027,307, respectively. | |
d) | During 2007 PEMEX performed its impairment review of the value of long-live assets and concluded that there was no impairment for the year. As of December 31, 2006 and 2005, PEMEX recognized cumulative impairment charges in the value of the long-lived assets amounting to Ps. 14,593,955 and Ps. 13,890,780, respectively. (see Note 3j.). |
NOTE 10 — | DEBT: |
F-21
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
a. | The Master Trust obtained credit lines from export credit agencies totaling U.S.$1,002,629. | |
b. | During the second quarter of 2007, the Master Trust repurchased, in the open market certain amount of its outstanding U.S. dollar-denominated debt securities with maturities between 2008 and 2027. The total principal amount repurchased in this program was equal to U.S.$1,139,696. These securities were cancelled after their repurchase. | |
c. | On October 18, 2007, the Master Trust utilized the full amount of its syndicated revolving credit facility in the amount of U.S.$2,500,000. This credit line was signed on September 14, 2007; it may be used either by Petróleos Mexicanos or the Master Trust; the credit line consists of two tranches, A and B, with terms of three and five years, respectively and bears interest at rates of LIBOR plus 20 basis points for tranche A and 25 basis points for tranche B; and matures in 2010 and 2012, respectively; and each of the tranches may be extended twice, by one year. This credit line replaces the two previously syndicated revolving credit lines, each in the amount of U.S.$1,250,000. | |
d. | On October 22, 2007, the Master Trust issued notes for the amount of U.S.$2,000,000, of which U.S.$1,500,000 notes were issued at a coupon rate of 5.75% due in 2018 and U.S.$500,000 bonds at a coupon rate of 6.625%, due in 2035. This issuance was a second reopening of an issuance which took place on June 8, 2005. |
e. | During the fourth quarter of 2007, the Master Trust repurchased in the open market U.S.$5,763,333, of notes, which represent a part of its own debt in notes with maturities between 2008 and 2027, as well as certain amount of its U.S. dollar-denominated perpetual notes. These securities were cancelled after their repurchase. |
a. | Petróleos Mexicanos obtained credit lines from export credit agencies totaling U.S.$56,241. 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 of 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.$185,310 in exchange for an equal principal amount of notes previously issued by Petróleos Mexicanos, through a reopening of an original exchange offer made in December 2004. As a result of this second exchange, the Master |
F-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
Trust issued new notes and subsequently received cash payments from Petróleos Mexicanos upon the cancellation of the Petróleos Mexicanos notes acquired by the Master Trust. |
June 1, 2006 | U.S.$ | 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 and U.S.$4,250,000 by refinancing a syndicated loan in two tranches of U.S.$1,500,000 and U.S.$2,750,000 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 in 2015, and U.S.$750,000 of 6.625% Notes due in 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. |
• | 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. |
F-23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
December 31, 2007 | December 31, 2006 | |||||||||||||||||||||
Foreign | Foreign | |||||||||||||||||||||
Pesos | currency | Pesos | currency | |||||||||||||||||||
Rate of Interest(2) | Maturity | (Thousands) | (Thousands) | (Thousands) | (Thousands) | |||||||||||||||||
U.S. dollars: | ||||||||||||||||||||||
Bonds | Fixed from 4.75% to 9.5% and LIBOR plus 0.425% to 1.8% | Various to 2035 | Ps. | 163,225,526 | 12,119,761 | Ps. | 238,931,860 | 21,163,109 | ||||||||||||||
Financing assigned to PIDIREGAS | Fixed from 3.23% to 7.69% and LIBOR plus 0.02% to 2.25% | Various to 2017 | 72,163,251 | 6,641,075 | 76,624,927 | 6,786,963 | ||||||||||||||||
Purchasing loans and project financing | Fixed from 3.32% to 5.04% and LIBOR plus 0.0625% to 2% | Various to 2014 | 2,108,662 | 194,057 | 3,229,236 | 286,026 | ||||||||||||||||
Leasing contracts | Fixed from 8.05% to 9.91% | Various to 2012 | — | — | 793,645 | 70,296 | ||||||||||||||||
Credit lines | LIBOR plus 0.20% and 0.25% | Various to 2023 | 27,165,500 | 2,500,000 | — | — | ||||||||||||||||
External trade loans | LIBOR plus 0.325% to 0.475% | Various to 2013 | 46,181,350 | 4,250,000 | 48,659,972 | 4,310,000 | ||||||||||||||||
Bank loans | Fixed from 5.44% to 5.58% and LIBOR plus 0.7% to 1.9% | Various to 2013 | 5,107,114 | 470,000 | 7,056,260 | 625,000 | ||||||||||||||||
Total financing in U.S. dollars | 315,951,403 | 26,174,893 | 375,295,900 | 33,241,394 | ||||||||||||||||||
Euros: | ||||||||||||||||||||||
Bonds | Fixed from 5.5% to 6.62%, and floating of 8.21467% | Various to 2025 | 50,857,376 | 3,203,291 | 60,800,196 | 4,090,634 | ||||||||||||||||
Unsecured loans, banks and project financing | Fixed from 2% | 2016 | 5,544 | 349 | 5,977 | 402 | ||||||||||||||||
Total financing in Euros | 50,862,920 | 3,203,640 | 60,806,173 | 4,091,036 | ||||||||||||||||||
Japanese yen: | ||||||||||||||||||||||
Direct loans | Fixed from 4.2% | 2009 | 468,081 | 4,810,695 | 683,590 | 7,216,043 | ||||||||||||||||
Bonds | Fixed from 3.5% | 2023 | 2,919,000 | 30,000,000 | 2,841,959 | 30,000,000 | ||||||||||||||||
Project financing | Prime 2.9081% and Fixed from 1% to 2.4% | Various to 2017 | 10,871,232 | 111,729,003 | 9,772,409 | 103,158,512 | ||||||||||||||||
Total financing in Yen | 14,258,313 | 146,539,698 | 13,297,958 | 140,374,555 | ||||||||||||||||||
Sterling pound: | ||||||||||||||||||||||
Bonds | Fixed 7.5% | 2013 | 8,642,960 | 400,000 | 8,842,798 | Various | ||||||||||||||||
Pesos: | ||||||||||||||||||||||
Certificates | TIIE less 0.07% and CETES plus 0.35% to 0.65% | Various to 2019 | 81,918,416 | 98,019,896 | ||||||||||||||||||
Syndicated bank loans | TIIE plus 0.35% and fixed from 8.4% | 2008 | 3,500,000 | 7,263,130 | ||||||||||||||||||
Project financing and syndicated bank loans | Fixed from 11% and TIIE plus 0.4% to 0.48% | Various to 2012 | 12,333,333 | 14,872,123 | ||||||||||||||||||
Total financing in pesos | 97,751,749 | 120,155,149 | ||||||||||||||||||||
Total principal in pesos(1) | 487,467,345 | 578,397,978 | ||||||||||||||||||||
Plus: Accrued interest | 58,565 | 1,563,831 | ||||||||||||||||||||
Notes payable to contractors | 13,352,690 | 10,753,711 | ||||||||||||||||||||
Total principal and interest | 500,878,600 | 590,715,520 | ||||||||||||||||||||
Less: Short-term maturities | 71,499,353 | 62,745,288 | ||||||||||||||||||||
Current portion of notes payable to contractors | 4,550,775 | 3,494,990 | ||||||||||||||||||||
Total short-term debt | 76,050,128 | 66,240,278 | ||||||||||||||||||||
Long-term debt | Ps. | 424,828,472 | Ps. | 524,475,242 | ||||||||||||||||||
2013 and | ||||||||||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | Thereafter | Total | ||||||||||||||||||||||
Maturity of the principal outstanding for each of the years ending December 31, | Ps. | 76,050,128 | Ps. | 67,453,662 | Ps. | 70,150,790 | Ps. | 56,261,413 | Ps. | 38,928,853 | Ps. | 192,033,754 | Ps. | 500,878,600 | ||||||||||||||
(1) | Includes financing from foreign banks of Ps. 355,682,481 and Ps. 418,347,126 as of December 31, 2007 and 2006, respectively. | |
(2) | As of December 31, 2007 and 2006 the rates were as follows: LIBOR, 4.59625% and 5.37%, respectively; the Prime rate in Japanese yen, 1.875% and 1.625%, respectively; theCetesrate, 7.62% for 91 days and 7.71% for 182 days and 7.17% for 91 days and 7.20% for 182 days, respectively; TIIE 7.37% and 8.95%, respectively. |
F-24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | |||||||
Total notes payable to contractors(1)(2)(3)(4) | Ps. | 13,352,690 | Ps. | 10,753,711 | ||||
Less: Current portion of notes payable to contractors | 4,550,775 | 3,494,990 | ||||||
Notes payable to contractors (long-term) | Ps. | 8,801,915 | Ps. | 7,258,721 | ||||
(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 , plus a financing cost of U.S.$805,648 , due in twenty semi-annual payments of U.S.$121,200. The original amount of the unit-price public works contract was U.S.$80,000, including a financing cost of U.S.$47,600 payable monthly based on the percentage of completion. At December 31, 2007 and 2006, the outstanding balances of the respective contracts were Ps. 5,854,295 and Ps. 8,186,797, 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, 2007 and 2006, the outstanding balances were Ps. 242,888 and Ps. 531,296, 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, 2007 and 2006, PEMEX has an outstanding payable amount of Ps. 3,228,735 and Ps. 2,035,618, respectively. | |
(4) | During 2007, a Floating Production Storage and Offloading (“FPSO”) vessel was purchased. The investment in the vessel totaled U.S.$723,575, of which U.S.$352,996 were paid in 2007 and the remaining amount of U.S.$370,579 (Ps.4,026,772) as of December 31, 2007, will be paid over a period of 15 years. |
NOTE 11 — | FINANCIAL INSTRUMENTS: |
(i) | Counterparty risk from the use of derivative financial instruments |
F-25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(ii) | Interest rate risk management |
(iii) | Exchange rate risk management |
(iv) | Commodity price risk management |
(v) | Fair value of derivative financial instruments |
F-26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
• | The fair value for interest rate, exchange rate and hydrocarbon derivative instruments is determined by discounting future cash flows as of the balance sheet date, using market quotations for the instrument’s remaining life. | |
• | Prices for options are calculated using standard option-pricing models commonly used in the international financial market. | |
• | Exchange-traded energy futures contracts are valued individually at daily settlement prices quoted on the futures markets. |
(vi) | Embedded derivatives |
(vii) | Operations with derivative financial instruments |
F-27
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | |||||||||||||||
Notional Value | Fair Value | Notional Value | Fair Value | |||||||||||||
Interest rate swaps: | ||||||||||||||||
Pay fixed/receive variable | Ps. | 14,211,489 | (Ps. | 1,267,432 | ) | Ps. | 17,741,995 | (Ps. | 1,877,925 | ) | ||||||
Cross-currency swaps: | ||||||||||||||||
Pay Mexican Peso/receive UDI | Ps. | 11,901,650 | Ps. | 221,101 | Ps. | — | Ps. | — | ||||||||
F-28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | |||||||||||||||
Notional Value | Fair Value | Notional Value | Fair Value | |||||||||||||
Interest rate swaps pay fixed/receive variable | Ps. | 5,000,000 | (Ps. | 185,719 | ) | Ps. | 5,187,950 | (Ps. | 381,586 | ) | ||||||
Cross-currency swaps: | ||||||||||||||||
Pay U.S. Dollar/receive Euros | 44,730,188 | 3,549,308 | 59,713,915 | 1,796,741 | ||||||||||||
Pay U.S. Dollar/receive Japanese Yen | 13,549,835 | (355,956 | ) | 13,310,235 | (968,825 | ) | ||||||||||
Pay U.S. Dollar/receive Ponds Sterling | 7,417,159 | 1,120,775 | 7,706,453 | 1,294,656 | ||||||||||||
Natural gas swaps: | ||||||||||||||||
Pay fixed/receive variable | Ps. | 5,163,787 | Ps. | 202 | Ps. | 5,683,033 | Ps. | 11,916,029 | ||||||||
Pay variable/receive fixed | 5,185,476 | 16,882 | 6,668,063 | (11,883,888 | ) | |||||||||||
Pay variable/receive variable | 472 | 470 | 2,493 | (3,747 | ) | |||||||||||
Natural gas options: | ||||||||||||||||
Put | ||||||||||||||||
Purchase | Ps. | 73,261 | Ps. | 31,953 | ||||||||||||
Sale | (74,064 | ) | 384 | |||||||||||||
Call | ||||||||||||||||
Purchase | 361,510 | 117,280 | ||||||||||||||
Sale | (361,300 | ) | (116,576 | ) | ||||||||||||
F-29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Assets: | ||||||||||||||||
Cash and cash equivalents | Ps. | 170,997,240 | Ps. | 170,997,240 | Ps. | 195,776,457 | Ps. | 195,776,457 | ||||||||
Accounts receivable, notes and other | 151,510,543 | 151,510,543 | 137,163,105 | 137,163,105 | ||||||||||||
Derivative financial instruments | 12,909,868 | 12,909,868 | 4,389,836 | 4,389,836 | ||||||||||||
Liabilities: | ||||||||||||||||
Suppliers | 35,138,344 | 35,138,344 | 37,102,983 | 37,102,983 | ||||||||||||
Accounts and accumulated expenses payable | 18,097,530 | 18,097,530 | 14,592,081 | 14,592,081 | ||||||||||||
Taxes payable | 146,593,355 | 146,593,355 | 45,006,644 | 45,006,644 | ||||||||||||
Derivative financial instruments | 13,584,495 | 13,584,495 | 13,372,143 | 13,372,143 | ||||||||||||
Current portion of long-term debt | 76,050,128 | 76,050,128 | 66,240,278 | 66,240,278 | ||||||||||||
Long-term debt | 424,828,472 | 442,731,344 | 524,475,242 | 556,153,282 | ||||||||||||
NOTE 12 — | LABOR OBLIGATIONS: |
F-30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
Retirement remunerations, seniority premiums, pension and indemnity | Other post-retirement Benefits | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Contribution to the pension plan assets | Ps. | 19,357,177 | Ps. | 13,221,734 | Ps. | 5,750,386 | Ps. | 5,207,690 | ||||||||
Payments charged to the plan assets | 13,449,831 | 11,839,880 | 5,750,386 | 5,207,690 | ||||||||||||
Retirement remunerations, seniority | ||||||||||||||||||||||||
premiums, pension and indemnity | Other post-retirement benefits | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||
Net periodic cost: | ||||||||||||||||||||||||
Service cost | Ps. | 9,167,594 | Ps. | 7,507,356 | Ps. | 6,513,609 | Ps. | 6,405,902 | Ps. | 5,881,745 | Ps. | 4,163,849 | ||||||||||||
Financial cost | 27,246,555 | 24,571,208 | 20,983,951 | 21,795,906 | 18,562,492 | 15,479,140 | ||||||||||||||||||
Return on plan assets | (26,007 | ) | (51,860 | ) | (185,989 | ) | — | — | ||||||||||||||||
Amortization of prior services cost and plan amendments | 677,353 | 663,036 | 364,519 | 4,483,931 | 4,447,357 | 4,478,314 | ||||||||||||||||||
Variances in assumptions and experience adjustments | 1,319,028 | 671,355 | (168,555 | ) | (1,352,970 | ) | (3,131,317 | ) | (3,811,680 | ) | ||||||||||||||
Amortization of transition liability | 6,133,654 | 6,114,252 | 6,157,546 | 6,407,047 | 6,357,929 | 6,402,163 | ||||||||||||||||||
Inflation adjustment | 1,650,858 | 1,598,629 | 1,118,730 | 1,398,004 | 1,301,166 | 889,879 | ||||||||||||||||||
Total periodic cost | 46,169,035 | 41,073,976 | 34,783,811 | 39,137,820 | 33,419,372 | 27,601,665 | ||||||||||||||||||
Recognition of severance payments | — | — | 1,402,142 | — | — | — | ||||||||||||||||||
Net periodic cost | Ps. | 46,169,035 | Ps. | 41,073,976 | Ps. | 36,185,953 | Ps. | 39,137,820 | Ps. | 33,419,372 | Ps. | 27,601,665 | ||||||||||||
