Unidad de Asuntos Internacionales y Promoción de Inversiones
Mexico´s Energy Reform: The New Legal Framework
for Oil, Renewables, and Energy Efficiency
October, 2008
Unidad de Asuntos Internacionales y Promoción de Inversiones 2
Forward-looking statements and cautionary notes
• This national energy sector presentation contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward looking-statements. These are good faith statements based on current plans, estimates and projections and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. These risks and uncertainties include crude oil price volatility; production, equipment, and transportation risks inherent in the oil industry; environmental regulations in Mexico; actions of the Mexican government with respect to our operations, budget, taxation, commercial activities, control of hydrocarbon reserves, or debt service payments; any limitations on exports resulting from agreements of the Mexican government; and economic, political, and foreign exchange risks affecting Mexico. These risks and uncertainties are more fully detailed in Pemex most recent Form 20-F filing with the US Securities and Exchange Commission and the Pemex Prospectus filed with the National Banking and Securities Commission (CNBV) and available through the Mexican Stock Exchange. These factors could cause actual results to differ materially from those contained in any forward-looking statement.
• The US Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as total national reserves, probable reserves and possible reserves, that the SEC's guidelines for individual companies strictly prohibit from including in filings with the SEC. Investors are urged to consider closely the disclosure in the Mexican state owned company Pemex Form 20-F, “File No. 0-99”, available from them at www.pemex.com or Marina Nacional 329 Floor 38 Col. Huasteca, Mexico City 11311 or at (+52 55) 1944 9700. You can also obtain this Form from the SEC by calling 1-800-SEC-0330.
Unidad de Asuntos Internacionales y Promoción de Inversiones
I. The road to Mexico’s energy reform
II. The reform in brief1. The reform’s two pillars2. Affected energy laws and bills3. New provisions in the energy
laws
III. Expected results
IV. Conclusions
Index
Unidad de Asuntos Internacionales y Promoción de Inversiones
I. The road to Mexico’s energy reform
II. The reform in brief1. The reform’s two pillars2. Affected energy laws and bills3. New provisions in the energy
laws
III. Expected results
IV. Conclusions
Index
Unidad de Asuntos Internacionales y Promoción de Inversiones 5
The Office of the President requested in 2007 a diagnose of Pemex’s operations.
The diagnose, prepared by the Secretariat of Energy, identified two main areas of concern:
1. Challenges internal to Pemex
2. Challenges associated with recent trends in the global oil industry
Pemex has operated under a legal framework which has not been revised since the end of the 1970s.
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones
1. Challenges internal to Pemex
• Production drop
• Reserves decrease
• Reduced restitution rate
• Low field recovery rate
• Growth in imports of refined products
• Insufficient transport, storage and distribution infrastructure
6
Unidad de Asuntos Internacionales y Promoción de Inversiones
2. Challenges associated with recent trends in the global oil industry
• Lack of oil fields with low complexity – easy oil is no longer available
• Rise in production costs
• Insufficient human capital
• Transformation in the infrastructure industry
• The need to advance in the process of energy transition, taking advantage of renewable sources of energy and energy efficiency
7
Unidad de Asuntos Internacionales y Promoción de Inversiones
Reform initiatives discussions at Congress
May
Mar 2008
Jun
Jul
Aug
Sep
Oct
Nov
Apr
Senate forums
The Mexican Congress approved a set of reform initiatives between October 23rd and 28th.
