results as of the 2nd quarter 2011 - pemex · investors are urged to consider closely the...
TRANSCRIPT
Results as of the 2nd Quarter 2011
July 29, 2011
2
Forward-Looking Statement and Cautionary Note(1/3)
VariationsIf no further specification is included, changes are made against the same period of the last year.
RoundingNumbers may not total due to rounding.
Financial informationExcluding (i) budgetary ,(ii) volumetric, (iii) revenue from sales and services including IEPS, (iv) domestic sales including IEPS, (v) petroleum products sales including IEPS, and (vi) operating income including IEPS information, the financial information included in this report is based on unaudited consolidated financial statements prepared in accordance with Normas de Informacion Financiera (Mexican Financial Reporting Standards, FRS) -formerly Mexican GAAP- issued by the Consejo Mexicano para la Investigación y Desarrollo de Normas de Información Financiera (CINIF).
• Based on FRS B-10 "Inflation effects", 2010 and 2011 amounts are expressed in nominal terms.• Based on FRS B-3 "Income Statement” and FRS “C-10” Derivative Financial Instruments and Hedging Transactions”, the financial income and
cost of the Comprehensive Financial Result include the effect of financial derivatives.• EBITDA is a non-U.S. GAAP and non-FRS measure issued by CINIF.
Budgetary information is based on standards from Mexican governmental accounting; therefore, it does not include information from the subsidiary companies of Petróleos Mexicanos.
Foreign exchange conversionsConvenience translations into U.S. dollars of amounts in Mexican pesos have been made at the established exchange rate, at June 30, 2011, of Ps. 11.8389= U.S.$1.00. Such translations should not be construed as a representation that the peso amounts have been or could be converted into U.S. dollars at the foregoing or any other rate.
3
Fiscal regimeSince January 1, 2006, PEMEX has been subject to a new fiscal regime. Pemex-Exploration and Production’s (PEP) tax regime is governed by the Federal Duties Law, while the tax regimes of the other Subsidiary Entities continue to be governed by Mexico’s Income Tax Law. The most important duty paid by PEP is the Ordinary Hydrocarbons Duty (OHD), the tax base of which is a quasi operating profit. In addition to the payment of the OHD, PEP is required to pay other duties.
Under PEMEX’s current fiscal regime, the Special Tax on Production and Services (IEPS) applicable to gasoline and diesel is regulated under the Federal Income Law. PEMEX is an intermediary between the Secretary of Finance and Public Credit (SHCP) and the final consumer; PEMEX retains the amount of IEPS and transfers it to the Federal Government. The IEPS rate is calculated as the difference between the retail or “final price”, and the “producer price”. The final prices of gasoline and diesel are established by the SHCP. PEMEX’s producer price is calculated in reference to that of an efficient refinery operating in the Gulf of Mexico. Since 2006, if the final price is lower than the producer price, the SHCP credits to PEMEX the difference among them. The IEPS credit amount is accrued, whereas the information generally presented by the SHCP is cash-flow.
Hydrocarbon reservesPursuant to Article 10 of the Regulatory Law to Article 27 of the Political Constitution of the United Mexican States Concerning Petroleum Affairs, (i) PEMEX's reports evaluating hydrocarbon reserves shall be approved by the National Hydrocarbons Commission (NHC); and (ii) the Secretary of Energy will register and disclose Mexico's hydrocarbon reserves based on information provided by the NHC. As of the date of this report, this process is ongoing.
As of January 1, 2010, the SEC changed its rules to permit oil and gas companies, in their filings with the SEC, to disclose not only proved reserves, but also probable reserves and possible reserves. In addition, we do not necessarily mean that the probable or possible reserves described herein meet the recoverability thresholds established by the SEC in its new definitions. Investors are urged to consider closely the disclosure in our Form 20-F and our annual report to the Mexican Banking and Securities Commission, available at http://www.pemex.com/.