F-31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
Retirement remunerations, seniority | ||||||||||||||||
premiums, pension and indemnity | Other post-retirement benefits | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Vested benefit obligation value: | ||||||||||||||||
Vested benefit obligation | Ps. | 206,364,293 | Ps. | 191,557,538 | Ps. | — | Ps. | — | ||||||||
Accumulated benefit obligation (ABO)/ obligation | Ps. | 357,768,687 | Ps. | 330,616,544 | Ps. | — | Ps. | — | ||||||||
Projected benefit obligation (PBO)/ | Ps. | 367,485,744 | Ps. | 336,758,891 | Ps. | 300,396,198 | 266,481,493 | |||||||||
Plan assets at fair value | (7,664,407 | ) | (2,118,402 | ) | — | — | ||||||||||
Projected benefit obligation over plan assets | 359,821,337 | 334,640,489 | 300,396,198 | 266,481,493 | ||||||||||||
Items to be amortized: | ||||||||||||||||
Prior services cost and plan amendments | (6,449,919 | ) | (7,080,185 | ) | (58,102,534 | ) | (62,590,753 | ) | ||||||||
Variances in assumptions and experience adjustments | (54,196,339 | ) | (49,016,755 | ) | 743,034 | 14,811,311 | ||||||||||
Unamortized transition liability | (66,631,947 | ) | (72,807,858 | ) | (71,146,932 | ) | (77,594,439 | ) | ||||||||
Project liability net | 232,543,132 | 205,735,691 | 171,889,766 | 141,107,612 | ||||||||||||
Additional liability | 123,768,374 | 124,821,880 | — | — | ||||||||||||
Total liability | Ps. | 356,311,506 | Ps. | 330,557,571 | Ps. | 171,889,766 | Ps. | 141,107,612 | ||||||||
Retirement remunerations, seniority premiums, | ||||||||
pension and indemnity | Other post-retirement benefits | |||||||
2007 | 2006 | 2007 | 2006 | |||||
Discount rate | 4.25% | 4.25% | 4.25% | 4.25% | ||||
Rate of compensation increase | 0.50% | 0.50% | 0.50% | 0.50% | ||||
Expected long term rate of the return on plan assets | 4.25% | 4.25% | — | — | ||||
Employees’ average remaining labor life over which pending amortization items are amortized | 11 years | 12 years | 11 years | 12 years |
F-32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
Retirement remunerations, | ||||||||||||||||
seniority premiums, | ||||||||||||||||
pension and indemnity | Other post-retirement benefits | |||||||||||||||
Type of Investment | 2007 | 2006 | 2007 | 2006 | ||||||||||||
Governmental securities | 84.2 | % | 71.0 | % | 84.2 | % | 71.0 | % | ||||||||
Fixed rate securities | 15.8 | % | 29.0 | % | 15.8 | % | 29.0 | % | ||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
NOTE 13 — | COMPREHENSIVE (LOSS) INCOME: |
2007 | 2006 | 2005 | ||||||||||
Net (loss) income | (Ps. | 18,307,569 | ) | Ps. | 46,953,205 | (Ps. | 82,357,982 | ) | ||||
Surplus in restatement of equity | 18,638,402 | 4,064,648 | 8,184,288 | |||||||||
Derivative financial instruments | 656,699 | 5,274,109 | (7,036,437 | ) | ||||||||
Effect on equity from labor obligations | (3,432,792 | ) | (18,871,922 | ) | (21,672,659 | ) | ||||||
Other | — | 710,094 | — | |||||||||
Comprehensive (loss) income for the year | (Ps. | 2,445,260 | ) | Ps. | 38,130,134 | (Ps. | 102,882,790 | ) | ||||
NOTE 14 — | EQUITY: |
Amount | ||||
Certificates of Contribution “A” (nominal value) | Ps. | 10,222,463 | ||
Inflation restatement increase | 86,735,530 | |||
Certificates of Contribution “A” in Mexican pesos of December 31, 2007 purchasing power | Ps. | 96,957,993 | ||
F-33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
NOTE 15 — | COMMITMENTS: |
F-34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2008 | U.S. $ | 25,267 | ||
2009 | 25,267 | |||
2010 | 25,267 | |||
2011 | 25,267 | |||
2012 | 25,267 | |||
2013 and thereafter | 244,244 | |||
Total | U.S. $ | 370,579 | ||
b. | PEMEX has entered into a nitrogen supply contract for the pressure maintenance program at the Cantarell field. During 2007, an additional contract was incorporated, also with the purpose of supplying nitrogen to the Ku-Maloob-Zap field, extending the original contract until 2027. At December 31, 2007 and 2006, the value of the nitrogen to be supplied during the term of the contract was approximately Ps. 18,314,382 and Ps. 13,377,497, respectively. In the event of the annulment of the contract and depending on the circumstances, PEMEX has the right and obligation to acquiring the vendor’s nitrogen plant, under the terms of the contract. |
2008 | Ps. | 1,969,805 | ||
2009 | 1,695,836 | |||
2010 | 1,717,418 | |||
2011 | 1,721,866 | |||
2012 | 1,742,658 | |||
More than 5 years | 9,466,799 | |||
Total | Ps. | 18,314,382 | ||
c. | During 2003, 2004 and 2005, PEMEX entered into Financed Public Work Contracts (“FPWCs”) (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 FPWCs, which are classified into categories of development, infrastructure and maintenance. The estimated value of the FPWCs as of December 31, is as follows: |
Date of Contract | Block | 2007 | 2006 | |||||||
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 | |||||||
April 3, 2007 | Nejo | 911,509 | — | |||||||
April 20, 2007 | Monclava | 433,501 | — | |||||||
Total | U.S. $ | 7,232,096 | U.S. $ | 5,887,086 | ||||||
F-35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
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. |
NOTE 16 — | CONTINGENCIES: |
(a) | 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 of PEMEX’s larger operating, storage and transportation facilities have been or are being conducted. Following the completion of such audits, PEMEX has 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. |
(b) | As of December 31, 2007, PEMEX was involved in various civil, commercial, tax, criminal, administrative, labor and arbitration lawsuits. Based on the information available, the amount claimed in connection with these lawsuits totaled approximately Ps. 39,209,855. At December 31, 2007, PEMEX had accrued a reserve of Ps. 10,453,830 for these contingent liabilities. Among these lawsuits, are the following: |
i. | Pemex-Refining is a party to an arbitration proceeding (No. 11760/KGA) filed by CONPROCA, S.A. de C.V. (“CONPROCA”) before the International Chamber of Commerce, in which CONPROCA is seeking payment of U.S.$633,100 related to construction and maintenance services in the Cadereyta refinery. Pemex-Refining filed a counterclaim against CONPROCA in the amount of U.S.$907,000 (which includes the value added tax). |
ii. | In April 2004, 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. On September 28, 2007, a judgment was issued in favor of Pemex-Exploration and Production. The plaintiff filed an appeal against this judgment, which was denied on January 21, 2008. The plaintiff then filed a constitutional relief known asamparo, which is still pending. |
F-36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
iii. | In December 2003, Unión de Sistemas Industriales, S. A. filed a civil claim against Pemex-Refining (exp. 202/2003), seeking Ps. 393,095. The trial is in the evidentiary stages; expert evidence is still pending. | |
iv. | In December 2004, 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. |
v. | An arbitration proceeding before the ICA was filed by COMBISA, S. de R. L. de C. V. (“COMBISA”) 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 responded to the claim and filed a counterclaim against COMBISA. On July 23, 2007, a final award was granted, pursuant to which COMBISA was ordered to pay U.S.$4,600 and Pemex-Exploration and Production was ordered to pay U.S.$61,300 as well as financial expenses and the corresponding value added tax. Both parties requested an additional decision to clarify this final award on November 16, 2007. The FCA modified the award such that total amount owed to COMBISA was corrected and Pemex-Exploration and Production was ordered to pay U.S.$61,600 as well as financial expenses and the corresponding value added tax. The total amount owed to Pemex-Exploration and Production was ratified. |
vi. | COMMISA filed a claim before the ICA against Pemex-Exploration and Production (IPC-28) seeking approximately U.S.$142,400 and Ps. 40,199 for, among other things, the alleged breach of a contract (PEP-O-IT-136/08) related to two vessels, the Bar Protector and Castoro 10, both of which are located in the Cantarell complex. Pemex-Exploration and Production filed a counterclaim. On February 11, 2008, Pemex-Exploration and Production was notified of an award pursuant which Pemex-Exploration and Production was ordered to pay Ps. 10,928 and U.S.$75,075, plus the value added tax and U.S.$200 related to arbitration expenses. |
F-37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
vii. | 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 alleged breach of a tank truck transportation agreement. On March 7, 2008 a final hearing was held in which both parites filed their allegations. A final judgement is still pending. |
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. 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 vii above. On January 23, 2008, a final hearing was held in which both parites filed their allegations. A final judgement is still pending. | |
ix. | A civil claim was filed by Asociación de Transportistas al Servicio de Petróleos Mexicanos, Clientes o Empresas Sustitutos, A. C. against Pemex-Refining, (295/2007), seeking a judicial judgment declaring the breach of a services agreement dated March 26, 1993 and damages, among other expenses. |
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. for alleged violation of its mining concesions and for the excecution of development, infrastructure and manteinance works in non-associated gas fields under a public works contract (No. 414105826) and a modification of theLey Reglamentaria del Artículo 27 Constitucional en el Ramo del Petróleo(“Regulatory Law to Article 27 of the Political Constitution Concerning Petroleum Affairs”). The purpose of this contract was to explore non-associated gas in the same fields where the plaintiffs have their mining concessions. |
xi. | An arbitration proceeding before the ICA was 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, among other things, compliance with a transportation agreement and its amendments as agreed in February, 2001 and November, 2001. This agreement was executed for the operation of the Palmillas-Toluca pipeline. |
F-38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
xii. | In connection with the claims filed by a group of Congressmen from the LIXth Legislature against Pemex-Exploration and Production related to the Financed Public Works Contracts program (“FPWC”), as of the date of these financial statemets only one claim remains open since Pemex-Exploration and Production obtained a favorable judgement in the other similar claims filed by these plaintiffs. |
xiii. | In August 2007, a civil claim (12/2007) was filed by Leoba Rueda Nava against Petróleos Mexicanos and Pemex-Refining. This claim was presented to theJuzgado Decimocuarto de Distrito del Décimo Circuito(“Fourteenth District Court of the Tenth Circuit”) in Coatzacoalcos, Veracruz. Plainiffs seek, among other things, civil liability and damages resulting from the pollution of land used to store oil waste in accordance with an agreement entered into by and among Leoba Rueda Nava, Petróleos Mexicanos and Pemex-Refining. The trial is in the evidenciary stage. Judicial inspection, confesional and testimonial evidences have been filed. As of the date of these financial statemets expert opinions are still pending. |
xiv. | Administrative proceedings were initiated by the Federal Competition Commission (the “Commission”). On December 7, 2007, the Commission issued a resolution prohibiting Pemex-Refining from engaging in anti-competitive practices in trading and distributing greases and lubricants in service stations, without specifically requesting a modification or termination of a license agreement. Pemex-Refining filed anamparoagainst this resolution, which is still pending. |
xv. | Several claims have been filed by Impulsora Jalisciense, S. A. de C. V. and Mexicana de Lubricantes, S. A. de C. V. |
F-39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
xvi. | A civil claim (28/2007) was filed by Mexicana de Lubricantes, S. A. de C. V. against Pemex-Refining seeking, among other things, a judicial judgment declaring null and void any advance termination or cancellation of the following agreements executed between Mexicana de Lubricantes, S. A. de C. V. and Pemex-Refining: 1) License and Trademark contract; 2) Basic greases supply contract; and 3) Manufacture contract of lubricants and greases for Petróleos Mexicanos and the Subsidiary Entities. The claim was summoned and Pemex-Refining was required to file its response in April. |
NOTE 17 — | 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 Group, to international markets. Export sales are made through PMI Group to approximately 25 major customers in various foreign markets. Less than 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 important products are 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 from the sale of ethane and butane gas. | |
• | Pemex-Petrochemical is engaged in the sale of petrochemical products to the domestic market. Pemex-Petrochemicals offers a wide range of products that generate large revenues, the majority of which come from methane derivatives, ethane derivatives and aromatics and derivatives. |
F-40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
Corporate and | ||||||||||||||||||||||||||||
Exploration and | Gas and Basic | Subsidiary | Intersegment | |||||||||||||||||||||||||
Production | Refining | Petrochemicals | Petrochemicals | Companies | Eliminations | Total | ||||||||||||||||||||||
Year ended December 31, 2007 | ||||||||||||||||||||||||||||
Sales — | ||||||||||||||||||||||||||||
Trade | Ps. | - | Ps. | 430,382,930 | Ps. | 139,963,302 | Ps. | 21,701,729 | Ps. | 542,926,858 | Ps. | - | Ps. | 1,134,974,819 | ||||||||||||||
Intersegment | 912,295,482 | 42,229,528 | 82,940,711 | 35,942,074 | 247,993,773 | (1,321,401,568 | ) | — | ||||||||||||||||||||
Services income | — | — | — | — | 1,880,032 | (819,423 | ) | 1,060,609 | ||||||||||||||||||||
Total net sales | 912,295,482 | 472,612,458 | 222,904,013 | 57,643,803 | 792,800,663 | (1,322,220,991 | ) | 1,136,035,428 | ||||||||||||||||||||
Gross income | 740,811,644 | (81,024,508 | ) | 15,816,747 | (6,559,693 | ) | 41,180,144 | (34,854,648 | ) | 675,369,686 | ||||||||||||||||||
Operating income (loss) | 707,401,828 | (114,306,785 | ) | 7,335,910 | (14,115,424 | ) | 5,850,043 | (1,734,890 | ) | 590,430,682 | ||||||||||||||||||
Comprehensive financing cost | (25,561,647 | ) | (5,764,552 | ) | 1,071,281 | (1,181,167 | ) | 10,097,224 | 1,292,274 | (20,046,587 | ) | |||||||||||||||||