May 13th through July 22nd: The Senate’s discussion
forums take place
2007 – President Calderon requests a Pemex
diagnose
March 31st: Senerpublishes the Diagnose of the
national oil industryApril 8th: The Executive Power delivers the Senate
reform proposals associated to the oil industry
May 19th: The Executive Power sends a proposal to
the Senate with a new fiscal regime for Pemex
for complex oil fields
July 23rd: The PRI presents its proposal for an
energy reformAugust 13th: The PVEM presents its proposal on
renewable sources of energy
August 25th: The FAP presents its reform initiative
October 23rd through 28th: THE CONGRESS APROVES
THE LAW AND REFORM INITIAVIVES
April 9th: The Senate initiates the discussion to
celebrate a national debate with the topic of an
energy reform
June 23rd through 27th: The National University
(UNAM) organized forums on the energy reform
August 20th: The PRI modifies its Party Statements
on energy matters
September 2nd: Senators from the PAN present an
initiative for a new law on sustainable use of
energy
October 9th through 23rd: The Congress discusses
the different reform proposals
Unidad de Asuntos Internacionales y Promoción de Inversiones
I. The road to Mexico’s energy reform
II. The reform in brief1. The reform’s two pillars2. Affected energy laws and bills3. New provisions in the energy
laws
III. Expected results
IV. Conclusions
Index
Unidad de Asuntos Internacionales y Promoción de Inversiones
Regulator strengthening and change in Fiscal
Regime
To increaseinvestmentcapacities
To incorporate State of the Art
technology
Oil pillarCHALLENGES
To increase execution capacities
and efficiency
Flexible contracts
Management autonomy Transparency andaccountability
Pemexstrengthening
CHANGES
National contentpromotion
To achievethe EnergyTransition
Transition pillar
Renewables
Sustainable energy
Mexico´s energy reform –it´s new legal framework and strategy- rests on two main pillars
Unidad de Asuntos Internacionales y Promoción de Inversiones
I. The road to Mexico’s energy reform
II. The reform in brief1. The reform’s two pillars2. Affected energy laws and bills3. New provisions in the energy
laws
III. Expected results
IV. Conclusions
Index
Unidad de Asuntos Internacionales y Promoción de Inversiones
Eight energy laws and bills –new or reformed-constitute the essence of the reform
Promotion of renewable sources of energy and the sustainable use of energy:
1. New Law for the Sustainable Use of Energy2. New Law for the Use of Renewable Energy and the Financing of the Energy Transition
Better strategic planning and control capacities: 3. Article 33rd of the Federal Public Administration Organic Law (new attributions to SENER)4. Law of the Energy Regulatory Commission (CRE)5. New Law of the National Hydrocarbons Commission (CNH)
Pemex strengthening: 6.-New Law of Pemex7. Regulatory Law of the Constitutional Article 27 relating to Oil Matters8. Law of Federal Rights
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones
I. The road to Mexico’s energy reform
II. The reform in brief1. The reform’s two pillars2. Affected energy laws and bills3. New provisions in the energy
laws
III. Expected results
IV. Conclusions
Index
Unidad de Asuntos Internacionales y Promoción de Inversiones 14
• Created with the purpose of promoting the use of sustainable energy and energy efficient processes and activities, from exploitation to consumption
• Creates the National Commission for the Efficient Use of Energy (CNUEE, previously Conae) and mandates government institutions into energy efficiency
• Gives CNUEE regulator attributions
1. Law for the Sustainable Use of Energy
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones 15
• Created to promote the use of the renewable energy sources and clean technologies to generate electric power with purposes other than providing the public service of electric power, as well as to establish the national strategy and the instruments for the financing of the energy transition
• Gives the Secretariat of Energy and the Energy Regulatory Commission new attributions to make rules and strategies to include more renewable energy in the national portfolio
• Creates the Energy Transition and Sustainable Energy Use Fund, with 3,000 million pesos per year from 2009 to 2011, to achieve the energy transition
2. Law for the Use of Renewable Energy and the Financing of the Energy Transition
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones 16
• Extends the capacity of the Ministry of Energy to promote private participation in areas permitted under the Constitution, as well as to grant, refuse, modify and, if applicable, to cancel the allocations for the exploration and exploitation of hydrocarbons
• Provides tools to develop long-term planning, energy efficiency and renewable energy strategies,and to set the oil production platform and the reserves policy Supported by a new technical arm - the National
Hydrocarbons Commission
3. Amendment to Article 33rd of the Organic Law of the Federal Public Administration
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones 17
• Expanded role and mandate of the Energy Regulatory Commission
• Presentsandapproves terms and conditions Regulation of fuel oil, refined products and basic
petrochemicals First hand sale prices for fuel oil and basic petrochemicals