Forward-Looking Statement and Cautionary Note(2/3)
4
BidsNo awards for amounts higher than Ps. 100 billion were aasigned during the second qusrter 2011. For further information, please access www.compranet.gob.mx.
Forward-looking statementsThis report contains forward-looking statements. We may also make written or oral forward-looking statements in our periodic reports to the CNBV and the SEC, in our annual reports, in our offering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. We may include forward-looking statements that address, among other things, our:
• drilling and other exploration activities;• import and export activities;• projected and targeted capital expenditures; costs; commitments; revenues; liquidity, etc.
Actual results could differ materially from those projected in such forward-looking statements as a result of various factors that may be beyond our control. These factors include, but are not limited to:
• changes in international crude oil and natural gas prices;• effects on us from competition;• limitations on our access to sources of financing on competitive terms;• significant economic or political developments in Mexico;• developments affecting the energy sector; and• changes in our regulatory environment.
Accordingly, you should not place undue reliance on these forward-looking statements. In any event, these statements speak only as of their dates, and we undertake no obligation to update or revise any of them, whether as a result of new information, future events or otherwise. These risks and uncertainties are more fully detailed in PEMEX’s most recent Form 20-F filing with the SEC (www.sec.gov), and the PEMEX prospectus filed with the CNBV and available through the Mexican Stock Exchange (www.bmv.com.mx). These factors could cause actual results to differ materially from those contained in any forward-looking statement.
PEMEXPEMEX is Mexico’s national oil and gas company. Created in 1938, it is the exclusive producer of Mexico’s oil and gas resources. The operating subsidiary entities are Pemex-Exploration and Production, Pemex-Refining, Pemex-Gas and Basic Petrochemicals and Pemex-Petrochemicals. The principal subsidiary company is PMI.
Forward-Looking Statement and Cautionary Note(3/3)
5
Highlights
Upstream
Downstream
Financial Results
Questions and Answers
Content
6
Context 2Q11
5060708090
100110120
US$/barrel Crude Oil Prices
Avg: 69.8
Avg: 105.8
3.0
3.5
4.0
4.5
5.0
5.5US$/MMBtu Natural Gas Prices
Henry Hub
Avg:4.3
Avg:4.4
1.51.82.02.32.52.83.03.33.5US$/Gal Prices of Gasoline in the U.S.
Regular Gasoline in the Gulf of Mexico
Avg: 2.1
Avg: 3.0
11.0
11.5
12.0
12.5
13.0
13.5Ps./US$ Exchange Rate
Avg:12.6
Avg:11.7
Mexican Oil Mix
WTI
7
Highlights 2Q11
• Net income improved by Ps. 29.205 billion (U.S. $2.5 billion), reaching Ps. 9.1 billion (U.S. $769 million).
• Crude oil production remained practically stable.
• Increase in sales due to higher prices of crude oil and a stable production platform.
• Increase in the Ordinary Hydrocarbons Duty recorded during the quarter.
• PEMEX’s Board of Directors approved its 2012-2016 Business Plan in a unanimous vote. The plan underscores its commitment and direction towards achieving sustainable goals.
• Petróleos Mexicanos and the Petroleum Workers’ Union signed the Union Labor Contract Agreement for 2011-2013.
8
Main Highlights
Upstream
Downstream
Financial Results
Questions and Answers
Content
9
Crude Oil ProductionMbd
75%
25%Offshore
Onshore
57% 55% 54% 56% 56%
31% 33% 33% 31% 31%
12% 12% 13% 13% 13%
2,578 2,567 2,552 2,572 2,558
2Q10 3Q10 4Q10 1Q11 2Q11
Heavy Light Extra-light
10
MMcfd
Natural Gas Production(1)
34%
66%
Offshore
Onshore
(1) Does not include nitrogen.