Net income (loss) | 19,966,387 | (45,653,619 | ) | 4,958,173 | (16,085,945 | ) | (11,473,248 | ) | 29,980,683 | (18,307,569 | ) | |||||||||||||||||
Depreciation and amortization | 57,262,960 | 10,159,674 | 3,437,370 | 1,091,848 | 639,866 | — | 72,591,718 | |||||||||||||||||||||
Labor cost reserve | 29,124,816 | 28,579,131 | 6,491,464 | 8,215,002 | 12,896,453 | — | 85,306,866 | |||||||||||||||||||||
Taxes and duties | 663,549,438 | 3,846,738 | 5,537,391 | 257,203 | 4,064,958 | — | 677,255,728 | |||||||||||||||||||||
Acquisition of fixed assets | 99,252,970 | 22,912,301 | 5,871,320 | 998,725 | 324,582 | — | 129,359,898 | |||||||||||||||||||||
Total assets | 1,237,968,403 | 417,393,498 | 133,970,702 | 79,872,062 | 2,331,376,672 | (2,870,300,731 | ) | 1,330,280,606 | ||||||||||||||||||||
Current assets | 630,760,334 | 229,536,695 | 85,311,492 | 58,650,943 | 495,164,854 | (1,070,863,531 | ) | 428,560,787 | ||||||||||||||||||||
Investments in shares | 342,538 | 157,094 | 1,095,666 | — | 612,696,004 | (581,227,948 | ) | 33,063,354 | ||||||||||||||||||||
Fixed assets | 565,433,958 | 162,585,821 | 42,005,574 | 15,569,956 | 8,250,144 | — | 793,845,453 | |||||||||||||||||||||
Current liabilities | 191,867,210 | 148,709,748 | 33,463,623 | 8,896,698 | 929,478,616 | (1,022,952,043 | ) | 289,463,852 | ||||||||||||||||||||
Labor reserve | 180,931,471 | 178,386,606 | 40,791,915 | 49,058,100 | 79,033,180 | — | 528,201,272 | |||||||||||||||||||||
Total liability | 998,713,758 | 377,308,387 | 85,452,634 | 59,275,500 | 2,262,119,197 | (2,502,496,731 | ) | 1,280,372,745 | ||||||||||||||||||||
Equity | 239,254,644 | 40,085,112 | 48,518,068 | 20,596,562 | 69,257,475 | (367,804,000 | ) | 49,907,861 | ||||||||||||||||||||
Year ended December 31, 2006 | ||||||||||||||||||||||||||||
Sales — | ||||||||||||||||||||||||||||
Trade | Ps. | - | Ps. | 406,963,236 | Ps. | 138,687,862 | Ps. | 21,638,776 | Ps. | 535,144,047 | Ps. | - | Ps. | 1,102,433,921 | ||||||||||||||
Intersegment | 890,012,141 | 46,242,429 | 83,058,212 | 9,654,394 | 171,981,054 | (1,200,948,230 | ) | — | ||||||||||||||||||||
Services income | — | — | — | — | 1,707,386 | (631,439 | ) | 1,075,947 | ||||||||||||||||||||
Total net sales | 890,012,141 | 453,205,665 | 221,746,074 | 31,293,170 | 708,832,487 | (1,201,579,669 | ) | 1,103,509,868 | ||||||||||||||||||||
Gross income | 718,463,139 | (52,193,884 | ) | 18,030,329 | (4,925,440 | ) | 31,717,998 | (25,840,484 | ) | 685,251,658 | ||||||||||||||||||
Operating income (loss) | 690,607,335 | (82,910,431 | ) | 10,720,768 | (11,854,541 | ) | (1,720,065 | ) | (565,837 | ) | 604,277,229 | |||||||||||||||||
Comprehensive financing cost | (24,174,018 | ) | (9,026,219 | ) | 1,134,603 | (4,173,330 | ) | 12,659,001 | (266,662 | ) | (23,846,625 | ) | ||||||||||||||||
Net income (loss) | 75,888,386 | (35,325,390 | ) | 6,311,661 | (18,029,704 | ) | 54,656,089 | (36,547,837 | ) | 46,953,205 | ||||||||||||||||||
Depreciation and amortization | 51,819,623 | 8,723,393 | 3,529,726 | 902,845 | 696,602 | — | 65,672,189 | |||||||||||||||||||||
Labor cost reserve | 25,562,500 | 24,775,200 | 5,637,100 | 6,972,400 | 11,546,149 | — | 74,493,349 | |||||||||||||||||||||
Taxes and duties | 591,866,238 | 3,165,413 | 4,703,707 | 394,529 | 4,634,622 | — | 604,764,509 | |||||||||||||||||||||
Acquisition of fixed assets | 61,906,641 | 13,231,096 | 5,132,529 | 1,712,598 | 15,667,903 | — | 97,650,767 | |||||||||||||||||||||
Total assets | 1,096,349,650 | 356,909,402 | 133,753,202 | 72,279,723 | 2,038,713,342 | (2,447,984,895 | ) | 1,250,020,424 | ||||||||||||||||||||
Current assets | 533,417,998 | 173,292,736 | 84,553,543 | 50,300,628 | 457,242,716 | (899,414,425 | ) | 399,393,196 | ||||||||||||||||||||
Investments in shares | 330,752 | 157,094 | 1,967,913 | — | 491,078,954 | (460,773,767 | ) | 32,760,946 | ||||||||||||||||||||
Fixed assets | 514,467,528 | 156,937,920 | 41,253,162 | 15,908,016 | 8,628,831 | — | 737,195,457 | |||||||||||||||||||||
Current liabilities | 84,578,731 | 113,869,248 | 38,595,497 | 11,677,253 | 787,977,256 | (860,383,856 | ) | 176,314,129 | ||||||||||||||||||||
Labor reserve | 162,516,165 | 160,501,772 | 36,305,067 | 43,602,148 | 68,740,031 | — | 471,665,183 | |||||||||||||||||||||
Total liability | 805,563,141 | 322,204,631 | 84,445,277 | 55,768,854 | 1,984,483,183 | (2,043,900,288 | ) | 1,208,564,798 | ||||||||||||||||||||
Equity | 290,786,509 | 34,704,770 | 49,307,958 | 16,510,869 | 54,230,161 | (404,084,641 | ) | 41,455,626 | ||||||||||||||||||||
Year ended December 31, 2005 | ||||||||||||||||||||||||||||
Sales — | ||||||||||||||||||||||||||||
Trade | Ps. | - | Ps. | 381,355,382 | Ps. | 144,987,328 | Ps. | 21,826,900 | Ps. | 454,436,655 | Ps. | - | Ps. | 1,002,606,265 | ||||||||||||||
Intersegment | 773,336,701 | 41,307,675 | 89,170,404 | 9,518,438 | 131,997,076 | (1,045,330,294 | ) | — | ||||||||||||||||||||
Services income | — | — | — | — | 1,875,001 | (650,193 | ) | 1,224,808 | ||||||||||||||||||||
Total net sales | 773,336,701 | 422,663,057 | 234,157,732 | 31,345,338 | 588,308,732 | (1,045,980,487 | ) | 1,003,831,073 | ||||||||||||||||||||
Gross income | 594,226,368 | 3,088,433 | 20,740,515 | (5,601,679 | ) | 7,885,280 | (6,451,743 | ) | 613,887,174 | |||||||||||||||||||
Operating income (loss) | 567,556,903 | (28,902,246 | ) | 10,678,648 | (9,781,605 | ) | (20,166,208 | ) | 20,317,888 | 539,703,380 | ||||||||||||||||||
Comprehensive financing cost | 8,683,177 | �� | (3,859,422 | ) | 2,598,710 | (3,550,361 | ) | (13,145,650 | ) | 4,437,455 | (4,836,091 | ) | ||||||||||||||||
Net income (loss) | (19,701,797 | ) | (57,508,914 | ) | 7,213,898 | (17,851,654 | ) | (76,533,529 | ) | 82,024,014 | (82,357,982 | ) | ||||||||||||||||
Depreciation and amortization | 42,648,709 | 8,662,918 | 3,857,966 | 1,075,044 | 750,720 | — | 56,995,357 | |||||||||||||||||||||
Labor cost reserve | 22,739,043 | 21,067,212 | 4,782,355 | 5,742,055 | 9,336,373 | — | 63,667,038 | |||||||||||||||||||||
Taxes and duties | 595,838,203 | 24,443,717 | 2,412,419 | 262,157 | 3,917,966 | — | 626,874,462 | |||||||||||||||||||||
Acquisition of fixed assets | 29,498,613 | 6,537,813 | 1,936,748 | 2,511,707 | 43,829,686 | — | 84,314,567 | |||||||||||||||||||||
Total assets | 910,762,474 | 320,419,181 | 104,721,683 | 55,842,991 | 1,624,736,468 | (1,890,886,536 | ) | 1,125,596,261 | ||||||||||||||||||||
Current assets | 379,304,272 | 138,951,636 | 56,041,394 | 33,282,845 | 429,691,461 | (721,191,173 | ) | 316,080,435 | ||||||||||||||||||||
Investments in shares | 227,313 | 157,094 | 1,276,801 | — | 231,359,791 | (204,339,923 | ) | 28,681,076 | ||||||||||||||||||||
Fixed assets | 475,493,308 | 152,858,631 | 40,924,037 | 15,850,726 | 9,340,494 | — | 694,467,196 | |||||||||||||||||||||
Current liabilities | 123,657,961 | 114,490,526 | 21,971,433 | 53,748,694 | 554,475,788 | (690,761,619 | ) | 177,582,783 | ||||||||||||||||||||
Labor reserve | 142,000,010 | 137,607,036 | 30,508,286 | 36,672,374 | 58,796,102 | — | 405,583,808 | |||||||||||||||||||||
Total liability | 747,717,710 | 303,672,915 | 59,003,711 | 90,957,975 | 1,639,794,045 | (1,686,540,129 | ) | 1,154,606,227 | ||||||||||||||||||||
Equity | 163,044,885 | 16,746,308 | 45,717,987 | (35,114,975 | ) | (15,057,361 | ) | (204,346,661 | ) | (29,009,817 | ) |
F-41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
NOTE 18 — | FISCAL REGIME: |
F-42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | |||||||
Current IRP | Ps. | 4,070,364 | Ps. | 3,705,184 | ||||
Deferred IRP | 1,867,292 | 1,031,619 | ||||||
5,937,656 | 4,736,803 | |||||||
Inflation effect | 92,711 | 178,056 | ||||||
Total IRP | Ps. | 6,030,367 | Ps. | 4,914,859 | ||||
2007 | 2006 | |||||||
Deferred asset IRP: | ||||||||
Advance from customers | Ps. | 491,424 | Ps. | 518,388 | ||||
Provision for insurance | 94,892 | 115,176 | ||||||
Provision for contingencies | 19,918 | 11,831 | ||||||
Environmental reserve | 63,508 | 85,255 | ||||||
Allowance for uncollectible | 8,899 | 9,870 | ||||||
678,641 | 740,520 | |||||||
Deferred liability IRP: | ||||||||
Advance insurance | (2,692 | ) | (7,314 | ) | ||||
Properties, plants and properties | (5,552,588 | ) | (3,855,675 | ) | ||||
(5,555,280 | ) | (3,862,989 | ) | |||||
Long term liability | (Ps. | 4,876,639 | ) | (Ps. | 3,122,469 | ) | ||
F-43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | 2005 | ||||||||||
Current income tax | Ps. | 3,253,655 | Ps. | 4,771,281 | Ps. | 3,487,273 | ||||||
Deferred income tax | (27,414 | ) | (166,237 | ) | 494,405 | |||||||
Ps. | 3,226,241 | Ps. | 4,605,044 | Ps. | 3,981,678 | |||||||
2007 | 2006 | |||||||
Deferred asset income taxes: | ||||||||
Losses of prior years | Ps. | 653 | Ps. | 8,359 | ||||
Deferred liability income taxes: | ||||||||
Properties, plants and equipment | (1,535,911 | ) | (1,483,062 | ) | ||||
Long term liability | (Ps. | 1,535,258 | ) | (Ps. | 1,474,703 | ) | ||
NOTE 19 — | NEW ACCOUNTING PRONOUNCEMENTS |
(a) | FRS B-10 “Effects of inflation” — FRS B-10 supersedesBulletin B-10 and its five amendments, as well as the related circulars and INIF. The principal guidelines established by this FRS are: (i) The use ofunidades de inversión(“UDIs”) to determine the inflation for a given period; (ii) the elimination of inventory replacement costs as well as specific indexation for fixed assets, (iii) the requirement to recognize the effects of inflation only when operating in an inflationary economic environment (accumulated inflation equal to or higher than 26% in the most recent three-year period); and (iv) reclassification of the accounts of gain or loss from holding non-monetary assets (“RETANM”), monetary position gains or losses (“REPOMO”), and deficit/excess in equity restatement, to retained earnings, when the unrealized portion is not identified. |
(b) | FRS D-3 “Employee benefits” — FRS supersedesBulletin D-3, the portion applicable to Employee Statutory Profit Sharing (“ESPS”) ofBulletin D-4 and INIF The principal guidelines |
F-44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
established by this FRS are: (i) a maximum of five years for amortizing unrecognized/unamortized items, with the option to recognize immediately actuarial gains or losses in results of operations; (ii) the elimination of the recognition of an additional liability and related intangible asset and any related item as a separate element of equity; (iii) the inclusion severance benefits in results of operations; and (iv) the presentation of ESPS, including deferred ESPS, in the statement of income as ordinary operations. Additionally, FRS D-3 establishes that the asset and liability method required by FRS D-4 should be used for determining deferred ESPS, and that any effects arising from the change are to be recognized in retained earnings, with no restatement of prior years’ financial statements. |
(c) | FRS D-4 “Tax on earnings” — FRS supersedesBulletin D-4 and Circulars 53 and 54. The principal guidelines established by this FRS are: (i) the reclassification of the cumulative income taxes effects resulting from the initial adoption ofBulletin D-4 in 2000 to retained earnings; (ii) the recognition of theImpuesto al Activo(“IMPAC”) as a tax credit (benefit), rather than as a tax prepayment; and (iii) the transfer of accounting treatment of ESPS incurred and deferred to FRS D-3, as discussed in paragraph (b) above. |
(d) | FRS B-2 “Statement of cash flows” — FRS supersedesBulletin B-12 and paragraph 33 ofBulletin B-16. The principal guidelines established by this FRS are: (i) the replacement of the statement of changes in financial position with the statement of cash flows; (ii) the reporting of cash inflows and cash outflows in nominal currency unitsi.e.the effects of inflation are not included; (iii) the establishment of two alternative preparation methods (direct and indirect), without stating preference for either method. In addition, cash flows from operating activities are to be reported first, followed by cash flows from investing activities and finally, cash flows from financing activities; (iv) the reporting of captions of principal items as gross; and (v) the requirement of disclosure of the composition of those items considered cash equivalents. |
(e) | FRS B-15 “Translation of foreign currencies” — FRS B-15 supersedesBulletin B-15. The principal guidelines established by this FRS are: (i) the substitution of the integrated foreign operation and foreign entity concepts for determining recording currency, functional currency and reporting currency, requiring that translation be made based on the economic environment in which the entity operates, regardless of its dependency on the holding company; and (ii) the inclusion of translation procedures for those instances where the reporting currency is different from the functional currency. |
NOTE 20 — | SUBSEQUENT EVENTS: |
F-45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
• | A new Organic Law for Petróleos Mexicanos. | |
• | Modifications to the Organic Law of the Public Federal Administration. | |
• | Creation of an oil commission, which would be decentralized entity under theSecretaría de Energía(Energy Ministry or “SENER”), with technical and operative autonomy. | |
• | Extensive modifications to theLey Reglamentaria, (“Regulatory Law”). | |
• | Extensive modifications to theLey de la Comisión Reguladora de Energía(“Law of the Regulatory Commission of Energy”). |
F-46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | 2005 | ||||||||||
Net (loss) income for the year under Mexican FRS | (Ps. | 18,307,569 | ) | Ps. 46,953,205 | (Ps. 82,357,982 | ) | ||||||
U.S. GAAP adjustments: | ||||||||||||
Exploration and drilling costs, net (a) | (1,370,873 | ) | (1,498,801 | ) | (1,549,819 | ) | ||||||
Pensions and seniority premiums (b) | 2,328,436 | 1,939,725 | 1,012,457 | |||||||||
Post-retirement benefits (c) | 4,025,557 | 5,042,554 | 3,375,220 | |||||||||
Accrued vacation (d) | (45,809 | ) | (20,549 | ) | (16,712 | ) | ||||||
Fixed asset adjustments: | ||||||||||||
Capitalized gains (losses) of derivative financial instruments, net (e) | (177,334 | ) | 3,928,429 | (8,445,996 | ) | |||||||
Capitalization of interest, net (f) | 3,509,960 | 2,794,394 | 1,928,272 | |||||||||
Impairment, net (g) | 3,344,517 | 3,978,566 | 6,246,987 | |||||||||
Depreciation convention (h) | 783,144 | 783,144 | 783,144 | |||||||||
Derivative financial instruments (i) | (8,149,706 | ) | 74,673 | 1,030,873 | ||||||||
Profit in inventory (j) | (18,919,219 | ) | (4,156,613 | ) | (2,776,119 | ) | ||||||
Available-for-sale investment securities (l) | 246,258 | (2,995,342 | ) | (830,179 | ) | |||||||