• Improved guidelines for the alignment of market incentives in the industrialization of hydrocarbons When terms and conditions for first hand sales are in place, the
seller will have no discretion Efficiency-based pricing More certainty to participants and buyers
4. Amendment to the Law of the Energy Regulatory Commission
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones 18
• Creates the National Hydrocarbons Commission (CNH)
• Promotes the optimal use of oil wealth
The new entity will regulate and supervise the exploratory and extractive activities associated with hydrocarbons (except for coal bed methane)
It will also regulate transport and storage of hydrocarbons related with exploration and extraction projects
The CNH will support Sener in defining the oil production platform and the reserves policy
5. Law of the National Hydrocarbons Commission
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones 19
• Replaces the old Pemex Organic Law
• Pemex transforms into a real company New and explicit mandate: to add value Freedom to adjust or redesign its organizational structure Elimination of the requirement that the Finance Ministry approves
investment projects and debt, and greater flexibility in the setting of budgetary priorities
Rewards linked with results Procurement and work schemes determined by the company Independent Counselors The Director General has freedom to appoint Directors of subsidiary
firms The Board may recommend the removal of the DG to the Executive
Power
6. Law of Pemex (1/5)
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones
6. Law of Pemex (2/5)
Transparency and accountability
• Internal Control: Auditing Committee (Independent Professionals) Internal Control Organ to review the law obeying Interaction between entities
• External Control : Citizen Bonds Commissary DG reports to Congress/Council/Commissary Improved Transparency and Efficiency
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones
6. Law of Pemex (3/5)
Contracts
• Efficiency focus Contractors now have incentives to show their full capacity
and skills Pemex will use, when appriopriate, services support Pemex will use, in other cases, contractors subjected to
performance payments
• Increased execution capacity (operational and financial) Third parties allowed in exploratoryworks Additional investment capacity attracted by third parties
21
Equal conditions comparison
Pressure to improve and raise efficiency
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones
6. Law of Pemex (4/5)
Change-oriented continuity and economical spill
• Technological Research and Training funds Banobras-CONACYT Fund with $4,000 Mdp per year (2012) Research resources for:
Hydrocarbons Renewable energy
• National Content policy• Nafin Fund with $5,000 Mdp• Diagnose and Plan with goals of improving the national content
Points in tenders that contemplate domestic content To reach a minimum 25% domestic content
• Plan to incorporate small and medium companies
22
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones
6. Law of Pemex (5/5)
Additional provisions
• Pemex will offer a stable supply and feedstock to the national fertilizer industry, as well as long term contracts with fixed prices
• Secondary petrochemical producers are granted permission to sell basic petrochemicals only when they do not exceed 25% of the company’s sales
23
Unidad de Asuntos Internacionales y Promoción de Inversiones 24
• Strengthens the definitions of the oil industry, refining, petrochemicals, transboundary oil fields and hydrocarbon sovereignty
• Allows the exploitation of transboundary oil fields under the rules defined by international treaties signed by Mexico and sanctioned by the Senate
• Redefines the characteristics of works and services contracts and excludes any property over hydrocarbons, shared production nor revenues over sales
• Defines that specific regulation shall be elaborated and sanctioned by the Energy Regulatory Commission and the National Hydrocarbons Commission
7. Amendment to the Regulatory Law of Constitutional Article 27 relating to Oil Matters
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones 25
• Modified in 2005, 2007 and 2008.
• Base shifts from gross to net Efficiency
• Recognizes differences in oil returns:• Gas vs. oil • Chicontepec vs. deep waters
• Follows international practices
8. Amendment to the Law of Federal Rights
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones
I. The road to Mexico’s energy reform
II. The reform in brief1. The reform’s two pillars2. Affected energy laws and bills3. New provisions in the energy
laws
III. Expected results
IV. Conclusions
Index
Unidad de Asuntos Internacionales y Promoción de Inversiones
Additional economic growth due to the reform might add one percentage point to projected annual economic growth
D.F.
Mex Ja
lN.L
.Mich Ver
Tam
Coah
Chia
Tab
CamOtro
s
Naciona
l0
1,000
2,000
60
2
33
4
25
9
19
3
11
8
19
1
12
1
11
0
98
63
33
1,5
75
3,6
97
3,6
97
Selected States
Employment(thousand jobs accumulated by 2025)
Strengthening of economic growth(GDP additional points, %)
0.48 0.370.48
0.75
0.16
0.12Net exports
Investment
Public spending
Total
The reform will provide an estimated 218 thousand new job openings per year, reaching a total of 3.6 by 2025.
