Investor Presentation February 1, 2017
Content Current Status 1 PEMEX 2016 Business Plan 2017 Outlook 1
Key Player in the Oil Industry Main Crude Oil Producers 1 MMbd 11.9 3.9 3.5 3.3 3.2 3.1 2.9 2.6 2.3 2.2 Saudi NIOC INOC Rosneft CNPC KPC PDV PEMEX Exxon Petrobras Aramco E&P Investment Evolution PEMEX Crude Oil Production Billion pesos (current) MMbd Onshore Other offshore 350 ∆ -38 % 300 250 200 150 ∆+54% 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2 Petroleum Intelligence Weekly (PIW) 2015, The World’s Top 50 Oil Companies. 1
Our Infrastructure Refining Capacity 1 9 gas processing centers MMbd 6 refineries in Mexico and 1 in the US Sinopec 5.9 Exxon 5.0 CNPC 4.6 Shell 3.2 Saudi Aramco 3.1 Valero 3.0 PDV 2.7 Petrobras 2.4 Total 2.2 Phillips 2.1 Rosneft 2.0 8th onshore drilling company More than 40,000 km of pipelines BP 1.9 15th logistics company (by assets) 74 storage and distribution terminals Chevron 1.8 258 operating platforms 16 ships 9,000 wells Close to 1,500 tank trucks PEMEX 1.8 3 Petroleum Intelligence Weekly (PIW) 2015, The World’s Top 50 Oil Companies. 1
Content Current Status PEMEX 2016 2 Business plan 2017 Outlook 4
Year of Financial Stabilization Execution of the MXN 100 billion budget adjustment • Generate efficiencies and reduce costs MXN 35 billion • Defer / reassess investments MXN 64.9 billion • CAPEX & OPEX adjustment to focus on profitable activities under a low hydrocarbons price scenario MXN 6.2 billion Federal Government support measures • Cash flow injection MXN 73.5 billion • Fiscal benefit MXN 38.5 billion • Pension liability assumption MXN 184.2 billion Financial balance improved by approximately 1/3* 5 * Financial balance results from the subtraction of the total expenditures (including financial cost) from the total income
Year of Financial Stabilization 100% of suppliers accounts payable MXN 147 billion • Payment prioritization according to the size of the company Strengthening of the financial structure • Measures positively received by the markets • Decrease in PEMEX risk • Permanent access to different markets New business models under the Energy Reform • Non-strategic asset divestment (GdC) • Trión farmout with BHP Billiton • JV with Chevron & Inpex (Perdido area block 3) 6
Progress Made in Deep Waters Perdido Area – 21 Assignments Including Trión PEMEX’s Assignments ▪ PEMEX has invested Trión Farmout approximately MXN 50 Round 1.4 Deep Waters billion in the Perdido area, Oil and Gas Field 3D Seismeic with discoveries of 3P reserves above 1,600 MMboe ▪ Fields: Trión, Supremus, Maximino, Exploratus y Nobilis ▪ PEMEX will develop deep water projects through farmouts 1 Reserva asociada a Trión, Supremus, Maximino, Exploratus y Nobilis 2 Reservas 3P
First Deep-Water Farmout • Trión was discovered in 2012 and will be farmed out to accelerate its development, considering its strategic location near deep water projects in the US Gulf of Mexico ▪ 3P reserves: 485 Mmboe ▪ Type of hydrocarbon: Light crude oil ▪ Water depth: 2,532 m ▪ Initial production: 2023 Technical data ▪ Estimated investment: USD 10-11 bn ▪ Estimated production: 120 Mbd Base Contract Conditions ▪ BHP Billiton / PEMEX: 60% / 40% ▪ Royalties & Duties ▪ Duration: 35-50 years – Contractual fee – Exploratory Phase 1 ▪ Minimum carry: USD 570 MM – Royalties as a percentage of the ▪ Minimum requirement: value of hydrocarbons extracted. Varies according to prices – 1,250 km 2 of 3D seismeic Exploration & – 1 exploratory well Extraction – 1 delineation well Contract Awarding Variables ▪ Additional royalty: 4% ▪ Tie-break criteria: – Additional carry offered by winner paid as follows: • 10% signing bonus to the Mexican Oil Fund • 90% in favor of PEMEX 1 First 60 months: MXN 1,175.42 / km2. Beginning month 61 and until termination: MXN 2,810.78/ km2
BHP Billiton will cover up to USD 1.9 bn before PEMEX makes additional contributions… MMUSD 7.5% Basic royalty 4.0% Additional royalty 570.0 Minimum carry Cash amount proposed as a tie-breaking criteria 1 624.0 62.4 Signing bonus payable to the Mexican Oil Fund 561.6 Additional carry in favor of PEMEX 561.6 USD 1,974 million 2 570 0.4 • PEMEX would make additional contributions to the joint account until 2020-2021 • Contract to be signed during the first week of March 2017 • PEMEX’s investment before achieving initial production is estimated at USD 600 million 1 According to clause 17.4 of the bidding rules 9 2 in accordance with the definitions established in the Joint Operating Agreement
