INSIDE PEMEX’s INTERNATIONAL PROCUREMENT

A U.S.A. Corporation wholly owned by Petróleos Mexicanos (“PEMEX”), with the main purpose of satisfying International Procurement Services to PEMEX Group.

Operating since November 1994 Incorporated in Delaware Authorized to do Business in Texas

Who is PPI?

PEMEX: Organization

Corporate

Subsidiaries

Affiliates

Board of Directors

President & CEO

Chief Administration Officer

Chief Financial Officer

Pemex Affiliates (46)

Chief Information Technologies &

Business Processes Officer

Chief Legal Officer

Chief Operating Officer

Legal advice – IT - HR – Accounting – Treasury – Logistics

Strategic projects - QMS - Research & Development - Business intelligence

Customer

• Market research • Customer service • Purchasing

• Public tenders • Restricted tenders • Direct assignments

Supplier

Strategic Planning

• Supplier directory and evaluation • Contract negotiation • Contract administration • Contract compliance • New contracting schemes

Operation Support

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Business Model

Legal Framework

PPI operates under service contracts with PEMEX Group.

Allows PPI to act on behalf of PEMEX Group for contracting with international companies

Allows OEM/OSP to implement any commercial scheme, including the participation of Mexican entities

Our services are designed to comply with the legal and regulatory framework applicable to PEMEX Group.

• Purchase for itself

• Take title of the goods

• Mark-up

• Resell

PPI does not:

• Directly or,

• Through PPI, on behalf of PEMEX Group.

The buyer is PEMEX Group

operating:

PPI acts as a facilitator, an agent for a fully disclosed principal – PEMEX Group - by contributing

with comprehensive management solutions for the supply chain of imported goods and services.

Our Role

PEMEX defines requirements

•Technically identifies and defines procurement requirements

•If a Framework Agreement is not in place, a request for PPI’s opinion is released and eventually implemented

•If a Framework Agreement is in place, a PO is issued

PPI advices a procurement execution

• Upon PEMEX’s request PPI:

• Performs a market research

• Validates commercialization channels

Purchase is executed

• International Public Tender.

• Restricted Tenders.

• Direct Assignment.

• Framework Agreement (Blanket or/and supply order)

Decision Process

Blanket Order

• A minimum and a maximum amount to be purchased is predefined for a specific period of time

• PEMEX Group is committed to buy at least the minimum amount

The supply order specifically defines:

• Products/quantities required

• Date of delivery or completion

Supply Order

2.- Services

4.- Public Works Services

1.- Spare Parts

3.- Goods and Services

7.- Process Technology Licensing and Engineering

6.- Information Technologies

5.- Consumables

Framework Agreement Evolution

Early Procurement Process

Reverse Bids

JIT Strategic Inventory

Joint Proposal

•

New commercial initiatives

Operating Benefits

PEMEX Group uses a single procurement channel via ERP

Standard delivery, monitoring and compliance process

Reduction in inspection, freight, insurance, and customs costs

Performance and quality warranties provided by suppliers

For PEMEX For Supplier

Centralization of administrative, contractual follow-up and compliance

Flexibility to use delivery terms that fit all parties’ needs

Expertise on PEMEX´s contracting procedures and their application in the international arena

PPI’s forecast for 2013 to execute 5,230 operations +27% vs. 2012

Is a company with a team of 100 colleagues

181 Framework Agreements in operation with

suppliers from all the continents

PPI is planning to growth 300% in 2013 in operations value

which represents $11,600 USD MM

Facts

Adds Value to the PEMEX procurement process

Develops Innovating Commercial Schemes

Has a Strategic Orientation

Develops strong alliances with Business Partners

Focuses in Knowledge Development

PPI Today

http://www.pemexprocurement.com

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