Source: Sener with prospective data**
Unidad de Asuntos Internacionales y Promoción de Inversiones
Se
rie
s1
0
50,000
100,000
150,000
200,000
250,000
300,000
Additional investment in
E&P
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Inversión adicional en
exploración y explotación
Additional investment in
refining
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
Inversión adicional en refinación
The Government and Pemex might receive 194 and 83 thousand million pesos each of additional resources in the same period.
Additional investments with the reform(thousand million pesos)
Government resources by origin (thousand million pesos)
Average
2008
2010
2012
2014
2016
2018
2020
2022
2024
0
100
200
300
400
500
600
700
800
900
Pemex without reforma Pemex sin reformaPemex sin reformaPemex sin reformaPemex sin reformaPemex sin reformaPemex sin reformaPemex sin reformaPemex sin reformaPemex sin reformaPemex sin reformaPemex sin reformaPemex sin reformaPemex sin reformaPemex sin reformaPemex sin reformaPemex sin reformaPemex sin reforma
Pemex withreforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Pemex adicional por la reforma
Federal, State and Municipal
Governments without reform
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Gobierno Federal, Estados y
Municipios sin reforma
Federal, State and Municipal Governments with reform
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
Gobierno Federal, Estados y Municipios
adicional por la reforma
The reform has the potential to generate additional investments, averaging 70 thousand million pesos from 2010 to 2025.
Source: Sener with prospective data**
Unidad de Asuntos Internacionales y Promoción de Inversiones
20
08
20
10
20
12
20
14
20
16
20
18
0
2
4
6
8
10
Crude oil production(thousand barrels per day)
Crude oil production per capita(barrels)
Pemex’s new tools and control mechanisms will help increase production levels and oil returns
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
180
5001,0001,5002,0002,5003,0003,5004,000
Source: Sener with prospective data**
Inertial
Inertial
With reform
With reform
Unidad de Asuntos Internacionales y Promoción de Inversiones
Production from new projects with the reform(thousand barrels per day)
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
0
150
300
450
600
750
Aguas Profundas Chicontepec
Cuencas del Sureste y otros campos
Production value from new projects with the reform(millions of pesos)
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
0
50,000
100,000
150,000
200,000
250,000
*MME: 75 d/b and exchange rate of 13 pesos per dollar
The reform will help in replacing declining fields with prospective resources
Source: Sener with prospective data**
Unidad de Asuntos Internacionales y Promoción de Inversiones
3P reserves discoveries with the reform(million barrels of oil equivalent)
3P reserves restitution rates with the reform(percentage)
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
0
400
800
1,200
1,600
2,000
0%
20%
40%
60%
80%
100%
120%
74%81%
90%
108% 110% 109%114%
The reserve restitution rate is also expected to increase due to the reform
Source: Sener with prospective data**
Unidad de Asuntos Internacionales y Promoción de Inversiones
An increase in the refining, transport and storage activities will contribute to energy security by guaranteeing the timely supply and quality of refined products.
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
0
200
400
600
800
1,000
1,200
1,400
1,600Producción con reforma
Producción sin reforma
Demanda interna
Reconfiguration of existing re-
fineries
New refin-ery
New refin-ery
New refin-ery
New refin-ery
Production and internal demand of gasoline(thousand barrels per day)
This will allow to maintain a positive trade balance for the
sector.
Additional energy infrastructure will contribute to energy security
Source: Sener with prospective data**
Unidad de Asuntos Internacionales y Promoción de Inversiones
Feedstock for the petrochemical industry with reform (thousand million US dollars)
20
0
20
1
20
1
20
1
20
1
20
1
20
2
20
2
20
2
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Materias primas por
reforma
Feedstock includes light naphtha and propane.
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
0
20
40
60
80
100
120
140
Feedstock for the petrochemical industry with the reform(thousand barrels per day)
Due to the additional refining capacity, the reform will allow the provision of more feedstock for the petrochemical industry.
