July 29, 2011 Financial Results of Petróleos Petróleos Mexicanos, Subsidiary Entities and Subsidiary Companies as of June 30,

Transcription

1 July 29, 2011 Financial Results of Petróleos Petróleos Mexicanos, Subsidiary Entities and Subsidiary Companies as of June 30, Second Quarter (Apr.-Jun.) Variation 2011 (Ps. Bn) (U.S.$Bn) Highlights Total Sales % 33.2 Increases in sales due to higher crude oil prices and a stable production platform. Gross Income % 17.7 Lower expenses in proportion to revenues from sales and services. Operating Income % 15.6 A decrease in the net cost of employee benefits due to hypothesis adjustments in the actuarial calculation. Income before Taxes and Duties % 19.4 An increase in other revenues due to a higher amount of IEPS [1] credit. Taxes and Duties % 18.6 An increase in the Ordinary Hydrocarbons Duty recorded during the quarter. Net Income (20.1) % 0.8 Net income increased by Ps. 29,205 million. Uses and Sources as of June 30, , ,513 99, ,918 62, , , ,302 Cash at the beginning of the year Revenues from operations* Financing Activities** Available cashflow Amortizations** Investments Taxes Cash at the end of the period*** * Before taxes. **Excludes Financed Public Works Contract Program. **Includes change of cash effect of Ps. 1,087.0 million. 1 All comparisons are made against the same period of the previous year unless otherwise specified. [1] IEPS means Impuesto Especial sobre Producción y Servicio (Special Tax on Production and Services).

2 Operating Results Upstream Second quarter (Apr.-Jun.) Change Total hydrocarbons (Mboed) 3,798 3, % (69) Liquid hydrocarbons (Mbd) 2,625 2, % (15) Crude oil (Mbd) 2,578 2, % (20) Condensates (Mbd) % 5 Natural gas (MMcfd) (1) 6,937 6, % (233) Downstream Dry gas from plants (MMcfd) (2) 3,643 3, % 60 Natural gas liquids (Mbd) % 12 Petroleum Products (Mbd) (3) 1,418 1, % (99) Petrochemical Products (Mt) 1,607 1, % (131) (1) Includes nitrogen. Main Statistics of Production (2) Does not include dry gas produced by Pemex-Refining and used as fuel by this subsidiary e (3) Includes LPG from Pemex-Gas and Basic Petrochemicals; Pemex-Exploration and Production Upstream Crude Oil Production Crude oil production remained relatively stable, the variation was driven by: a temporary shut-down of operations at Nitrogen Company of Cantarell (CNC by its Spanish acronym). The company supplies nitrogen to be injected at different oil fields in the Northeastern Marine Region, in order to maintain pressure and optimize the hydrocarbons recovery factor and production; maintenance in the Ku-Maloob-Zaap Asset; and a natural decline in production in the Southern Region fields, mainly in Jujo-Tecominoacán and in the Northeastern Marine Region, mainly Cantarell. Extra-light crude oil production increased by 8.2%, as a result of the completion and repairs of wells in the Delta del Grijalva Project in the Samaria-Luna Asset. Crude Oil Production (Mbd) 2,578 2,567 2,552 2,572 2,558 12% 12% 13% 13% 13% 31% 33% 33% 31% 31% 25% Offshore Onshore 57% 55% 54% 56% 56% 75% 2Q10 3Q10 4Q10 1Q11 Heavy Light Extra-light Results Report as of June 30, / 21

3 Project Diversification By diversifying its project portfolio, has been able to reduce its production dependence on Cantarell, achieve important growth from other fields, and allow the stabilization of production. Main Crude Oil Production Assets 93.6% 1H04 Cantarell 63.5% APC 9.7% KMZ 8.8% BJ SL Otros 6.3% 5.3% 6.4% 83.5% 1H11 KMZ 32.8% Cantarell 20.3% APC 11.1% LT 10.5% SL 8.8% Otros 16.5% APC:Abkatún-Pol Chuc; KMZ: Ku-Maloob-Zaap; BJ: Bellota Jujo; LT: Litoral de Tabasco; SL: Samaria Luna 2,800 2,400 2,000 1,600 1, ,558 2Q10 3Q10 4Q10 1Q11 16% 9% 11% 11% 20% 33% Other Samaria-Luna Litoral de Tabasco Abkatún-Pol Chuc Cantarell Ku-Maloob-Zaap Similary, measures taken to mitigate Cantarell s natural decline have continued to prove effective. Average Monthly Decline Rate 4.2% 1.5% 1.7% 1.1% 0.3% H09 2H09 1H10 2H10 1H11 Cantarell's Production Results Report as of June 30, / 21