Effects of inflation accounting on U.S. GAAP adjustments (m) | �� | 159,139 | 28,627 | 206,880 | ||||||||
Deferred income taxes (n) | (62,488 | ) | (74,777 | ) | 442,668 | |||||||
Reclassification of Pemex Finance net income to minority interest (o) | (6,089 | ) | (54,789 | ) | 1,159,233 | |||||||
Total U.S. GAAP adjustments, net | (14,334,507 | ) | 9,769,241 | 2,566,909 | ||||||||
Net (loss) income for the year under U.S. GAAP | (Ps. | 32,642,076 | ) | Ps. 56,722,446 | (Ps. 79,791,073 | ) | ||||||
Comprehensive (loss) income under U.S. GAAP: | ||||||||||||
Net (loss) income for the year under U.S. GAAP | (Ps. | 32,642,076 | ) | Ps. 56,722,446 | (Ps. 79,791,073 | ) | ||||||
Other comprehensive income (loss): | ||||||||||||
Additional minimum pension liability (b) | (168,399,229 | ) | (20,311,938 | ) | (19,692,549 | ) | ||||||
Derivative financial instruments (i) | 656,699 | 5,274,109 | (4,930,806 | ) | ||||||||
Unrealized gains on available-for-sale investment securities (l) | (246,258 | ) | 2,995,342 | 830,179 | ||||||||
Surplus in restatement of equity | 18,539,917 | 4,108,268 | 5,571,542 | |||||||||
Other | — | 710,094 | — | |||||||||
Comprehensive (loss) income | (Ps. | 182,090,947 | ) | Ps. 49,498,321 | (Ps. 98,012,707 | ) | ||||||
F-47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | |||||||
Components of accumulated other comprehensive income at December 31: | ||||||||
Derivative financial instruments (i) | (Ps. 1,105,629 | ) | (Ps. 1,762,328 | ) | ||||
Additional minimum pension liability (b) | (211,299,353 | ) | (42,900,124 | ) | ||||
Unrealized gains on available-for-sale investment securities (l) | 12,716,759 | 12,963,017 | ||||||
Surplus in restatement of equity | 175,864,184 | 157,324,267 | ||||||
Other | 710,094 | 710,094 | ||||||
Accumulated other comprehensive income | (Ps. 23,113,945 | ) | Ps. 126,334,926 | |||||
2007 | 2006 | |||||||
Equity is reconciled as follows: | ||||||||
Equity under Mexican FRS | Ps. 49,907,861 | Ps. 41,455,626 | ||||||
U.S. GAAP adjustments: | ||||||||
Exploration and drilling costs (a) | 12,518,420 | 13,889,293 | ||||||
Pensions and seniority premiums: | ||||||||
Pensions and seniority premiums (b) | (5,546,942 | ) | (7,875,378 | ) | ||||
Additional minimum pension liability (b) | (67,715,653 | ) | 5,426,624 | |||||
Post-retirement benefits: | ||||||||
Post-retirement benefits (c) | (34,187,352 | ) | (38,212,908 | ) | ||||
Effect in equity of labor obligation (c) | (91,824,161 | ) | — | |||||
Accrued vacation (d) | (636,092 | ) | (590,283 | ) | ||||
Fixed asset adjustments: | ||||||||
Capitalized gains of hedging financial instruments, net (e) | 2,883,974 | 3,061,308 | ||||||
Capitalization of interest, net (f) | (4,782,607 | ) | (8,292,567 | ) | ||||
Impairment, net (g) | (26,564,246 | ) | (29,908,763 | ) | ||||
Depreciation convention (h) | — | (783,144 | ) | |||||
Derivative financial instruments (i) | — | 8,149,706 | ||||||
Profit in inventory (j) | (26,755,771 | ) | (7,836,552 | ) | ||||
Advanced payments on minimum guaranteed dividend (k) | (4,270,225 | ) | (268,990 | ) | ||||
Deferred income taxes (n) | 305,403 | 367,891 | ||||||
Reclassification of Pemex Finance equity to minority interest (o) | (1,415,775 | ) | (1,464,681 | ) | ||||
Total U.S. GAAP adjustments, net | (247,991,027 | ) | (64,338,444 | ) | ||||
Deficit under U.S. GAAP | (Ps. 198,083,166 | ) | (Ps. 22,882,818 | ) | ||||
F-48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | |||||||
Changes in U.S. GAAP equity for the year ended December 31: | ||||||||
Deficit at January 1 | (Ps. 22,882,818 | ) | (Ps. 120,942,611 | ) | ||||
Net (loss) income for the period | (32,642,076 | ) | 56,722,446 | |||||
Mexican Government increase in equity of Subsidiary Entities | 11,160,824 | 48,727,913 | ||||||
Minimum guaranteed dividends | (4,270,225 | ) | (166,440 | ) | ||||
Other comprehensive income: | ||||||||
Additional minimum pension liability (b) | (168,399,229 | ) | (20,311,936 | ) | ||||
Derivative financial instruments (i) | 656,699 | 5,274,109 | ||||||
Unrealized gains on available-for-sale investment securities (l) | (246,258 | ) | 2,995,342 | |||||
Surplus in restatement of equity | 18,539,917 | 4,108,265 | ||||||
Other | — | 710,094 | ||||||
Deficit at December 31 | (Ps. 198,083,166 | ) | (Ps. 22,882,818 | ) | ||||
I. | Explanation of reconciling items: |
(a) | Exploration and drilling costs |
F-49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(b) | Pensions and seniority premiums |
F-50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
Item | Bulletin D-3 | SFAS 158 | ||
Net Periodic Cost | No difference | No difference | ||
Minimum liability to be recognized | Accumulated Benefit Obligations (ABO) | Projected Benefit Obligations (PBO) | ||
Items not amortized unrecognized (actuarial gains/losses, prior service, plan amendments and transition obligation). | Recognized as components of net periodic cost based on the employees’ average working lifetime. | Recognize the total outstanding items as a component of the Accumulated other comprehensive loss/income (AOCI); for retirement and post-retirement benefits, as an adjustment to equity | ||
Unfunded ABO | Difference between ABO and plan assets | N/A | ||
Recognition of additional minimum liability | Difference between unfunded ABO and net projected liability | N/A | ||
Recognition of intangible asset and other comprehensive income | Offsetting account of additional liability | In the year of recognition of actuarial gain/losses and past service costs/credits, there is also a write off of an equivalent amount in other comprehensive income (OCI) SFAS 158, paragraph 4(d) | ||
Disclosure in the balance sheet of noncurrent assets, current liabilities and noncurrent liabilities | N/A | Required (for retirement and post-retirement benefits) |
(c) | Post-retirement benefits |
F-51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(d) | Accrued vacation |
(e) | Fixed assets—Capitalized gains and losses of derivative financial instruments |
(f) | Fixed assets—Capitalization of interest |
2007 | 2006 | 2005 | ||||||||||
Under Mexican FRS: | ||||||||||||
Interest capitalized | Ps. | 5,350,849 | Ps. | 6,996,305 | Ps. 5,540,983 | |||||||
Interest expense | 57,847,569 | 46,099,472 | 57,146,232 | |||||||||
Total interest cost | Ps. | 63,198,418 | Ps. | 53,095,777 | Ps. 62,687,215 | |||||||
Under U.S. GAAP: | ||||||||||||
Interest capitalized | Ps. | 7,797,815 | Ps. | 8,659,013 | Ps. 6,321,963 | |||||||
Interest expense | 55,400,603 | 44,436,764 | 56,365,252 | |||||||||
Total interest cost | Ps. | 63,198,418 | Ps. | 53,095,777 | Ps. 62,687,215 | |||||||
F-52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(g) | Fixed assets—Impairment |
(h) | Fixed assets—Depreciation convention |
F-53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(i) | Accounting for derivative financial instruments |
F-54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
F-55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(j) | Profit in inventory |
(k) | Advance payments on minimum guaranteed dividend |
(l) | Accounting for available-for-sale securities (Repsol) |
F-56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
Cost | Fair Value | Unrealized Gain | ||||||||||
2007 | Ps. | 10,429,499 | Ps. | 23,146,258 | Ps. | 12,716,759 | ||||||
2006 | Ps. | 10,229,803 | Ps. | 23,192,820 | Ps. | 12,963,017 | ||||||
2005 | Ps. | 10,078,636 | Ps. | 20,046,310 | Ps. | 9,967,675 |
(m) | Effects of inflation on the U.S. GAAP adjustments |
(n) | Deferred income taxes |
(o) | Reclassification of Pemex Finance equity to minority interest |
II. | Additional disclosure requirements: |
(a) | Consolidation of Pemex Finance |
F-57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(b) | Special Tax on Production and Services (“IEPS Tax”) |
(c) | Environmental, dismantlement and abandonment liabilities |
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. |
F-58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
F-59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | |||||||
Pemex—Exploration and Production | Ps. | 371,639 | Ps. | 716,572 | ||||
Pemex—Refining(1) | 1,507,709 | 1,341,520 | ||||||
Pemex—Gas and Basic Petrochemicals | 211,692 | 284,183 | ||||||
Pemex—Petrochemicals | 2,400 | 55,983 | ||||||
Total Environmental Liability Accrual | Ps. | 2,093,440 | Ps. | 2,398,258 | ||||
(d) | Dismantlement and abandonment costs |
F-60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(e) | Pensions and seniority premiums |
2007 | 2006 | 2005 | ||||||||||
Service cost | Ps. | 9,088,563 | Ps. | 7,110,082 | Ps. | 6,513,611 | ||||||
Interest cost | 27,204,694 | 23,954,649 | 20,983,953 | |||||||||
Return on plan assets | (11,149 | ) | (32,821 | ) | (185,989 | ) | ||||||
Net amortization of gain and losses | 431,153 | 349,640 | 815,762 | |||||||||
Amortization of net transition obligation | 5,733,629 | 5,708,786 | 5,749,251 | |||||||||
Adjustment to net periodic pension cost due to inflation | 866,361 | 1,521,663 | 1,098,702 | |||||||||
Plan amendments | 527,348 | 522,253 | 198,205 | |||||||||
Net cost under U.S. GAAP | 43,840,599 | 39,134,252 | 35,173,495 | |||||||||
Net cost under Mexican FRS | (46,169,035 | ) | (41,073,977 | ) | (36,185,952 | ) | ||||||
Additional (benefit) expense recognized under U.S. GAAP | (Ps. | 2,328,436 | ) | (Ps. | 1,939,725 | ) | (Ps. | 1,012,457 | ) | |||
2007 | 2006 | 2005 | ||||||||||
Discount rate | 4.25% | 4.25% | 4.50% | |||||||||
Rates of increase in compensation levels | 0.50% | 0.50% | 0.50% | |||||||||
Expected long-term rate of return on assets | 4.25% | 4.25% | 5.00% |
F-61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | |||||||
Accumulated benefit obligation | Ps. | 354,120,653 | Ps. | 329,198,933 | ||||
Projected benefit obligation | 364,687,896 | 336,758,893 | ||||||
Plan assets at fair value | (7,122,630 | ) | (2,118,402 | ) | ||||
Projected benefit obligation in excess of plan assets | 357,565,266 | 334,640,491 | ||||||
Unrecognized net loss | — | (45,560,129 | ) | |||||
Unrecognized transition obligation | — | (69,564,015 | ) | |||||
Unrecognized prior service costs | — | (5,905,290 | ) | |||||
Accrued liability under U.S. GAAP | 357,565,266 | 213,611,057 | ||||||
Accrued liability recognized under Mexican FRS | (232,543,132 | ) | (205,735,690 | ) | ||||
U.S. GAAP adjustment to seniority premium and pension plan liability after recognition of SFAS 158 | Ps. | 125,022,134 | Ps. | 7,875,367 | ||||
Accumulated other comprehensive income | 119,475,192 | — | ||||||
Net U.S. GAAP adjustment to seniority premium and pension plan liability | 5,546,942 | 7,875,367 | ||||||
Additional minimum liability | Ps. | — | Ps. | 115,122,678 | ||||
F-62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | |||||||
Before recognition of the funded status provisions of SFAS 158 | ||||||||
Additional liability | Ps. | 114,921,322 | Ps. | 115,122,678 | ||||
Actual intangible assets | 68,227,509 | 72,222,554 | ||||||
Accumulated other comprehensive (Income) | 46,693,813 | 42,900,124 | ||||||
After recognition of the funded status provision of SFAS 158 | ||||||||
Transition (assets) obligation | Ps. | 63,402,660 | Ps. | — | ||||
Prior service cost (income) | 5,208,308 | — | ||||||
Net (gain)/loss | 50,864,224 | — | ||||||
Accumulated other comprehensive (Income) | 119,475,192 | — | ||||||
Increase in accumulated other comprehensive loss (income) to reflect the recognition of SFAS 158 | Ps. | 72,781,379 | Ps. | — | ||||
Non current assets | (7,122,630 | ) | — | |||||
Current liabilities | 10,719,970 | — | ||||||
Non current liabilities | 346,845,296 | — | ||||||
Net amount recognized in statement of financial position as of December 31, 2007 | Ps. | 357,565,266 | Ps. | 328,733,735 | ||||
Expected Benefit | ||||
Year | Payments | |||
2008 | Ps. | 17,842,600 | ||
2009 | 17,923,433 | |||
2010 | 19,624,667 | |||
2011 | 21,467,404 | |||
2012 | 23,259,417 | |||
2013 | 25,232,630 | |||
2014 | 26,954,721 | |||
2015 | 28,900,722 | |||
2016 | 30,446,622 | |||
2017 | 32,066,949 | |||
Total | Ps. | 243,719,165 | ||
F-63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
Securities | 2007 | 2006 | ||||||
Mexican Government Bonds | 84.% | 71% | ||||||
Bonds issued by financial institutions listed on the Mexican Stock Exchange | 16% | 29% | ||||||
Total | 100% | 100% | ||||||
(f) | Other post-retirement benefits |
F-64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
Expected Benefit | ||||
Year | Payments | |||
2008 | Ps. | 13,257,829 | ||
2009 | 14,117,305 | |||
2010 | 15,172,410 | |||
2011 | 16,350,695 | |||
2012 | 17,605,214 | |||
2013 | 18,965,386 | |||
2014 | 20,307,814 | |||
2015 | 21,715,469 | |||
2016 | 22,562,957 | |||
2017 | 23,634,012 | |||
Total | Ps. | 183,689,091 | ||
F-65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||||||
Supplemental | Supplemental | Supplemental | ||||||||||||||||||||||||||||||||||
Payments | Health Services | Total | Payments | Health Services | Total | Payments | Health Services | Total | ||||||||||||||||||||||||||||
Service cost | Ps. | 4,103,096 | Ps. | 2,298,180 | Ps. | 6,401,276 | Ps. | 4,687,869 | Ps. | 1,210,546 | Ps. | 5,898,415 | Ps. | 2,715,518 | Ps. | 1,448,328 | Ps. | 4,163,846 | ||||||||||||||||||
Interest cost | 14,283,753 | 7,508,894 | 21,792,647 | 12,170,005 | 5,543,442 | 17,713,447 | 9,689,454 | 5,572,995 | 15,262,449 | |||||||||||||||||||||||||||
Amortization of actuarial (gains) and losses | 812,365 | (562,453 | ) | 249,912 | 421,135 | (2,697,498 | ) | (2,276,363 | ) | (177,395 | ) | (1,690,144 | ) | (1,867,539 | ) | |||||||||||||||||||||
Amortization of prior service cost and plan amendments | 21,545 | 55,841 | 77,386 | 21,369 | 58,797 | 80,166 | (15,598 | ) | — | (15,598 | ) | |||||||||||||||||||||||||
Amortization of transition obligation | 3,112,566 | 2,791,828 | 5,904,394 | 3,087,178 | 2,769,056 | 5,856,234 | 3,108,667 | 2,791,742 | 5,900,409 | |||||||||||||||||||||||||||
Adjustment to net periodic post-retirement benefit cost due to inflation | 444,765 | 241,883 | 686,648 | 826,344 | 278,575 | 1,104,919 | 512,410 | 270,467 | 782,877 | |||||||||||||||||||||||||||
Net expense under U.S. GAAP | 22,778,090 | 12,334,173 | 35,112,263 | 21,213,900 | 7,162,918 | 28,376,818 | 15,833,056 | 8,393,386 | 24,226,444 | |||||||||||||||||||||||||||
Expense under Mexican FRS | (22,925,973 | ) | (16,211,847 | ) | (39,137,820 | ) | (21,560,040 | ) | (11,859,332 | ) | (33,419,372 | ) | (15,890,329 | ) | (11,711,335 | ) | (27,601,664 | ) | ||||||||||||||||||
Additional expense (benefit) under U.S. GAAP | (Ps. | 147,883 | ) | (Ps. | 3,877,674 | ) | (Ps. | 4,025,557 | ) | (Ps. | 346,140 | ) | (Ps. | 4,696,414 | ) | (Ps. | 5,042,554 | ) | (Ps. | 57,273 | ) | (Ps. | 3,317,949 | ) | (Ps. | 3,375,220 | ) | |||||||||