Source: Sener with prospective data**
Unidad de Asuntos Internacionales y Promoción de Inversiones
I. The road to Mexico’s energy reform
II. The reform in brief1. The reform’s two pillars2. Affected energy laws and bills3. New provisions in the energy
laws
III. Expected results
IV. Conclusions
Index
Unidad de Asuntos Internacionales y Promoción de Inversiones
Conclusions
• Pemex faces a drop in the production rate, a drop in the reserves restitution rate and the effects of a limited refining, transport, storage and distribution infrastructure.
• The world is facing several challenges derived from the lack of low complexity oil fields, the need to change the sector’s industrial organization to embrace technological development and to move towards a sustainable energy transition.
• After a process that almost took a year, the different political forces in Mexico agreed on a reform that allows the strengthening of Pemex and promotes energy efficiency and renewable sources of energy:• Regulators strengthening to improve the sector planning and private
investors certainty• Mechanisms to help Pemex evolve into a better company• Better internal and external control as well as transparency within
Pemex• Efficiency-oriented flexible contractual schemes• A new Fiscal Regime for Pemex• Change continuity and economic spill
Unidad de Asuntos Internacionales y Promoción de Inversiones
The reform will allow to build an energy sector that becomes a
development tool for Mexico and protects the environment while
embracing the future generation requirements.
Conclusions
Unidad de Asuntos Internacionales y Promoción de Inversiones
Mexico´s Energy Reform: The New Legal Framework
for Oil, Renewables, and Energy Efficiency
October, 2008
Unidad de Asuntos Internacionales y Promoción de Inversiones
Pemex payments addressed in contracts with physical or moral people will always be in cash and will never transfer the hydrocarbon property, nor production or profit shares.
Contractors may not register oil reserves as their own.
Contractual payments will follow a predetermined formula or scheme that will allow performance incentives.
There will not be any contracts that include shared production schemes nor strategic alliances in the exclusive and strategic sectors.
Signing contracts with a single contractor that unite exploration and production activities in a determined area will be possible.
The new contractual schemes protect sovereignty and give Pemex flexibility.
Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones
Pemex will establish a strategy to support local suppliers and contractor's development.
Pemex will establish a strategy to support national suppliers within the Integral Strategic Business Plan. This strategy will include a diagnose of the current scenario of local supply and yearly goals. Local content will be, at least, 25%.
The strategy shall emphasize small and medium company’s (PyMES) development. Pemex will present an annual purchase plan from this sector.
Pemex will promote the strategy and propose policies and actions to accomplish the goals.
The Federal Government, through SHCP, will create a Fund within Nafin to support and finance Pemex suppliers and national contractors. The Fund will receive 5 thousand million pesos in 2009 and 2.5 thousand million pesos in 2010.Source: Sener with data from the approved reform initiatives
Unidad de Asuntos Internacionales y Promoción de Inversiones
The new law allows Pemex to use the excess revenues from oil sales.
This law allows Pemex to gradually use the excess revenues from oil sales (in 6 years) and gives them the autonomy to manage their budget and debt.
• 1st year: 20% of the excess revenues will be returned to Pemex (at least, 10 thousand million pesos) and budgetary autonomy will be executed as long as Pemex respects the financial and primary balances and there is no budget increase in personal services nor pensions.
• 2nd& 3rd years: 35% (at least, 11 thousand Mdp) from the excess revenues, budgetary autonomy and the mandate to meet the Pemex Business Plan goals. From the 2nd year on, Pemex has freedom to allocate debt, under the budgetary roof authorized by Congress. During the 3rd year, Pemex shall put out bonds that represent 3% of the total debt and the primary balance restriction is released.
• 4th& 5th years: 62.5% (at least, 14 thousand Mdp) and 75% (at least,15 thousand Mdp) from the excess revenues and budgetary freedom, while meeting the restrictions for the previous years. During the 5th year Pemex shall put out bonds that represent 5% of the total debt and the pensions’ restriction is released.
• 6th year: 87.5% (at least, 15 thousand Mdp) from the excess revenues and 100% during the 7th year; both years with budgetary freedom. Pemex must use the revenues to meet the Business Plan goals (except in the 6th year), the financial balance and to avoid increase the personal expenses budget.
Source: Sener with data from the approved reform initiatives
Top Related