60% 62% 63% 63% 63%
40% 38% 37% 37% 37%
6,330 6,339 6,290 6,167 5,937
2Q10 3Q10 4Q10 1Q11 2Q11
Associated Non-associated
11
755
487 376 364
495 446
272 300
11.5%
7.5%
5.9% 5.7%
7.8%7.1%
4.4%5.1%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0
200
400
600
800
3T09 4T09 1T10 2T10 3T10 4T10 1T11 2T11
Gas flaring Gas flaring / Total gas produced
In the last two years, PEMEX has decreased gas flaring by more than 60%.
Gas FlaringMMcfd
12
63.5%
32.8%
9.7%
20.3%
8.8%
11.1%
6.3%
10.5%
5.3%
8.8%
6.4%16.5%
1H04 1H11
KMZ
Cantarell
APC LT
SL
Cantarell
APC
KMZ
SLBJ Otro
sSL
OtherOther
93.6%
83.5%
Crude Oil Production - Diversification
SL: Samaria-Luna
BJ: Bellota-Jujo
LT: Litoral de Tabasco
KMZ: Ku-Maloob-Zaap
APC: Abkatún-Pol-Chuc
737633
582 534 520
1H09 2H09 1H10 2H10 1H11
Average Monthly Decline Rate
Cantarell's Production
4.2% 1.5% 1.7% 1.1% 0.3%
Mbd
13
Operational Infrastructure - Wells
4,382 4,578 3,989 4,083 4,266 4,382 4,578 4,701
3,032 3,069 3,108 2,812 2,925 3,032 3,069 3,077
192 190 213 190 191 192 190 185
7,606 7,837 7,310 7,085 7,382 7,606 7,837 7,963
3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
Crude oil Non-associated gas Injection
6%
94%
Offshore
Onshore
14
Operational Infrastructure - Drilling Equipment
26%
74%
Exploration
Offshore
Onshore
19%
81%
Development
Offshore
Onshore
11989 88 94 103
20
20 21 16 12
139
108 109 111 115
2Q10 3Q10 4Q10 1Q11 2Q11
Development Exploration
15
Seismic Information
3D Seismic
Aguas profundas
411
739 820
5,011
9,543 10,619
2,000
4,000
6,000
8,000
10,000
12,000
200
400
600
800
1,000
2Q10 3Q10 4Q10 1Q11 2Q11
Km2
Km
2D (Km) 3D (Km )2
9%24%
22%
45%
91%
Shallow Waters
Deep Waters
Ixic
Tzumat
Centauro
16
Discoveries
PEMEXMain Discoveries 2Q11
Project Well Geological EraInitial Production
Hydrocarbon typeCrude oil and Condensates
(bd)
Gas (MMcfd)
Burgos Bragado-1 Mid Jackson Eocene 41.0 1.6 Wet gasLindero-1 Cold Marine Mid
Oligocene49.0 2.8 Wet gas
Siroco-1 Mid Jackson Eocene 47.0 2.1 Wet gasHolok-Temoa Piklis-1 Inferior Miocene 90.2 18.2 Wet gasLitoral de Tabasco Xanab-101 Superior-Mid Cretaceous 3,786.0 2.6 Light oilVeracruz Chancarro-1 Superior Miocene 6.1 Dry gasTotal 4,013.2 33.4
17
First Tender: Mature Fields in the South Region
• Magallanes, Santuario and Carrizo are the first three blocks.
• 27 companies have participated in the process and acquired a total of 53 bidding packages .
• There were 9 meetings, 3 workshops and several field visits.
• Final Awarding: August 18th 2011
In the Southern Region of México, PEMEX has identified around 40 mature fields which have a high potential of reactivation. These fields may be grouped into eight blocks.