4 Natural Gas Production Total natural gas production decreased by %, primarily as a result of: a decrease in non-associated gas production, due to the natural decline in production of fields in the Veracruz Asset, and a decrease in production of the Burgos Projects resulting from reduced drilling activities; and a decrease in associated gas production, due to the natural decline in production of fields in the Southern Region and in the Northeastern Marine Region (Cantarell). This decrease was partially offset by an increase in production in the Litoral de Tabasco Asset of the Southwestern Marine Region. Natural Gas Production (MMcfd) 6,330 6,339 6,290 6,167 5,937 40% 38% 37% 37% 37% 60% 62% 63% 63% 63% 2Q10 3Q10 4Q10 1Q11 Associated Non-associated 6,400 5,937 5,600 4,800 26% 4,000 11% 3,200 10% 2,400 11% 12% 1,600 8% % - 2Q10 3Q10 4Q10 1Q11 Other Litoral de Tabasco Abkatún-Pol Chuc Samaria-Luna Veracruz Cantarell Burgos 66% 34% Offshore Onshore 2 Does not include nitrogen. Results Report as of June 30, / 21

5 Gas Flaring Gas flaring decreased by 17.5%, primarily due to: the installation of additional infrastructure on marine platforms for the compression and transportation of gas; and the implementation of strategies in Cantarell to optimize the exploitation of wells with high gas content, and increase the operations reliability of existing equipment for gas handling Gas Flaring 11.5% 7.5% 7.8% 7.1% 5.9% 5.7% 5.1% % Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Gas flaring (MMcfd) Gas flaring / Total gas produced 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Operational Infrastructure has focused on conducting a more efficient drilling strategy, which relies on a greater use of technology and information, and is intended to generate increased value. As of June 30, 2011, the total number of operating wells increased by 12.4% due to the incorporation of crude oil production wells in the Poza Rica Altamira and Aceite Terciario del Golfo (ATG) assets in the Northern Region. The increase in non associated gas production wells resulted from the shut-down of wells in 2010, due to floods caused by the hurricane Alex in the Burgos project. The total number of exploration wells drilled increased by three wells, due to greater activity in the Burgos and Veracruz projects in the Northern Region, in the Comalcalco project of the Southern Region, and in Crudo Ligero Marino and Gulf of Mexico B of the Southwestern Marine Region. The total number of development wells drilled decreased by 42.8%, primarily as a result of decreased programmed activity in the ATG and Burgos projects. The number of drilling rigs in operation decreased by 17%, as result of programmed reductions of activities in the ATG, Burgos, Cantarell and Ku-Maloob-Zaap. 7,606 7, ,032 3,069 7,310 7, ,108 2,812 Operating Wells 7,382 7,606 7,837 7, ,925 3,032 3,069 3,077 6% Offshore Onshore 4,382 4,578 3,989 4,083 4,266 4,382 4,578 4,701 94% 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Crude oil Non-associated gas Injection Results Report as of June 30, / 21

6 Km Completed Wells 10 Exploration Development Q10 3Q10 4Q10 1Q11 Operating Drilling Rigs Development 19% Exploration Offshore Onshore 26% Offshore Onshore 81% 74% 2Q10 3Q10 4Q10 1Q11 Development Exploration Seismic Information During the second quarter of this year, 2D seismic data increased by 99.2% as a result of increased seismic activities intended to identify possible shale gas formations. 3D seismic data increased by 111.9% due to increased exploratory activities in deep waters in the Gulf of Mexico, which were conducted to evaluate the potential drilling in the deep waters in the Gulf of Mexico. 1, , Seismic Information 9, , ,000 10,000 8,000 6,000 4,000 Km 2 Seismic 3D Information 0% 24% 22% 9% 91% 45% Shallow Waters Deep Waters Ixic Tzumat Centauro 200 2Q10 3Q10 4Q10 1Q11 2, D (Km) 3D (Km ) Results Report as of June 30, / 21