Pemex's First Deep-Water JV Perdido Fold Belt Association PEMEX’s Assignments PEMEX E&P 33.33% Trión Farmout Chevron Energía de México 33.33% Round 1.4 Deep Waters Inpex Corporation 33.33% Oil and Gas Field 3D Seismeic Basic royalty 7.50% Additional royalty 7.44% Block 3 North Technical data Block area (km 2 ) 2,977 Prospective resources 3,437.3 (mmboe) Extra-light crude oil Type of hydrocarbon Light crude oil Wet gas • The contract considers 3,374 work units, equivalent to USD 3.4 million • No wells were compromised for this contract • Contract to be signed during the second week of March 2017 10
-20,000 -15,000 -10,000 10,000 15,000 20,000 -5,000 5,000 5.00 5.50 6.00 6.50 7.00 7.50 8.00 Positive Trend 0 sep-11 1T12 ene-12 2T12 may-12 3T12 sep-12 4T12 Operating Income 1T13 ene-13 Average Duration of Debt USD millions 2T13 may-13 3T13 sep-13 4T13 ene-14 1T14 Years may-14 2T14 3T14 sep-14 4T14 ene-15 1T15 may-15 2T15 sep-15 3T15 ene-16 4T15 1T16 may-16 2T16 sep-16 7.60 3T16 -12,000 -10,000 -8,000 -6,000 -4,000 -2,000 2,000 4,000 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 0 0 ene-09 1T12 may-09 2T12 sep-09 3T12 ene-10 Consolidated Historical Cash Balance may-10 4T12 sep-10 1T13 ene-11 2T13 may-11 USD millions sep-11 Net Result 3T13 ene-12 4T13 may-12 USD millions 1T14 sep-12 ene-13 2T14 may-13 3T14 sep-13 4T14 ene-14 1T15 may-14 sep-14 2T15 ene-15 3T15 may-15 4T15 sep-15 ene-16 1T16 may-16 2T16 sep-16 3T16
Debt Profile PEMEX’s portfolio strategy has prioritized the development of new sources of financing to • diversify the its investor base and currencies • To reduce external impacts, the company has chosen a hedging strategy that matches its U.S. dollar-based income structure By Currency Exposure By Currency By Interest Rate By Instrument 1% 3% 1% 2% 1% 1% 4% 5% 5% 3% 14% 16% 23% 5% 12% 11% 68% 66% 77% 82% Dollar International Bonds Australian dollar Cebures Euro ECAs Fixed Floating UDIS Dollar Peso Int. Bank Loans British pound Domestic Bank Loans Yen UDIS Yen Revolving Credit Peso Others Swiss franc 12 Nota: As of September 30, 2016, total financial debt was USD 98.1 billion. Sums may not total due to rounding.
Financing Access and Active Debt Management • Markets have reacted positively. However, local market lags compared to international market • PEMEX has recorded a rally against its main benchmarks in USD, showing a reduction of around 159 bps during the year PEMEX USD 5Y PEMEX vs. UMS 10Y 7.5 330 400 310 7.0 Rendimiento al vencimiento (%) 350 290 6.5 270 Puntos base 6.0 300 250 5.5 230 250 5.0 210 4.5 190 200 4.0 170 150 3.5 150 ene-16 may-16 sep-16 ene-17 ene-2016 abr-2016 jul-2016 oct-2016 ene-2017 Pemex vs UMS 10a PEMEX vs Mbono 10a Pemex vs UMS 5a Pemex 5a USD Source: Bloomberg 13
Maintained Access to Financial Markets February March June July October December Active Debt Management USD 5 USD 2.5 USD 380 million USD 760 million USD 5.6 USD 5.5 billion billion billion billion Rate Rate Rate Rate Rate Rate 6.5% 4.3% 1.8% 0.5% 5.6% 6.1% Demand Demand Minimum First operation of 2017 pre-funding exceeded by exceeded by nominal rate this kind since 3.5x 2.7x reached in any 2007 currency Improves amortization profile 14
Content Current Status PEMEX 2016 Business Plan 3 2017 Outlook 15
Business Plan 2016-2021 Conservative Assumptions • 2017 marks an inflection point in recent trends Does not consider additional revenues from divestments Maintain cost reduction discipline implemented in 2016. Increase in productivity is documented individually Additional cash flow from the execution of JVs will be used to improved the company’s cash position Crude Oil Price 1 PEMEX’s Funding Cost BRENT futuros USD per barrel PEMEX 80 5.8% PETROBRAS 5.6% 70 5.6% 71 71 5.6% 68 5.5% 61 60 59 56 60 55 5.4% 58 57 5.4% 56 48 55 54 50 5.2% 42 40 5.2% 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 1. Primary surplus: MXN 8.4 billion 2. Reachable production goal: 1,944 Mbd 3. Conservative price projection: 42 USD/b 16 1 Source: Bloomberg (October) & Pemex
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