Publication of the Public
Tender03/01/11
Bidding Packages Sales
Limit07/06/11
Prequalification Period
07/12/11 -07/27/11
Awarding08/18/11
Contract Signing Period
08/18/11 -10/18/11
18
Main Highlights
Upstream
Downstream
Financial Results
Questions and Answers
Content
19
Crude Oil Processing
766 742 698 752 729
475 443 357
409 439
1,418 1,363
1,230 1,327 1,319
2Q10 3Q10 4Q10 1Q11 2Q11
Light Crude Heavy Crude Petroleum products production
Mbd
20
Production of Petroleum Products
-
250
500
750
1,000
1,250
1,500
2Q10 3Q10 4Q10 1Q11 2Q11
6% Other*
4% Jet Fuel
16% LPG
21% Diesel
23% Fuel Oil
30% Automotive gasolines
* Includes paraffins, furfural extract, aeroflex, asphalt, lubricants, coke, cyclical light oil and other gasolines.
1,319
Mbd
21
Natural Gas Processing and Dry Natural Gas and Gas Liquids Production
3,423 3,413 3,398 3,483 3,486
1,081 1,022 984 1,042 1,073
4,504 4,435 4,383 4,525 4,559
2Q10 3Q10 4Q10 1Q11 2Q11
Sour Wet Gas Sweet Wet GasProduction
ProcessingMMcfd
3,643 3,578 3,570
3,677 3,703
336
329 324
340 345
320
330
340
350
360
3,200
3,400
3,600
3,800
2Q10 3Q10 4Q10 1Q11 2Q11
Mbd
MM
cfd
Dry Gas from Plants (MMcfd) Natural Gas Liquids (Mbd)*Does not include condensate process.
22
Production of Petrochemicals
*Includes muriatic acid, butadiene, polyethylene wax, petrochemical specialties, BTX liquids, hydrogen, isohexane, pyrolysis liquids, oxygen, CPDI, sulfur, isopropyl alcohol, amorphous gasoline, octane basis gasoline and heavy naphtha.
126 132 113 126 117
303 281 360 366 315
345 327 282 356
345
205 195 194 132
161
123 99 84 105 110
504 462 420 389 427
1,607 1,497 1,454 1,474 1,475
2Q10 3Q10 4Q10 1Q11 2Q11
Other* Propylene and Derivatives Aromatics and DerivativesEthane Derivatives Methane Derivatives Basic
Mt
23
Main Highlights
Upstream
Downstream
Financial Results
Questions and Answers
Content
24
2Q11 Financial HighlightsBillion Pesos Billion Dollars
Change2Q10 2Q11 2Q11
(1) Earnings before interests, taxes, depreciation and amortization. Excludes IEPS.
Total revenue from sales and services 313.6 393.3 25.4% 33.226.5
Income before Taxes and Duties 134 229.7 19.471.4% 11.3
Net Income (loss) (20.1) 0.779.1 (1.7)
EBITDA(1) 217.6 31.1%285.2 24.118.4
Operating Income 140.2 184.6 15.631.7% 11.8
2Q10
Gross Income 163.8 209.4 17.727.8% 13.8
Taxes and Duties 154.1 220.6 18.643.1% 13
Total revenue from sales and services including IEPS 336.7 445.4 32.3% 37.628.4
25
Total SalesPs. MM
Domestic Sales
146,835 170,330
16,699
17,194 7,049
8,627 170,582 196,151
2Q10 2Q11
PetrochemicalproductsDry gas
PetroleumProducts
15.0%
Export Sales
106,162 152,271
13,396
21,898
22,150
21,449 141,708
195,618
2Q10 2Q11
Other
Petroleum products
Crude oil andcondensates
38.0%
313,574393,310
25,56853,910 258
2Q10 In Mexico Exports Servicesincome
2Q11
25.4%
26
Sales
81%
12%
4% 3%United States of America
Europe
Far East
Rest of the Americas
2Q11 Crude Oil Exports by Region
Domestic sales of petroleum products by volume:
• During the second quarter, sales of fuel oil and diesel increased 4.0% and 1.7%, respectively.