F-66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | 2005 | ||||||||||
Discount rate | 4.25 | % | 4.25 | % | 4.50 | % | ||||||
Health care cost trend rate | 1.50 | % | 1.50 | % | 1.50 | % |
F-67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and
2007 | 2006 | |||||||||||||||||||||||
Supplemental | Supplemental | |||||||||||||||||||||||
Payments | Health Services | Total | Payments | Health Services | Total | |||||||||||||||||||
Accumulated unfunded post retirement benefit obligation: | ||||||||||||||||||||||||
Retirees | Ps. | 97,348,838 | Ps. | 53,911,935 | Ps. | 151,260,773 | Ps. | 83,090,461 | Ps. | 52,182,612 | Ps. | 135,273,073 | ||||||||||||
Fully eligible active participants | 16,897,125 | 1,633,991 | 18,531,116 | 15,356,194 | 1,388,752 | 16,744,946 | ||||||||||||||||||
Other active plan participants | 84,421,650 | 43,687,740 | 128,109,390 | 75,012,521 | 39,450,953 | 114,463,474 | ||||||||||||||||||
Total | 198,667,613 | 99,233,666 | 297,901,279 | 173,459,176 | 93,022,317 | 266,481,493 | ||||||||||||||||||
Unrecognized actuarial gains (losses) | — | — | — | (26,829,950 | ) | 11,130,345 | (15,699,605 | ) | ||||||||||||||||
Prior service cost and plan amendments | — | — | — | (473,680 | ) | (503,366 | ) | (977,046 | ) | |||||||||||||||
Unamortized transition obligation | — | — | — | (37,623,004 | ) | (32,861,317 | ) | (70,484,321 | ) | |||||||||||||||
Net post-retirement benefit liability: | ||||||||||||||||||||||||
U.S. GAAP | 198,667,613 | 99,233,666 | 297,901,279 | 108,532,542 | 70,787,979 | 179,320,521 | ||||||||||||||||||
Mexican FRS | (132,243,775 | ) | (39,645,991 | ) | (171,889,766 | ) | (115,068,180 | ) | (26,039,433 | ) | (141,107,613 | ) | ||||||||||||
U.S. GAAP adjustment after recognition of SFAS 158 | 66,423,838 | 59,587,675 | 126,011,513 | (6,535,638 | ) | 44,748,546 | 38,212,908 | |||||||||||||||||
Accumulated other comprehensive income | 73,107,425 | 18,716,736 | 91,824,161 | — | — | — | ||||||||||||||||||
Net U.S. GAAP adjustment | (Ps. | 6,683,587 | ) | Ps. | 40,870,939 | Ps. | 34,187,352 | (Ps. | 6,535,638 | ) | Ps. | 44,748,546 | Ps. | 38,212,908 | ||||||||||
F-68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | ||||||||||||
Supplemental | ||||||||||||
Payments | Health Services | Total | ||||||||||
After recognition of the funded status provision of SFAS 158 | ||||||||||||
Transition (assets) obligation | Ps. | 34,490,623 | Ps. | 29,986,702 | Ps. | 64,477,325 | ||||||
Prior service cost (income) | 452,493 | 446,770 | 899,263 | |||||||||
Net (gain)/loss | 38,164,309 | (11,716,736 | ) | 26,447,573 | ||||||||
Accumulated other comprehensive (Income) | Ps. | 73,107,425 | Ps. | 18,716,736 | Ps. | 91,824,161 | ||||||
Increase in accumulated other comprehensive loss (income) to reflect the adoption of SFAS 158 | Ps. | 73,107,425 | Ps. | 18,716,736 | Ps. | 91,824,161 | ||||||
Current liabilities | Ps. | 8,810,348 | Ps. | 4,447,481 | Ps. | 13,257,829 | ||||||
Noncurrent liabilities | 189,857,265 | 94,786,185 | 284,643,450 | |||||||||
Net amount recognized in statement of financial position as of December 31, 2007 | Ps. | 198,667,613 | Ps. | 99,233,666 | Ps. | 297,901,279 | ||||||
F-69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and
Seniority Premiums and | ||||||||||||||||||||||||
Pension Benefits | Supplemental Payments | Health Services | ||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||
Change in projected benefit obligation (PBO) | ||||||||||||||||||||||||
Projected benefit obligation at beginning of year | Ps. | 324,558,730 | Ps. | 281,522,669 | Ps. | 167,175,066 | Ps. | 142,717,327 | Ps. | 89,652,288 | Ps. | 65,811,024 | ||||||||||||
Effect of inflation on beginning balance | 12,200,163 | 11,410,961 | 6,284,111 | 5,784,761 | 3,370,030 | 2,667,518 | ||||||||||||||||||
Service cost | 9,088,563 | 7,110,078 | 4,103,096 | 4,687,869 | 2,298,180 | 1,210,546 | ||||||||||||||||||
Interest cost | 27,204,694 | 23,954,649 | 14,283,753 | 12,170,005 | 7,508,894 | 5,543,442 | ||||||||||||||||||
Prior service costs and plan amendments | (3,817 | ) | 1,421,199 | 677,354 | 683,104 | 131,165 | 278,782 | |||||||||||||||||
Actuarial (gains)/losses | 5,079,228 | 23,305,400 | 11,894,618 | 12,676,122 | (1,121,669 | ) | 19,901,488 | |||||||||||||||||
Benefits paid | (13,439,665 | ) | (11,966,065 | ) | (5,750,385 | ) | (5,260,012 | ) | (2,605,222 | ) | (2,390,482 | ) | ||||||||||||
Projected benefit obligation at end of year | Ps. | 364,687,896 | Ps. | 336,758,891 | Ps. | 198,667,613 | Ps. | 173,459,176 | Ps. | 99,233,666 | Ps. | 93,022,318 | ||||||||||||
Change in plan assets | ||||||||||||||||||||||||
Fair value of plan assets at beginning of year | Ps. | 2,041,656 | Ps. | 1,467,227 | — | Ps. | — | Ps. | — | Ps. | — | |||||||||||||
Effect of inflation on beginning balance | 76,746 | 59,472 | — | — | — | — | ||||||||||||||||||
Actual return on plan assets | (758,787 | ) | (804,844 | ) | — | — | — | — | ||||||||||||||||
Company contributions | 24,953,065 | 18,304,118 | — | — | — | — | ||||||||||||||||||
Transfer of funds | (5,750,385 | ) | (5,207,690 | ) | 5,750,385 | 5,207,690 | — | — | ||||||||||||||||
Benefits paid | (13,439,665 | ) | (11,699,880 | ) | (5,750,385 | ) | (5,207,690 | ) | — | — | ||||||||||||||
Fair value of plan assets at end of year | Ps. | 7,122,630 | Ps. | 2,118,403 | Ps. | — | Ps. | — | Ps. | — | Ps. | — | ||||||||||||
F-70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(g) | Leases |
(h) | Supplemental geographical information |
2007 | 2006 | 2005 | ||||||||||
Domestic sales | Ps. | 592,047,961 | Ps. | 567,289,873 | Ps. | 545,339,433 | ||||||
Export sales: | ||||||||||||
United States | 441,431,866 | 450,196,550 | 376,680,788 | |||||||||
Canada, Central and South America | 36,547,306 | 35,426,621 | 34,475,634 | |||||||||
Europe | 52,691,863 | 41,273,059 | 39,640,832 | |||||||||
Far East | 12,255,823 | 8,247,818 | 6,469,578 | |||||||||
Total export sales | Ps. | 542,926,858 | Ps. | 535,144,048 | Ps. | 457,266,832 | ||||||
Total sales | Ps. | 1,134,974,819 | Ps. | 1,102,433,921 | Ps. | 1,002,606,265 | ||||||
(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, 2007: | ||||||||||||||||
Reserves deducted in the balance sheet from the assets to which they apply: | ||||||||||||||||
Allowance for doubtful accounts | Ps. | 2,674,170 | Ps. | 12,242,359 | (Ps. | 13,425,595 | ) | Ps. | 1,490,934 | |||||||
For the year ended December 31, 2006: | ||||||||||||||||
Reserves deducted in the balance sheet from the assets to which they apply: | ||||||||||||||||
Allowance for doubtful accounts | Ps. | 2,709,459 | Ps. | 153,181 | (Ps. | 188,470 | ) | Ps. | 2,674,170 | |||||||
For the year ended December 31, 2005: | ||||||||||||||||
Reserves deducted in the balance sheet from the assets to which they apply: | ||||||||||||||||
Allowance for doubtful accounts | Ps. | 2,141,949 | Ps. | 1,670,690 | (Ps. | 1,103,180 | ) | Ps. | 2,709,459 |
F-71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(j) | Significant risks and uncertainties |
F-72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(k) | Capitalized software costs |
(l) | Supplemental condensed information on a U.S. GAAP basis |
2007 | 2006 | |||||||
ASSETS | ||||||||
Total current assets | Ps. | 397,534,791 | Ps. | 399,950,872 | ||||
Properties and equipment, net | 777,900,994 | 715,161,586 | ||||||
Intangible asset derived from the actuarial computation of labor obligations and other assets | 35,865,531 | 109,159,182 | ||||||
Total assets | Ps. | 1,211,301,316 | Ps. | 1,224,271,640 | ||||
LIABILITIES | ||||||||
Other current liabilities | Ps. | 290,099,944 | Ps. | 176,904,411 | ||||
Reserve for retirement payments, pensions and seniority premiums | 23,977,799 | — | ||||||
Total current liabilities | 314,077,743 | 176,904,411 | ||||||
Long-term debt | 424,828,472 | 524,475,242 | ||||||
Reserve for dismantlement and abandonment activities, sundry creditors and others | 31,467,252 | 31,513,074 | ||||||
Reserve for retirement payments, pensions and seniority premiums | 631,488,746 | 508,054,258 | ||||||
Non current deferred income tax liabilities | 6,106,494 | 4,742,792 | ||||||
Total liabilities | 1,407,968,707 | 1,245,689,777 | ||||||
Minority interest | 1,415,775 | 1,464,681 | ||||||
TOTAL EQUITY (DEFICIT) | (198,083,166 | ) | (22,882,818 | ) | ||||
Total liabilities and equity | Ps. | 1,211,301,316 | Ps. | 1,224,271,640 | ||||
F-73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
DECEMBER 31, 2007, 2006 AND 2005
2007 | 2006 | 2005 | ||||||||||
Total revenues, net of IEPS tax | Ps. | 1,136,035,428 | Ps. | 1,103,509,868 | Ps. | 982,007,013 | ||||||
Cost of sales | 469,614,890 | 413,280,469 | 382,868,741 | |||||||||
Gross income | 666,420,538 | 690,229,399 | 599,138,272 | |||||||||
General expenses | 84,939,004 | 78,753,185 | 74,183,794 | |||||||||
Operating income | 581,481,534 | 611,476,214 | 524,954,478 | |||||||||
Other revenues | 83,019,010 | 61,213,533 | 2,896,394 | |||||||||
Comprehensive financing result (cost) | (25,609,627 | ) | (18,151,461 | ) | (10,116,062 | ) | ||||||
Profit sharing in non-consolidated subsidiaries and affiliates | 5,791,312 | 7,078,236 | 7,828,486 | |||||||||
Income before taxes, duties and other and minority interest | 644,682,229 | 661,616,522 | 525,563,296 | |||||||||
Taxes and duties, net of IEPS tax | (677,318,216 | ) | (604,839,287 | ) | (604,607,734 | ) | ||||||
Cumulative effect of adoption of new accounting standards | — | — | (1,905,868 | ) | ||||||||
Minority interest | (6,089 | ) | (54,789 | ) | 1,159,233 | |||||||
Net income (loss) | (Ps. | 32,642,076 | ) | Ps. | 56,722,446 | (Ps. | 79,791,073 | ) | ||||
F-74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
2007 | 2006 | 2005 | ||||||||||
Operating Activities | ||||||||||||
Net (loss) income for the year | (Ps. | 32,642,076 | ) | Ps. | 56,722,446 | (Ps. | 79,791,073 | ) | ||||
Adjustments to reconcile net (loss) income to cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 68,929,829 | 61,981,571 | 52,806,137 | |||||||||
Reserve for retirement payments, pensions and seniority premiums | 78,952,867 | 67,511,070 | 59,399,939 | |||||||||
Loss on disposal of fixed assets | 10,051,439 | 3,240,015 | 5,382,303 | |||||||||
Allowance for uncollectible trade accounts | (1,086,357 | ) | 70,256 | 636,594 | ||||||||
Minority interest | 4,157 | 67,788 | (1,159,233 | ) | ||||||||
Foreign exchange loss (gain) | 4,318,464 | 13,966,773 | (30,220,724 | ) | ||||||||
Accrued interest | 4,607,397 | — | — | |||||||||
Profits sharing in subsidiaries | (5,533,058 | ) | (4,157,818 | ) | (1,660,060 | ) | ||||||
Deferred income taxes | 1,881,378 | (1,861,265 | ) | 1,692,580 | ||||||||
Dismantlement and abandonment costs in fixed assets | — | (1,992,048 | ) | (1,761,581 | ) | |||||||
Unrealized gains on financial instruments | (8,149,706 | ) | (74,672 | ) | (733,513 | ) | ||||||
Gain from monetary position | (13,413,563 | ) | (14,819,222 | ) | (17,633,272 | ) | ||||||
107,920,771 | 180,654,894 | (13,041,903 | ) | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts and notes receivable | (10,237,517 | ) | (19,845,331 | ) | (55,976,205 | ) | ||||||
Inventories | 3,643,578 | (8,630,955 | ) | (7,263,527 | ) | |||||||
Other assets | 1,219,546 | (3,249,700 | ) | 3,675,065 | ||||||||
Accounts payable and accrued liabilities | 106,582,975 | (30,742,369 | ) | 24,419,034 | ||||||||
Cash flow provided by (used in) operating activities | 209,129,353 | 118,186,539 | (48,187,536 | ) | ||||||||
Investing Activities | ||||||||||||
Acquisition of fixed assets | (134,133,678 | ) | (106,659,605 | ) | (78,426,949 | ) | ||||||
Investments in Subsidiaries | 1,508,668 | — | — | |||||||||
Specific funds accounts-trade commission | — | (6,599,909 | ) | 7,497,438 | ||||||||
Cash flows used in investing activities | (132,625,010 | ) | (113,259,514 | ) | (70,929,511 | ) | ||||||
Financing Activities | ||||||||||||
Proceeds from new long term financing | 117,557,830 | 168,709,813 | 263,049,489 | |||||||||
Financing payments | (194,928,716 | ) | (148,281,185 | ) | (140,741,177 | ) | ||||||
Increase in Equity of Subsidiary Entities | 11,160,824 | 48,702,873 | 48,142,543 | |||||||||
Retirement, seniority premiums and other post retirements benefits payments | (27,717,544 | ) | ||||||||||
Dividends paid to the Mexican Government | (263,329 | ) | (268,990 | ) | (16,500,691 | ) | ||||||
Cash flows (used in) provided by financing activities | (94,190,935 | ) | 68,862,511 | 153,950,164 | ||||||||
Effects of inflation on cash and cash equivalents | (7,092,625 | ) | (8,463,098 | ) | (2,017,874 | ) | ||||||
(Decrease) increase in cash and equivalents | (24,779,217 | ) | 65,326,438 | 32,815,244 | ||||||||
Cash and cash equivalents, beginning of period | 195,776,457 | 130,450,019 | 97,634,776 | |||||||||
Cash and cash equivalents, end of period | Ps. | 170,997,240 | Ps. | 195,776,457 | Ps. | 130,450,019 | ||||||
Supplemental cash disclosures: | ||||||||||||
Interest paid (net of amounts capitalized) | Ps. | 42,784,228 | Ps. | 53,161,244 | Ps. | 59,154,710 | ||||||
Taxes paid | 623,886,506 | 635,331,409 | 541,262,289 | |||||||||
Supplemental non-cash disclosures: | ||||||||||||
Unrealized gains on available for sale securities | (Ps. | 240,723 | ) | Ps. | 2,995,342 | Ps. | 830,179 | |||||
Additional minimum pension liability | (168,399,229 | ) | (20,311,938 | ) | (19,692,549 | ) | ||||||
Derivative financial instruments | 656,699 | 5,274,109 | (4,930,806 | ) | ||||||||
F-75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(m) | Recently issued accounting standards |
(n) | Accounting for Buy/Sell Contracts |
F-76
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(o) | Deferred income taxes |
F-77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | |||||||
Current deferred tax asset: | ||||||||
Accounts and other receivables | Ps. | 947,346 | Ps. | 1,364,303 | ||||
Inventories | 3,979,258 | 1,887,170 | ||||||
Accrued liabilities | 245,505 | 383,263 | ||||||
Prepaids and other current assets | 45,405 | 218,420 | ||||||
Total current deferred tax asset | 5,217,514 | 3,853,156 | ||||||
Less: current valuation allowance | (4,799,664 | ) | (3,339,648 | ) | ||||
Net current deferred tax asset | Ps. | 417,850 | Ps. | 513,508 | ||||
Current deferred tax liability: | ||||||||
Prepaids and other current assets | — | — | ||||||
Total current deferred tax liability | Ps. | — | Ps. | — | ||||
Noncurrent deferred tax asset: | ||||||||
Contingencies | Ps. | 1,304,574 | Ps. | 1,466,308 | ||||
Derivative financial instruments | — | — | ||||||
Reserve for environmental costs | 516,493 | 503,387 | ||||||
Property taxes | — | — | ||||||
Tax loss carryforwards | 653 | 8,370 | ||||||
Other assets | 182,115 | — | ||||||
Fixed assets | 5,189,973 | 7,951,927 | ||||||
Total noncurrent deferred tax asset | 7,193,808 | 9,929,992 | ||||||
Less: noncurrent valuation allowance | (6,617,685 | ) | (8,606,622 | ) | ||||
Net noncurrent deferred tax asset | Ps. | 576,123 | Ps. | 1,323,370 | ||||
Noncurrent deferred tax liability: | ||||||||
Derivative financial instruments | — | (649,728 | ) | |||||
Fixed assets | (7,100,465 | ) | (5,416,431 | ) | ||||
Net noncurrent deferred tax liability | (7,100,465 | ) | (6,066,159 | ) | ||||
Total noncurrent deferred tax liability | (6,524,342 | ) | (4,742,789 | ) | ||||
Net deferred tax liability | (Ps. | 6,106,493 | ) | (Ps. | 4,229,281 | ) | ||
Net deferred tax liability under U.S. GAAP | (Ps. | 6,106,493 | ) | (Ps. | 4,229,281 | ) | ||
Net deferred tax liability under Mexican FRS | 6,411,896 | 4,597,172 | ||||||
Net U.S. GAAP adjustments to the net deferred tax liability | Ps. | 305,403 | Ps. | 367,891 | ||||
(p) | Asset retirement obligations |
F-78
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
2007 | 2006 | |||||||
Balance at January 1 | Ps. | 16,027,309 | Ps. | 14,787,131 | ||||
Liabilities incurred | 1,338,248 | 1,789,002 | ||||||
Liabilities settled | — | — | ||||||
Accretion expense | 118,204 | (36,911 | ) | |||||
Inflation | (580,643 | ) | (302,725 | ) | ||||
Currency exchange gain | 245,272 | (72,542 | ) | |||||
Revisions in estimated cash flows | — | (136,646 | ) | |||||
Balance at December 31 | Ps. | 17,148,390 | Ps. | 16,027,309 | ||||
F-79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(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-80
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
Principal Amount | ||||||||||||||||
Security | Issuer | Guarantor | Outstanding | |||||||||||||
5.75% Notes due 2015 | Master Trust | Petróleos Mexicanos | U.S.$ | 234,372 | ||||||||||||
6.125% Notes due 2008 | Master Trust | Petróleos Mexicanos | 281,400 | |||||||||||||
6.625% Guaranteed Bonds due 2035 | Master Trust | Petróleos Mexicanos | 1,249,000 | |||||||||||||
7.375% Notes due 2014 | Master Trust | Petróleos Mexicanos | 362,995 | |||||||||||||
7.875% Notes due 2009 | Master Trust | Petróleos Mexicanos | 797,727 | |||||||||||||
8.00% Notes due 2011 | Master Trust | Petróleos Mexicanos | 182,174 | |||||||||||||
8.625% Bonds due 2022 | Master Trust | Petróleos Mexicanos | 160,245 | |||||||||||||
8.625% Bonds due 2023 | Master Trust | Petróleos Mexicanos | 106,507 | |||||||||||||
9.125% Notes due 2010 | Master Trust | Petróleos Mexicanos | 552,855 | |||||||||||||
9.25% Guaranteed Bonds due 2018 | Master Trust | Petróleos Mexicanos | 107,109 | |||||||||||||
9.375% Guaranteed Notes due 2008 | Master Trust | Petróleos Mexicanos | 294,775 | |||||||||||||
9.50% Guaranteed Bonds due 2027 | Master Trust | Petróleos Mexicanos | 219,217 |
Principal Amount | ||||||||
Security | Issuer | Guarantor | Outstanding | |||||
9.25% Global Guaranteed Bonds due 2018 | Petróleos Mexicanos | Pemex Exploration and Production, Pemex Refining and Pemex Gas and Basic Petrochemicals | U.S.$ | 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-81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
F-82
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
BALANCE SHEET
As of December 31, 2007
Petróleos | Subsidiary | Non-Guarantor | PEMEX | |||||||||||||||||||||
Mexicanos(1) | Master Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | Ps. | 121,386,348 | Ps. | 19,201,904 | Ps. | 3,672,809 | Ps. | 26,736,179 | Ps. | — | Ps. | 170,997,240 | ||||||||||||
Accounts, notes receivable and other, | ||||||||||||||||||||||||
net and derivative financial | ||||||||||||||||||||||||
instruments | 18,262,729 | 3,883,155 | 86,304,727 | 55,969,800 | — | 164,420,411 | ||||||||||||||||||
Accounts receivable-intercompany | 123,671,752 | 73,310,725 | 778,048,681 | 95,832,373 | (1,070,863,531 | ) | — | |||||||||||||||||
Inventories, net | 313,283 | — | 77,582,304 | 15,247,549 | — | 93,143,136 | ||||||||||||||||||
Total current assets | 263,634,112 | 96,395,784 | 945,608,521 | 193,785,901 | (1,070,863,531 | ) | 428,560,787 | |||||||||||||||||
Long-term receivables — intercompany | 633,228,579 | 470,050,109 | 16,380,552 | 98,550,013 | (1,218,209,253 | ) | — | |||||||||||||||||
Investments in shares | 368,950,383 | — | 1,595,297 | 30,312,679 | (367,795,005 | ) | 33,063,354 | |||||||||||||||||
Other investments | 213,432,941 | — | — | — | (213,432,941 | ) | — | |||||||||||||||||
Properties and equipment, net | 8,070,672 | — | 770,025,355 | 15,749,426 | — | 793,845,453 | ||||||||||||||||||
Intangible asset derived from the actuarial computation of labor obligations | 11,124,683 | — | 54,913,164 | 5,970,988 | — | 72,008,835 | ||||||||||||||||||
Other assets | 954,213 | — | 809,713 | 1,038,251 | — | 2,802,177 | ||||||||||||||||||
Total assets | Ps. | 1,499,395,583 | Ps. | 566,445,893 | Ps. | 1,789,332,602 | Ps. | 345,407,258 | (Ps. | 2,870,300,730 | ) | Ps. | 1,330,280,606 | |||||||||||
LIABILITIES | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Current portion of long-term debt | Ps. | 6,603,093 | Ps. | 62,355,642 | Ps. | 2,337,399 | Ps. | 4,753,994 | Ps. | — | Ps. | 76,050,128 | ||||||||||||
Accounts payable — intercompany | 728,424,666 | 6,605,943 | 219,812,679 | 68,108,752 | (1,022,952,040 | ) | — | |||||||||||||||||
Other current liabilities | 3,816,030 | 13,457,162 | 151,890,502 | 44,250,030 | — | 213,413,724 | ||||||||||||||||||
Total current liabilities | 738,843,789 | 82,418,747 | 374,040,580 | 117,112,776 | (1,022,952,040 | ) | 289,463,852 | |||||||||||||||||
Long-term debt | 8,676,110 | 289,721,950 | 5,160,995 | 121,269,417 | — | 424,828,472 | ||||||||||||||||||
Long-term payables-intercompany | 623,510,449 | 194,105,101 | 648,882,879 | 13,046,260 | (1,479,544,689 | ) | — | |||||||||||||||||
Reserve for retirement payments, pensions, seniority premiums, dismantlement and abandonment activities, sundry creditors, and others | 79,229,875 | 200,095 | 433,390,324 | 53,260,127 | — | 566,080,421 | ||||||||||||||||||
Total Liabilities | 1,450,260,223 | 566,445,893 | 1,461,474,778 | 304,688,580 | (2,502,496,729 | ) | 1,280,372,745 | |||||||||||||||||
EQUITY | 49,135,360 | — | 327,857,824 | 40,718,678 | (367,804,001 | ) | 49,907,861 | |||||||||||||||||
Total liabilities and equity | Ps. | 1,499,395,583 | Ps. | 566,445,893 | Ps. | 1,789,332,602 | Ps. | 345,407,258 | (Ps. | 2,870,300,730 | ) | Ps. | 1,330,280,606 | |||||||||||
(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-83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
U.S. GAAP RECONCILIATION OF EQUITY
For the year ended December 31, 2007
Petróleos | Subsidiary | Non-Guarantor | PEMEX | |||||||||||||||||||||
Mexicanos(1) | Master Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Equity under Mexican FRS | Ps. | 49,135,360 | Ps. | — | Ps. | 327,857,824 | Ps. | 40,718,678 | (Ps. | 367,804,001 | ) | Ps. | 49,907,861 | |||||||||||
U.S. GAAP adjustments: | ||||||||||||||||||||||||
Exploration and drilling costs | — | — | 12,518,420 | — | — | 12,518,420 | ||||||||||||||||||
Pensions and seniority premiums | (215,898 | ) | — | (4,721,584 | ) | (609,460 | ) | — | (5,546,942 | ) | ||||||||||||||
Additional Pension liability | (9,035,148 | ) | — | (52,271,893 | ) | (6,408,612 | ) | — | (67,715,653 | ) | ||||||||||||||
Post-retirement benefits | (4,792,303 | ) | — | (25,951,048 | ) | (3,444,001 | ) | — | (34,187,352 | ) | ||||||||||||||
Effect in equity of labor obligation | (13,666,071 | ) | — | (69,621,670 | ) | (8,536,420 | ) | — | (91,824,161 | ) | ||||||||||||||
Accrued vacation | (88,199 | ) | — | (483,805 | ) | (64,088 | ) | — | (636,092 | ) | ||||||||||||||
Fixed asset adjustments: | ||||||||||||||||||||||||
Capitalized gains (losses) of hedging financial instruments, net | — | 2,883,974 | — | — | 2,883,974 | |||||||||||||||||||
Capitalization of interest, net | 39,891 | — | (5,233,589 | ) | 411,091 | — | (4,782,607 | ) | ||||||||||||||||
Impairment, net | — | — | (22,615,830 | ) | (3,948,416 | ) | — | (26,564,246 | ) | |||||||||||||||
Profit in inventory | — | — | (26,755,771 | ) | — | (26,755,771 | ) | |||||||||||||||||
Deferred income taxes | — | — | 305,403 | — | — | 305,403 | ||||||||||||||||||
Advance payment of minimum guaranteed dividends (APMGD) | (4,270,225 | ) | — | — | — | — | (4,270,225 | ) | ||||||||||||||||
Reclassification of Pemex Finance net income to minority interest | — | — | — | (1,415,775 | ) | — | (1,415,775 | ) | ||||||||||||||||
Investments in subsidiaries(2) | (215,963,074 | ) | — | — | — | 215,963,074 | — | |||||||||||||||||
Total U.S. GAAP adjustments, net | (247,991,027 | ) | — | (191,947,393 | ) | (24,015,681 | ) | 215,963,074 | (247,991,027 | ) | ||||||||||||||
Equity (Deficit) under U.S. GAAP | Ps. | (198,855,667 | ) | Ps. | — | Ps. | 135,910,431 | Ps. | 16,702,997 | (Ps. | 151,840,927 | ) | (Ps. | 198,083,166 | ) | |||||||||
(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-84
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
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. | 133,079,873 | Ps. | 22,681,704 | Ps. | 2,977,334 | Ps. | 37,037,546 | Ps. | — | Ps. | 195,776,457 | ||||||||||||
Accounts, notes receivable and other, net | ||||||||||||||||||||||||
and derivative financial instruments | 41,568,203 | 5,393,950 | 51,748,849 | 42,841,939 | — | 141,552,941 | ||||||||||||||||||
Accounts receivable-intercompany | 51,127,882 | 40,622,344 | 685,098,180 | 68,332,370 | (845,180,776 | ) | — | |||||||||||||||||
Inventories, net | 437,851 | 7,942 | 51,439,914 | 10,178,091 | — | 62,063,798 | ||||||||||||||||||
Total current assets | 226,213,809 | 68,705,940 | 791,264,277 | 158,389,946 | (845,180,776 | ) | 399,393,196 | |||||||||||||||||
Long-term receivables — intercompany | 615,065,974 | 405,184,550 | 21,331,177 | 100,448,654 | (1,142,030,355 | ) | — | |||||||||||||||||
Investments in shares | 405,264,102 | — | 2,455,759 | 29,117,822 | (404,076,737 | ) | 32,760,946 | |||||||||||||||||
Other investments | 56,697,030 | — | — | — | (56,697,030 | ) | — | |||||||||||||||||
Properties and equipment, net | 8,423,458 | — | 712,658,610 | 16,113,389 | — | 737,195,457 | ||||||||||||||||||
Intangible asset derived from the actuarial computation of labor obligations | 11,931,936 | — | 58,163,091 | 6,400,106 | — | 76,495,133 | ||||||||||||||||||
Other assets | 1,282,491 | — | 1,139,339 | 1,753,862 | — | 4,175,692 | ||||||||||||||||||
Total assets | Ps. | 1,324,878,800 | Ps. | 473,890,490 | Ps. | 1,587,012,253 | Ps. | 312,223,779 | (Ps. | 2,447,984,898 | ) | Ps. | 1,250,020,424 | |||||||||||
LIABILITIES | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Current portion of long-term debt | Ps. | 12,844,824 | Ps. | 32,662,476 | Ps. | 1,365,763 | Ps. | 19,367,215 | — | Ps. | 66,240,278 | |||||||||||||
Accounts payable — intercompany | 634,537,523 | 4,565,436 | 180,187,172 | 25,882,770 | (845,172,901 | ) | — | |||||||||||||||||
Other current liabilities | 4,389,487 | 12,814,454 | 55,490,541 | 37,379,369 | — | 110,073,851 | ||||||||||||||||||
Total current liabilities | 651,771,834 | 50,042,366 | 237,043,476 | 82,629,354 | (845,172,901 | ) | 176,314,129 | |||||||||||||||||
Long-term debt | 15,805,453 | 373,149,214 | 1,201,152 | 134,319,423 | — | 524,475,242 | ||||||||||||||||||
Long-term payables-intercompany | 545,477,446 | 50,698,910 | 582,599,564 | 19,951,468 | (1,198,727,388 | ) | — | |||||||||||||||||
Reserve for retirement payments, pensions, seniority premiums, dismantlement and abandonment activities, sundry creditors, and others | 69,199,554 | — | 391,368,856 | 47,207,017 | — | 507,775,427 | ||||||||||||||||||
Total Liabilities | 1,282,254,287 | 473,890,490 | 1,212,213,048 | 284,107,262 | (2,043,900,289 | ) | 1,208,564,798 | |||||||||||||||||
EQUITY | 42,624,513 | — | 374,799,205 | 28,116,517 | (404,084,609 | ) | 41,455,626 | |||||||||||||||||
Total liabilities and equity | Ps. | 1,324,878,800 | Ps. | 473,890,490 | Ps. | 1,587,012,253 | Ps. | 312,223,779 | (Ps. | 2,447,984,898 | ) | Ps. | 1,250,020,424 | |||||||||||
(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-85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
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. | 42,624,513 | Ps. | — | Ps. | 374,799,205 | Ps. | 28,116,517 | (Ps. | 404,084,609 | ) | Ps. | 41,455,626 | |||||||||||
U.S. GAAP adjustments: | ||||||||||||||||||||||||
Exploration and drilling costs | — | — | 13,889,293 | — | — | 13,889,293 | ||||||||||||||||||
Pensions and seniority premiums | (526,576 | ) | — | (6,518,979 | ) | (829,823 | ) | — | (7,875,378 | ) | ||||||||||||||
Additional Pension liability | 722,398 | — | 4,215,207 | 489,019 | — | 5,426,624 | ||||||||||||||||||
Post-retirement benefits | (5,391,421 | ) | — | (29,003,251 | ) | (3,818,236 | ) | — | (38,212,908 | ) | ||||||||||||||
Accrued vacation | (81,540 | ) | — | (449,182 | ) | (59,561 | ) | — | (590,283 | ) | ||||||||||||||
Fixed asset adjustments: | ||||||||||||||||||||||||
Capitalized gains (losses) or derivative financial instruments, net | — | — | 3,061,308 | — | — | 3,061,308 | ||||||||||||||||||
Capitalization of interests, net | 27,020 | — | (8,493,416 | ) | 173,829 | — | (8,292,567 | ) | ||||||||||||||||
Impairment, net | — | — | (25,765,627 | ) | (4,143,136 | ) | — | (29,908,763 | ) | |||||||||||||||
Depreciation convention | (17,692 | ) | — | (736,698 | ) | (28,754 | ) | — | (783,144 | ) | ||||||||||||||
Derivative financial instruments | 613 | — | 8,146,456 | 2,637 | — | 8,149,706 | ||||||||||||||||||
Profit in inventory | — | — | (7,836,552 | ) | — | — | (7,836,552 | ) | ||||||||||||||||
Deferred income taxes | — | — | 367,891 | — | — | 367,891 | ||||||||||||||||||
Advance payment of minimum guaranteed dividends | (268,990 | ) | — | — | — | — | (268,990 | ) | ||||||||||||||||
Reclassification of Pemex Finance net income to minority interest | — | — | — | (1,464,681 | ) | — | (1,464,681 | ) | ||||||||||||||||
Investments in subsidiaries(2) | (58,802,256 | ) | — | — | — | 58,802,256 | — | |||||||||||||||||
Total U.S. GAAP adjustments, net | (64,338,444 | ) | — | (49,123,550 | ) | (9,678,706 | ) | 58,802,256 | (64,338,444 | ) | ||||||||||||||
Equity (Deficit) under U.S. GAAP | (Ps. | 21,713,931 | ) | Ps. | — | Ps. | 325,675,655 | Ps. | 18,437,811 | (Ps. | 345,282,353 | ) | (Ps. | 22,882,818 | ) | |||||||||
(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-86
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
STATEMENT OF INCOME
For the year ended December 31, 2007
Petróleos | Subsidiary | Non-Guarantor | PEMEX | |||||||||||||||||||||