• In contrast, LPG and jet fuel decreased 2.2% and 3.8%, respectively.
100% = 1,339 Mbd
27
Cost of Sales and General Expenses
173,358
208,69034,167 1,165
2Q10 Cost of Sales General Expenses 2Q11
20.4%
Ps. MM
28
(30,719)
(3,316)
14,686
12,717
Financial Income Exchange Gain 2Q112Q10
Comprehensive Financial ResultPs. MM
29
154,107
220,577
191,536
66,090 380 29,041
2Q10due
Hydrocarbonduties
Other taxes 2Q11due
IEPSacreditable
2Q11payable
Taxes and Duties
128,936
184,27018,299
21,049
6,872
15,259
154,107
220,577
2Q10 2Q11
Other taxes and duties
Hydrocarbons Duty forthe Stabilization Fund
Ordinary HydrocarbonsDuty
Ps. MM
30
(20,105)9,100
79,736
23,868 (35,332)(27,403) (66,470)
2Q10 TotalSales
OtherRevenues*
Cost andoperatingexpenses
CFR Taxes andDuties
2Q11
Net Income Evolution
Ps. MM
* Includes sharing in non-consolidated subsidiaries and affiliates.
31
External and Structural Effects
PEMEXEconomic impact by external and structural efects
Six months ending Jun. 30,(Ps. Billion) (U.S.$Billion)
Cost of the LPG subsidy 14.5 1.2 Not-recognized costs in the price mechanism of automotive gasoline and diesel 10.9 0.9 Decrease in Duties paid due to recognition of operating cost and expenses incurred in 2011 26.9 2.3
Labor obligations 49.5 4.2
Incremental taxes 5.0 0.4
Total 107 9.0
32
Debt
Ps. MM
* Includes accrued interest.
575,171 541,462
529,517 531,138 89,555
88,356
69,672 (87,120)
(17,459) (100,302) 664,725
629,819
Total Debt4Q10
FinancingActivities*
Amortizations ExchangeGain
Total Debt2T11
Cash & CashEquivalents
Net Debt2Q11
Net Debt4Q10
Long-term Short-term
33
Debt Exposure
79.5%
20.5%
U.S. dollars
Mexican pesos
By currency:
54.6%
45.4% Fixed
Floating
By rate:
3.3
5.4
6.7
MXP
USD
OtherCurrencies
As of June 30, 2010
Average6.1
3.1
5.5
5.8
MXP
USD
OtherCurrencies
As of June 30, 2011
Average5.4
Average life:
34
Financing Program 2011
SourceAmount (U.S.$ billion)
Raised(Billion)
International Markets 3.35 U.S.$2.25
Dollars 2.25 U.S.$2.25
Other Currencies/Markets 1.1
Domestic Markets 1.5 Ps. 10.0/U.S.$0.8
CEBURES 1.5 Ps. 10.0/U.S.$0.84
Bank Loans * 1
Export Credit Agencies (ECAs) 1.25
Others 1 U.S.$0.2
Contractor Financing 1 U.S.$0.2
TOTAL 8.1 U.S.$3.29
2011E Financing Program
100% = 8.1 billion U.S. Dollars
37%
19%
12%
19% 13%
International Markets Domestic Markets
Bank Loans Export Credit Agencies (ECAs)
Others
Sums may not total due to rounding* Does not include disbursements under revolving credit lines
35
Cash Flow
Ps. MM
* Before taxes.**Excludes Financed Public Works Contract Program.**Includes change of cash effect of Ps. 1,087.0 million.
133,587
474,918
67,007 675,513
100,302
99,838
62,498
411,789
Cash at thebeginning of the
year
Revenues fromoperations*
FinancingActivities**
Availablecashflow
Amortizations** Investments Taxes Cash at the endof the period***
36
Main Highlights
Upstream
Downstream
Financial Results
Questions and Answers
Content
37
Investor Relations(+52 55) 1944 - [email protected]