Mexicanos(1) | Master Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Net sales | Ps. | 34,453,424 | Ps. | — | Ps. | 1,607,811,952 | Ps. | 814,111,011 | (Ps. | 1,321,401,568 | ) | Ps. | 1,134,974,819 | |||||||||||
Services income | 27,491 | — | — | 1,852,541 | (819,423 | ) | 1,060,609 | |||||||||||||||||
Total sales revenues | 34,480,915 | — | 1,607,811,952 | 815,963,552 | (1,322,220,991 | ) | 1,136,035,428 | |||||||||||||||||
Costs of sales | 235,627 | — | 932,208,069 | 815,588,389 | (1,287,366,343 | ) | 460,665,742 | |||||||||||||||||
Gross income | 34,245,288 | — | 675,603,883 | 375,163 | (34,854,648 | ) | 675,369,686 | |||||||||||||||||
General expenses: | ||||||||||||||||||||||||
Transportation and distribution expenses | — | — | 23,561,036 | 1,237,503 | — | 24,798,539 | ||||||||||||||||||
Administrative expenses | 32,982,205 | 25,934 | 51,611,895 | 8,684,722 | (33,164,291 | ) | 60,140,465 | |||||||||||||||||
Total general expenses | 32,982,205 | 25,934 | 75,172,931 | 9,922,225 | (33,164,291 | ) | 84,939,004 | |||||||||||||||||
Operating income | 1,263,083 | (25,934 | ) | 600,430,952 | (9,547,062 | ) | (1,690,357 | ) | 590,430,682 | |||||||||||||||
Other (expenses) revenues, net | (321,083 | ) | — | 82,028,474 | (6,439,786 | ) | 7,751,405 | 83,019,010 | ||||||||||||||||
Comprehensive financing result (cost) income | 10,119,811 | (25,786,670 | ) | (30,254,918 | ) | (4,995,428 | ) | 30,870,618 | (20,046,587 | ) | ||||||||||||||
Equity participation in subsidiaries | (29,969,811 | ) | — | — | 12,842,972 | 22,671,893 | 5,545,054 | |||||||||||||||||
Capitalization of Master Trust operations and others | — | 25,812,604 | — | 3,810,272 | (29,622,876 | ) | — | |||||||||||||||||
(Loss) Income before taxes and duties | (18,908,000 | ) | — | 652,204,508 | (4,329,032 | ) | 29,980,683 | 658,948,159 | ||||||||||||||||
Taxes and duties | 662,486 | — | 672,933,568 | 3,659,674 | — | 677,255,728 | ||||||||||||||||||
Net (loss) income for the year | (Ps. | 19,570,486 | ) | Ps. | — | (Ps. | 20,729,060 | ) | (Ps. | 7,988,706 | ) | Ps. | 29,980,683 | (Ps. | 18,307,569 | ) | ||||||||
(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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
U.S. GAAP RECONCILIATION OF INCOME
For the year ended December 31, 2007
Petróleos | Master | Subsidiary | Non-Guarantor | PEMEX | ||||||||||||||||||||
Mexicanos(1) | Trust(1) | Guarantors(1) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Net (loss) income under Mexican FRS | (Ps. 19,570,486 | ) | Ps. | — | (Ps. 20,729,060 | ) | (Ps. 7,988,706 | ) | Ps. | 29,980,683 | (Ps. | 18,307,569 | ) | |||||||||||
U.S. GAAP adjustments: | ||||||||||||||||||||||||
Exploration and drilling costs | — | — | (1,370,873 | ) | — | — | (1,370,873 | ) | ||||||||||||||||
Pension and seniority premiums | 310,678 | — | 1,797,395 | 220,363 | — | 2,328,436 | ||||||||||||||||||
Post-retirement benefits | 599,118 | — | 3,052,203 | 374,236 | — | 4,025,557 | ||||||||||||||||||
Accrued vacation | (6,659 | ) | — | (34,623 | ) | (4,527 | ) | — | (45,809 | ) | ||||||||||||||
Fixed asset adjustments: | ||||||||||||||||||||||||
Capitalized gains of hedging financial instruments, net | — | — | (177,334 | ) | — | — | (177,334 | ) | ||||||||||||||||
Capitalization of interest, net | 12,871 | — | 3,259,826 | 237,263 | — | 3,509,960 | ||||||||||||||||||
Impairment, net | — | 3,149,798 | 194,719 | — | 3,344,517 | |||||||||||||||||||
Depreciation convention | 17,692 | — | 736,700 | 28,752 | — | 783,144 | ||||||||||||||||||
Derivative financial instruments | (613 | ) | — | (8,146,456 | ) | (2,637 | ) | — | (8,149,706 | ) | ||||||||||||||
Profit in inventory | — | (18,919,219 | ) | — | — | (18,919,219 | ) | |||||||||||||||||
Available-for-sale securities | 246,258 | — | — | — | 246,258 | |||||||||||||||||||
Deferred income taxes | — | — | (62,488 | ) | — | — | (62,488 | ) | ||||||||||||||||
Effect of inflation accounting on U.S. GAAP adjustment | 140,863 | — | 16,163 | 2,113 | — | 159,139 | ||||||||||||||||||
Reclassification of Pemex Finance net income to minority interest | — | — | — | (6,089 | ) | — | (6,089 | ) | ||||||||||||||||
Investments in Subsidiaries | (15,654,715 | ) | — | — | — | 15,654,715 | — | |||||||||||||||||
Total U.S. GAAP adjustments | (14,334,507 | ) | — | (16,698,908 | ) | 1,044,193 | 15,654,715 | (14,334,507 | ) | |||||||||||||||
Net (loss) income for the year | (Ps. 33,904,993 | ) | Ps. | — | (Ps. 37,427,968 | ) | (Ps. 6,944,513 | ) | Ps. | 45,635,398 | (Ps. | 32,642,076 | ) | |||||||||||
(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-88
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and
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. | 26,436,747 | Ps. | — | Ps. | 1,564,963,881 | Ps. | 711,981,523 | Ps. | (1,200,948,230 | ) | Ps. | 1,102,433,921 | |||||||||||
Services income | — | — | — | 1,707,386 | (631,439 | ) | 1,075,947 | |||||||||||||||||
Total revenues | 26,436,747 | — | 1,564,963,881 | 713,688,909 | (1,201,579,669 | ) | 1,103,509,868 | |||||||||||||||||
Costs of sales | 209,910 | — | 880,664,298 | 713,123,190 | (1,175,739,188 | ) | 418,258,210 | |||||||||||||||||
Gross income | 26,226,837 | — | 684,299,583 | 565,719 | (25,840,481 | ) | 685,251,658 | |||||||||||||||||
Transportation and distribution expenses | — | — | 23,785,565 | 1,136,091 | — | 24,921,656 | ||||||||||||||||||
Administrative expenses | 31,117,062 | 31,114 | 42,096,348 | 8,135,270 | (25,327,021 | ) | 56,052,773 | |||||||||||||||||
Total costs and operating expenses | 31,117,062 | 31,114 | 65,881,913 | 9,271,361 | (25,327,021 | ) | 80,974,429 | |||||||||||||||||
Operating income | (4,890,225 | ) | (31,114 | ) | 618,417,670 | (8,705,642 | ) | (513,460 | ) | 604,277,229 | ||||||||||||||
Other (expenses) revenues net | (671,689 | ) | — | 60,257,979 | 795,886 | 831,357 | 61,213,533 | |||||||||||||||||
Comprehensive financing result (cost) income | 17,621,942 | (10,567,511 | ) | (32,065,634 | ) | (7,121,106 | ) | 8,285,684 | (23,846,625 | ) | ||||||||||||||
Equity participation in subsidiaries | 36,579,228 | — | — | 10,041,050 | (36,546,701 | ) | 10,073,577 | |||||||||||||||||
Capitalization of Master Trust operations and others | — | 10,598,625 | — | (1,993,908 | ) | (8,604,717 | ) | — | ||||||||||||||||
Income (loss) before taxes and duties | 48,639,256 | — | 646,610,015 | (6,983,720 | ) | (36,547,837 | ) | 651,717,714 | ||||||||||||||||
Taxes and duties | 360,447 | — | 599,735,358 | 4,668,704 | — | 604,764,509 | ||||||||||||||||||
Net income (loss) for the year | Ps. | 48,278,809 | Ps. | — | Ps. | 46,874,657 | Ps. | (11,652,424 | ) | Ps. | (36,547,837 | ) | Ps. | 46,953,205 | ||||||||||
(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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and
in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
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. | 48,278,809 | Ps. | — | Ps. | 46,874,657 | (Ps. 11,652,424 | ) | (Ps. 36,547,837 | ) | Ps. | 46,953,205 | ||||||||||||
U.S. GAAP adjustments: | ||||||||||||||||||||||||
Exploration and drilling costs | — | — | (1,498,801 | ) | — | — | (1,498,801 | ) | ||||||||||||||||
Pension and seniority premiums | 258,219 | — | 1,506,708 | 174,798 | — | 1,939,725 | ||||||||||||||||||
Post-retirement benefits | 730,119 | — | 3,845,768 | 466,667 | — | 5,042,554 | ||||||||||||||||||
Accrued vacation | (2,987 | ) | — | (15,532 | ) | (2,030 | ) | — | (20,549 | ) | ||||||||||||||
Fixed asset adjustments: | ||||||||||||||||||||||||
Capitalized gains of hedging financial instruments, net | — | — | 3,928,429 | — | — | 3,928,429 | ||||||||||||||||||
Capitalization of interest, net | 14,470 | — | 2,439,576 | 340,348 | — | 2,794,394 | ||||||||||||||||||
Impairment, net | — | — | 3,546,475 | 432,091 | — | 3,978,566 | ||||||||||||||||||
Depreciation convention | 17,692 | — | 736,700 | 28,752 | — | 783,144 | ||||||||||||||||||
Derivative financial instruments | (209,153 | ) | — | 287,164 | —3,338 | — | 74,673 | |||||||||||||||||
Profit in inventory | �� | — | (4,156,613 | ) | — | — | (4,156,613 | ) | ||||||||||||||||
Available-for-sale securities | (2,995,342 | ) | — | — | — | — | (2,995,342 | ) | ||||||||||||||||
Deferred income taxes | — | — | (74,777 | ) | — | — | (74,777 | ) | ||||||||||||||||
Effect of inflation accounting on U.S. GAAP Adjustment | 8,891 | — | 17,453 | 2,283 | — | 28,627 | ||||||||||||||||||
Reclassification of Pemex Finance net income to minority interest | — | — | — | (54,789 | ) | — | (54,789 | ) | ||||||||||||||||
Investments in Subsidiaries | 11,947,332 | — | — | — | (11,947,332 | ) | — | |||||||||||||||||
Total U.S. GAAP adjustments | 9,769,241 | — | 10,562,550 | 1,384,782 | (11,947,332 | ) | 9,769,241 | |||||||||||||||||
Net income (loss) for the year | Ps. | 58,048,050 | Ps. | — | Ps. | 57,437,207 | (Ps. 10,267,642 | ) | (Ps. 48,495,169 | ) | Ps. | 56,722,446 | ||||||||||||
(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-90
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and
in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
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. | 24,061,252 | Ps. | — | Ps. | 1,430,157,491 | Ps. | 593,717,816 | Ps. | (1,045,330,294 | ) | Ps. | 1,002,606,265 | |||||||||||
Services income | — | 1,875,001 | (650,193 | ) | 1,224,808 | |||||||||||||||||||
Total sales revenues | 24,061,252 | — | 1,430,157,491 | 595,592,817 | (1,045,980,487 | ) | 1,003,831,073 | |||||||||||||||||
Costs of sales | 144,345 | — | 812,102,068 | 617,226,094 | (1,039,528,608 | ) | 389,943,899 | |||||||||||||||||
Gross income | 23,916,907 | 618,055,423 | (21,633,277 | ) | (6,451,879 | ) | 613,887,174 | |||||||||||||||||
General expenses: | ||||||||||||||||||||||||
Transportation and distribution expenses | — | — | 22,490,759 | 1,165,151 | — | 23,655,910 | ||||||||||||||||||
Administrative expenses | 25,656,966 | 27,590 | 46,231,359 | 5,381,815 | (26,769,846 | ) | 50,527,884 | |||||||||||||||||
Total costs and operating expenses | 25,656,966 | 27,590 | 68,722,118 | 6,546,966 | (26,769,846 | ) | 74,183,794 | |||||||||||||||||
Operating income | (1,740,059 | ) | (27,590 | ) | 549,333,305 | (28,180,243 | ) | 20,317,967 | 539,703,380 | |||||||||||||||
Other (expenses) revenues, net | (1,096,609 | ) | — | (2,816,900 | ) | 21,144,400 | (14,334,497 | ) | 2,896,394 | |||||||||||||||
Comprehensive financing result (cost) income | 141,280 | (4,114,555 | ) | 7,422,464 | (12,722,733 | ) | 4,437,453 | (4,836,091 | ) | |||||||||||||||
Equity participation in subsidiaries | (79,370,808 | ) | — | — | 6,004,200 | 82,025,273 | 8,658,665 | |||||||||||||||||
Capitalization of Master Trust operations and others | — | 4,142,145 | — | 6,280,036 | (10,422,181 | ) | — | |||||||||||||||||
(Loss) income before taxes and duties, special tax on production and services (IEPS tax) and cumulative effect of adoption of new accounting standards | (82,066,196 | ) | — | 553,938,869 | (7,474,340 | ) | 82,024,015 | 546,422,348 | ||||||||||||||||
Taxes and duties | — | — | 622,694,255 | 4,180,207 | — | 626,874,462 | ||||||||||||||||||
Cumulative effect of adoption of new accounting standards | (481,068 | ) | — | (1,241,427 | ) | (183,373 | ) | — | (1,905,868 | ) | ||||||||||||||
Net (loss) income for the year | Ps. | (82,547,264 | ) | Ps. | — | Ps. | (69,996,813 | ) | Ps. | (11,837,920 | ) | Ps. | 82,024,015 | Ps. | (82,357,982 | ) | ||||||||
(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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and
in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
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 (loss) income under Mexican FRS | (Ps.82,547,264 | ) | Ps. | — | (Ps. 69,996,813 | ) | (Ps. 11,837,920 | ) | Ps. 82,024,015 | (Ps. 82,357,982 | ) | |||||||||||||
U.S. GAAP adjustments: | ||||||||||||||||||||||||
Exploration and drilling costs | — | — | (1,549,819 | ) | — | — | (1,549,819 | ) | ||||||||||||||||
Pension and seniority premiums | 161,589 | — | 757,723 | 93,145 | — | 1,012,457 | ||||||||||||||||||
Post-retirement benefits | 437,766 | — | 2,641,111 | 296,343 | — | 3,375,220 | ||||||||||||||||||
Accrued vacation | (2,343 | ) | — | (12,697 | ) | (1,672 | ) | — | (16,712 | ) | ||||||||||||||
Fixed asset adjustments: | ||||||||||||||||||||||||
Capitalized gains (losses) of hedging financial instruments, net | — | — | (8,445,996 | ) | — | — | (8,445,996 | ) | ||||||||||||||||
Capitalization of interests, net | 12,550 | — | 1,660,006 | 255,716 | — | 1,928,272 | ||||||||||||||||||
Impairment, net | — | — | 2,381,679 | 3,865,308 | — | 6,246,987 | ||||||||||||||||||
Depreciation convention | 9,848 | — | 758,517 | 14,779 | — | 783,144 | ||||||||||||||||||
Derivative financial instruments | (833,939 | ) | (4,214,796 | ) | 5,333,327 | 746,281 | — | 1,030,873 | ||||||||||||||||
Profit in inventory | — | — | (2,776,119 | ) | — | — | (2,776,119 | ) | ||||||||||||||||
Available-for-sale securities | (830,179 | ) | — | — | — | — | (830,179 | ) | ||||||||||||||||
Deferred income taxes | — | — | 442,668 | — | — | 442,668 | ||||||||||||||||||
Effect of inflation accounting on | ||||||||||||||||||||||||
U.S. GAAP adjustment | 190,371 | — | 14,586 | 1,923 | — | 206,880 | ||||||||||||||||||
Reclassification of Pemex Finance net income to minority interest | — | — | — | 1,159,233 | — | 1,159,233 | ||||||||||||||||||
Investments in subsidiaries | 3,421,246 | — | — | — | (3,421,246 | ) | — | |||||||||||||||||
Total U.S. GAAP adjustments | 2,566,909 | (4,214,796 | ) | 1,204,986 | 6,431,056 | (3,421,246 | ) | 2,566,909 | ||||||||||||||||
Net (loss) income for the year | (Ps.79,980,355 | ) | (Ps. | 4,214,796 | ) | (Ps. 68,791,827 | ) | Ps. | (5,406,864 | ) | Ps. | 78,602,769 | (Ps. 79,791,073 | ) | ||||||||||
(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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and
in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
STATEMENT OF CASH FLOW(1)
For the year ended December 31, 2007
Petróleos | Subsidiary | Non-Guarantor | PEMEX | |||||||||||||||||||||
Mexicanos(2) | Master Trust(2) | Guarantors(2) | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Operating activities | ||||||||||||||||||||||||
Net income (loss) for the year | (Ps. 19,570,485 | ) | Ps. | — | (Ps.20,729,059 | ) | (Ps. 7,988,708 | ) | (Ps.29,980,683 | ) | (Ps. 18,307,569 | ) | ||||||||||||
Adjustments to reconcile net income (loss) to cash provided by operating activities | ||||||||||||||||||||||||
Depreciation and amortization | 639,866 | — | 70,860,006 | 1,091,846 | — | 72,591,718 | ||||||||||||||||||
Reserve for retirement payments, pensions and seniority premiums | 12,742,593 | — | 64,195,411 | 8,368,862 | — | 85,306,866 | ||||||||||||||||||
Loss on disposal of fixed assets | 33,101 | — | 9,752,826 | 265,512 | — | 10,051,439 | ||||||||||||||||||
Allowance for uncollectible trade accounts | (111 | ) | — | (1,039,524 | ) | (46,722 | ) | — | (1,086,357 | ) | ||||||||||||||
Allowance for decline in the value of inventory | (46,625 | ) | — | (94,928 | ) | (45,151 | ) | — | (186,704 | ) | ||||||||||||||
Conversion effect | — | — | — | — | — | |||||||||||||||||||
Foreign exchange loss (gain) | 658,970 | 3,668,150 | — | (8,656 | ) | — | 4,318,464 | |||||||||||||||||
Accrued interest | (338,113 | ) | 4,193,183 | 24,426 | 727,893 | — | 4,607,389 | |||||||||||||||||
Equity in earning in investees less dividend received and other | 29,980,683 | — | (5,533,058 | ) | (29,980,683 | ) | (5,533,058 | ) | ||||||||||||||||
Gain from monetary position | (11,040,864 | ) | — | (3,469,158 | ) | 1,643,735 | — | (12,866,287 | ) | |||||||||||||||
Deferred income taxes | — | 1,867,292 | 27,414 | — | 1,894,706 | |||||||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||||||||||
Accounts and notes receivable | 21,799,646 | 1,315,383 | (35,391,122 | ) | (13,975,332 | ) | — | (26,251,425 | ) | |||||||||||||||
Inter-company changes and deductions | 372,417,508 | 2,375,374 | (230,977,862 | ) | 17,875,996 | (161,691,016 | ) | — | ||||||||||||||||
Inventories | 155,330 | 7,654 | (10,154,825 | ) | (4,659,156 | ) | — | (14,650,997 | ) | |||||||||||||||
Other assets | 281,816 | — | 288,350 | 649,381 | — | 1,219,547 | ||||||||||||||||||
Accounts payable and accrued liabilities | (668,839 | ) | 1,307,046 | 96,944,710 | 8,870,377 | — | 106,453,294 | |||||||||||||||||
Cash flows provided by (used in) operating activities | 407,044,476 | 12,866,790 | (57,923,457 | ) | 7,264,233 | (161,691,016 | ) | 207,561,026 | ||||||||||||||||
Investing activities: | ||||||||||||||||||||||||
Increase in fixed assets, net | (331,786 | ) | — | (131,384,646 | ) | (986,862 | ) | — | (132,703,294 | ) | ||||||||||||||
Inter-company (increase) decrease in investments | (187,467,741 | ) | (113,704,714 | ) | 161,051,930 | (5,397,631 | ) | 145,518,156 | — | |||||||||||||||
Investments in Subsidiaries | (3,297,964 | ) | 771,494 | 3,283,315 | 889,766 | 1,646,611 | ||||||||||||||||||
Cash flows provided by (used in) investing activities | (191,097,491 | ) | (113,704,714 | ) | 30,438,778 | (3,101,178 | ) | 146,407,922 | (131,056,683 | ) | ||||||||||||||
Financing Activities | ||||||||||||||||||||||||
Proceeds from long term financing | 51,509,770 | 59,731,700 | 6,316,360 | — | — | 117,557,830 | ||||||||||||||||||
Financing payments | (64,163,753 | ) | (106,625,310 | ) | (1,316,313 | ) | (22,823,340 | ) | — | (194,928,716 | ) | |||||||||||||
Inter-company (decrease) increase in financing | (216,111,281 | ) | 145,073,451 | 44,700,132 | 10,163,426 | 16,174,272 | — | |||||||||||||||||
Increase in equity of subsidiary entities | 11,160,824 | — | — | — | — | 11,160,824 | ||||||||||||||||||
Retirement, seniority premiums and other post retirements benefits payments | (4,951,499 | ) | — | (21,412,162 | ) | (1,353,883 | ) | — | (27,717,544 | ) | ||||||||||||||
Minimum guaranteed dividends paid to the Mexican Government | (263,329 | ) | — | — | 891,178 | (891,178 | ) | (263,329 | ) | |||||||||||||||
Cash flows provided by (used in) financing activities | (222,819,268 | ) | 98,179,841 | 28,288,017 | (13,122,619 | ) | 15,283,094 | (94,190,935 | ) | |||||||||||||||
Effects of inflation on cash and cash equivalents | (4,821,242 | ) | (821,717 | ) | (107,863 | ) | (1,341,803 | ) | — | (7,092,625 | ) | |||||||||||||
Increase (decrease) in cash and cash equivalents | (11,693,525 | ) | (3,479,800 | ) | 695,475 | (10,301,367 | ) | — | (24,779,217 | ) | ||||||||||||||
Cash and cash equivalents, beginning of period | 133,079,873 | 22,681,704 | 2,977,334 | 37,037,546 | — | 195,776,457 | ||||||||||||||||||
Cash and cash equivalents, end of period | Ps. | 121,386,348 | Ps. | 19,201,904 | Ps. 3,672,809 | Ps. 26,736,179 | Ps. | — | Ps. | 170,997,240 | ||||||||||||||
(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-93
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and
in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
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. | 48,278,809 | Ps. | — | Ps. | 46,874,657 | (Ps. 11,652,424 | ) | (Ps. 36,547,837 | ) | Ps. | 46,953,205 | ||||||||||||
Adjustments to reconcile net income (loss) to cash provided by operating activities | ||||||||||||||||||||||||
Depreciation and amortization | 696,602 | — | 64,072,741 | 902,846 | — | 65,672,189 | ||||||||||||||||||
Reserve for retirement payments, pensions and seniority premiums | 11,441,909 | — | 55,940,799 | 7,110,641 | — | 74,493,349 | ||||||||||||||||||
Impairment of fixed assets | 0 | — | — | 703,247 | — | 703,247 | ||||||||||||||||||
Loss on disposal of fixed assets | 25,566 | — | 2,948,752 | 265,697 | — | 3,240,015 | ||||||||||||||||||
Allowance for uncollectible trade accounts | 803 | — | (53,755 | ) | 123,209 | — | 70,257 | |||||||||||||||||
Allowance for decline in the value of inventory | (19,045 | ) | — | (73,872 | ) | (57,485 | ) | — | (150,402 | ) | ||||||||||||||
Foreign exchange loss (gain) | 19,881 | 12,892,035 | 646,451 | 408,406 | — | 13,966,773 | ||||||||||||||||||
Equity in earning in investees less dividend received and other | (30,613,224 | ) | — | 0 | (10,041,051 | ) | 36,547,837 | (4,106,438 | ) | |||||||||||||||
Gain from monetary position | (12,419,713 | ) | — | (4,208,196 | ) | 1,808,687 | — | (14,819,222 | ) | |||||||||||||||
Deferred income taxes | — | — | 1,070,397 | (166,236 | ) | — | 904,161 | |||||||||||||||||
Dismantlement and abandonment costs in fixed assets | — | — | (1,992,048 | ) | — | — | (1,992,048 | ) | ||||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||||||||||
Accounts and notes receivable | 6,012,026 | (5,414,268 | ) | (25,452,316 | ) | 5,042,409 | — | (19,812,149 | ) | |||||||||||||||
Inter-company changes and deductions | (99,515,994 | ) | (1,027,173 | ) | 116,167,851 | (80,576,615 | ) | 64,951,931 | — | |||||||||||||||
Inventories | (34,567 | ) | (8,965 | ) | (8,335,597 | ) | (2,413,642 | ) | — | (10,792,771 | ) | |||||||||||||
Other assets | (1,106,629 | ) | — | (101,576 | ) | 420,273 | — | (787,932 | ) | |||||||||||||||
Accounts payable and accrued liabilities | (785,108 | ) | (3,286,970 | ) | (32,760,815 | ) | 1,840,849 | — | (34,992,044 | ) | ||||||||||||||
Cash flows provided by (used in) operating activities | (78,018,684 | ) | 3,154,659 | 214,743,473 | (86,281,189 | ) | 64,951,931 | 118,550,190 | ||||||||||||||||
Investing activities | ||||||||||||||||||||||||
Increase in fixed assets, net | (264,788 | ) | — | (100,423,287 | ) | (1,913,683 | ) | — | (102,601,758 | ) | ||||||||||||||
Specific funds account-trade commission | (6,599,909 | ) | — | — | — | — | (6,599,909 | ) | ||||||||||||||||
Inter-company (increase) decrease in investments | (336,307,451 | ) | (87,159,615 | ) | (293,707,153 | ) | 59,224,025 | 657,950,194 | — | |||||||||||||||
Investments in Subsidiaries | (2,896,579 | ) | — | (859,254 | ) | 10,386,194 | (11,051,854 | ) | (4,421,493 | ) | ||||||||||||||
Cash flows provided by (used in) investing activities | (346,068,727 | ) | (87,159,615 | ) | (394,989,694 | ) | 67,696,536 | 646,898,340 | (113,623,160 | ) | ||||||||||||||
Financing Activities | ||||||||||||||||||||||||
Proceeds from long term financing | 40,748,298 | 117,116,030 | — | 10,845,485 | — | 168,709,813 | ||||||||||||||||||
Financing payments | (47,051,324 | ) | (96,041,579 | ) | — | (5,188,282 | ) | — | (148,281,185 | ) | ||||||||||||||
Inter-company (decrease) increase in financing | 518,061,228 | 29,899,016 | 143,116,680 | 33,180,854 | (724,257,778 | ) | — | |||||||||||||||||
Increase in equity of subsidiary entities | 13,708,017 | — | 34,737,021 | 257,834 | — | 48,702,872 | ||||||||||||||||||
Minimum guaranteed dividends paid to the Mexican Government | (268,990 | ) | — | — | (12,407,507 | ) | 12,407,507 | (268,990 | ) | |||||||||||||||
Cash flows provided by financing activities | 525,197,229 | 50,973,467 | 177,853,701 | 26,688,384 | (711,850,271 | ) | 68,862,510 | |||||||||||||||||
Effects of inflation on cash and cash equivalents | (8,955,456 | ) | (2,689,606 | ) | 2,714,894 | 467,066 | — | (8,463,102 | ) | |||||||||||||||
Increase (decrease) in cash and cash equivalents | 92,154,362 | (35,721,095 | ) | 322,374 | 8,570,797 | — | 65,326,438 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 40,925,511 | 58,402,799 | 2,654,960 | 28,466,749 | — | 130,450,019 | ||||||||||||||||||
Cash and cash equivalents, end of period | Ps. | 133,079,873 | Ps. | 22,681,704 | Ps. | 2,977,334 | Ps. | 37,037,546 | Ps. | — | Ps. | 195,776,457 | ||||||||||||
(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-94
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
As of December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Proved properties | Ps. | 954,798,041 | Ps. | 844,858,923 | Ps. | 739,325,338 | ||||||
Construction in progress | 50,804,000 | 56,714,624 | 56,736,361 | |||||||||
Accumulated depreciation and amortization | (405,777,786 | ) | (383,800,878 | ) | (330,177,167 | ) | ||||||
Net capitalized costs | Ps. | 599,824,255 | Ps. | 517,772,669 | Ps. | 465,884,532 | ||||||
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Exploration | Ps. | 15,133,406 | Ps. | 12,572,748 | Ps. | 15,742,112 | ||||||
Development | 100,790,721 | 88,196,418 | 80,924,293 | |||||||||
Total costs incurred | Ps. | 115,924,127 | Ps. | 100,769,166 | Ps. | 96,666,405 | ||||||
F-95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Revenues from sale of oil and gas | Ps. | 912,229,890 | Ps. | 889,945,219 | Ps. | 773,336,700 | ||||||
Hydrocarbon duties | 663,069,892 | 583,210,826 | 534,532,678 | |||||||||
Excess-gains taxes | — | 8,223,820 | 60,869,738 | |||||||||
Production costs (excluding taxes) | 82,715,955 | 75,665,272 | 76,855,383 | |||||||||
Other costs and expenses | 24,200,433 | 38,066,615 | 52,545,754 | |||||||||
Exploration expenses | 4,975,089 | 5,248,601 | 5,612,993 | |||||||||
Depreciation, depletion, amortization and accretion | 56,843,298 | 49,430,936 | 40,460,252 | |||||||||
831,804,667 | 759,846,070 | 770,876,798 | ||||||||||
Results of operations for oil and gas producing activities | Ps. | 80,425,223 | Ps. | 130,099,149 | Ps. | 2,459,902 | ||||||
2007 | 2006 | 2005 | ||||||||||
Weighted average sales price per barrel of oil equivalent(1) | U.S.$ | 69.49 | U.S.$ | 43.39 | U.S.$ | 43.75 | ||||||
Crude oil, per barrel | U.S.$ | 83.43 | U.S.$ | 47.97 | U.S.$ | 47.04 | ||||||
Natural gas, per thousand cubic feet | U.S.$ | 6.59 | U.S.$ | 6.04 | U.S.$ | 6.85 |
(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. |
F-96
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
F-97
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
(In millions of barrels) | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Proved developed and undeveloped reserves | ||||||||||||
At January 1 | 12,849 | 13,671 | 14,803 | |||||||||
Revisions(2) | 455 | 425 | 165 | |||||||||
Extensions and discoveries | 150 | 86 | 57 | |||||||||
Production | (1,268 | ) | (1,332 | ) | (1,354 | ) | ||||||
At December 31 | 12,187 | 12,849 | 13,671 | |||||||||
Proved developed reserves at December 31 | 8,436 | 8,978 | 9,617 |
(1) | Crude oil and condensate reserves include the fraction of liquefiable hydrocarbons recoverable in natural gas processing plants. | |
(2) | Revisions include positive and negative changes due to new data gathered through drilling of wells and reservoir performance |
(In billions of cubic feet) | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Proved developed and undeveloped reserves | ||||||||||||
At January 1 | 13,856 | 14,557 | 14,807 | |||||||||
Revisions(2) | 879 | 280 | 640 | |||||||||
Extensions and discoveries | 171 | 505 | 415 | |||||||||
Production(3) | (1,744 | ) | (1,487 | ) | (1,305 | ) | ||||||
At December 31 | 13,162 | 13,856 | 14,557 | |||||||||
Proved developed reserves at December 31 | 8,163 | 8,688 | 8,888 |
Note: | Numbers may not total due to rounding. | |
(1) | To convert dry gas to barrel of oil equivalent, a factor is used of 5.201 thousand cubic feet dry gas per barrel of oil | |
(2) | Revisions include positive and negative changes due to new data gathered through drilling of wells and reservoir performance. | |
(3) | Production refers to dry gas, although natural gas production reported in other tables refers to sour wet gas. There is 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. |
F-98
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
(Figures stated in thousands of Mexican pesos as of December 31, 2007 purchasing power and in thousands of U.S. dollars or other currency units, except exchange rates and oil prices per barrel)
As of December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Future cash inflows | U.S.$ | 945,566 | U.S.$ | 615,337 | U.S.$ | 653,914 | ||||||
Future production costs (excluding taxes) | (107,148 | ) | (82,696 | ) | (85,432 | ) | ||||||
Future development costs | (38,205 | ) | (35,845 | ) | (35,966 | ) | ||||||
Future cash flows before tax | 800,213 | 496,797 | 532,516 | |||||||||
Futureproduction-and-excess-gains taxes | (632,321 | ) | (410,021 | ) | (448,162 | ) | ||||||
Future net cash flows | 167,892 | 86,775 | 84,354 | |||||||||
Effect of discounting net cash flows at 10% | (78,074 | ) | (31,699 | ) | (32,728 | ) | ||||||
Standardized measure of discounted future net cash flows | U.S.$ | 89,818 | U.S.$ | 55,076 | U.S.$ | 51,626 | ||||||
Note: | Table amounts may not total due to rounding. |
F-99
2007 | 2006 | 2005 | ||||||||||
Sales of oil and gas produced, net of production costs | U.S.$ | (74,299 | ) | U.S.$ | (68,136 | ) | U.S.$ | (55,988 | ) | |||
Net changes in prices and production costs | 173,861 | 2,908 | 122,257 | |||||||||
Extensions and discoveries | 6,642 | 4,573 | 3,149 | |||||||||
Development cost incurred during the year | 8,951 | 7,803 | 7,067 | |||||||||
Changes in estimated development costs | (14,634 | ) | (6,796 | ) | (11,453 | ) | ||||||
Reserves revisions and timing changes | 29,947 | 14,910 | 3,419 | |||||||||
Accretion of discount of pre-tax net cash flows | 26,446 | 28,482 | 20,523 | |||||||||
Net changes inproduction-and-excess-gains taxes | (122,172 | ) | 19,707 | (83,972 | ) | |||||||
Aggregate change in standardized measure | U.S.$ | 34,742 | U.S.$ | 3,450 | U.S.$ | 5,002 | ||||||
Standardized measure | ||||||||||||
As of January 1 | 55,076 | 51,626 | 46,624 | |||||||||
As of December 31 | 89,818 | 55,076 | 51,626 | |||||||||
Change | U.S.$ | 34,742 | U.S.$ | 3,450 | U.S.$ | 5,002 | ||||||
Note: | Table amounts may not total due to rounding. |
F-100