7 Discoveries The exploratory activities carried out in different areas of Mexico suggest the drilling potential of the deep waters of the Gulf of Mexico. The Piklis-1 well is located northwest of Coatzacoalcos, found in waters measuring 1,928 meters deep, and was drilled to a total depth of 5,431 meters representing the deepest well drilled to date in México in deep waters. Initial tests suggest the existence of a reservoir of non-associated gas and condensates with potential reserves of approximately million cubic feet. In addition, hydrocarbon discoveries were made in the Burgos, Litoral del Tabasco and Veracruz Assets. The initial production of such discoveries amounts to 4.0 Mbd and 33.4 MMcfd of gas. Main Discoveries April - June, 2011 Project Well Geologic age Initial production Type of hydrocarbon Crude and condensates (bd) Gas (MMcfd) Burgos Bragado-1 Mid Jakson Eocene Wet Gas Lindero-1 Cold Marine Mid Oiigocene Wet Gas Siroco-1 Mid Jakson Eocene Wet Gas Holok-Temoa Piklis-1 Inferior Miocene Wet Gas Litoral de Tabasco Xanab-101 Superior-Mid Cretaceous 3, Light Oil Veracruz Chancarro-1 Superior Miocene 6.1 Dry Gas Total 4, Upstream Projects Bicentenario Platform for Exploration in Deep Waters During the second quarter of 2011, introduced the semi-submersible "Bicentenario" platform which began operating at the Talipau-1 well project and has been drilled at water depths of 945 meters in the southern Gulf of Mexico. In an effort to locate untapped reservoirs and increase Mexico s hydrocarbon reserves, will continue to incorporate new equipment to drill in deep waters, in order to locate new reservoirs and expand Mexico s hydrocarbon reserves. Integrated Contracts The first round of Integrated Contracts for mature fields in the Southern Region is expected to be awarded during the third quarter of These contracts contemplate three areas: Santuario, Carrizo and Magallanes, which together incorporate six fields. During the process, 27 companies have participated and 53 bidding packages have been sold. Petróleos Mexicanos expects to increase its hydrocarbons production platform through projects such as the Integrated Contracts. A second round of bids for mature fields in the Northern Region is expected to be launched during the second half of Results Report as of June 30, / 21

8 Downstream Crude Oil Processing Total crude oil processing decreased by 5.9%, as a result of: Maintenance and repairs in the National Refining System; and Inventory accumulation of residues at the Tula and Salamanca refineries. Primary distillation capacity amounted to 76.4%, due to a lower utilization of plants. Crude oil Processing and petroleum products production (Mbd) 1,418 1,363 1,327 1,319 1, Q10 3Q10 4Q10 1Q11 Light Crude Heavy Crude Petroleum products production Production of Petroleum Products Petroleum products production decreased by 7%, as a result of lower crude oil processing. 1,500 1,250 1, ,319 2Q10 3Q10 4Q10 1Q11 6% 4% 16% 21% Other* Jet Fuel LPG Diesel Fuel oil Automotive gasolines * Includes paraffins, furfural extract, aeroflex, asphalt, lubricants, coke, cyclical light oil and other gasolines. 23% 30% Variable Refining Margin The variable refining margin reached U.S.$1.01 per barrel, U.S.$0.66 per barrel greater than the margin recorded during the second quarter of 2010.This increase is primarily explained by current international market conditions, which continue to be affected by the uprisings in the Middle East and North Africa, as well as the earthquake and resulting tsunami in Japan in March Q10 4Q Results Report as of June 30, / 21

9 MMcfd Mbd Natural Gas Processing and Production Total natural gas processing increased by 1.2%, primarily due to the greater availability of sour wet gas from fields in the Southern Region. Moreover, condensates processing increased due to a greater supply from the Marine and Northern Regions. As a result, dry gas and natural gas production increased by 1.6% and 3.0%, respectively, as compared to the second quarter of Natural Gas Processing (MMcfd) 4,504 4,435 4,383 4,525 4,559 1,081 1, ,042 1,073 3,423 3,413 3,398 3,483 3,486 2Q10 3Q10 4Q10 1Q11 Sour Wet Gas Sweet Wet Gas 3,800 3,600 3,400 3,200 Dry Gas and Natural Gas Liquids Production 3, ,578 3, ,677 3, Q10 3Q10 4Q10 1Q11 Dry Gas from Plants (MMcfd) *Does not include condensate process Natural Gas Liquids (Mbd)* Petrochemicals Production The production of petrochemical products decreased by 8.2%, as a result of the selective channeling of production into the most profitable chains. In this regard, the production in the methane and ethane derivatives chain was favored, while the aromatics and derivatives chain production decreased as a result of a reduction of the gasoline component in manufacturing. These measures have been taken in order to improve the economic results in the chain, and in response to increased input costs. Petrochemicals Production (Mt) 1,607 1,497 1,454 1,474 1, Other* Propylene and Derivatives Aromatics and Derivatives Ethane Derivatives Methane Derivatives Basic 2Q10 3Q10 4Q10 1Q11 *Includes muriatic acid, butadiene, polyethylene wax, petrochemical specialities, BTX liquids, hydrogen, isohexane, pyrolysis liquids, oxygen, CPDI, sulfur, isopropyl alcohol, amorphous gasoline, octane basis gasoline and heavy naphtha. Results Report as of June 30, / 21

10 Downstream Projects Gas Quality has implemented the following measures in order to comply with official gas quality parameters: 1) segregation of currents in the Atasta compression facility, which allow for reductions of nitrogen content in the natural gas to be processed; 2) modifications to Cryogenic Plant II of the Ciudad Pemex Gas Processing Center, which are expected to conclude in December These adjustments will increase nitrogen and natural gas liquids recovery capacity; 3) installation of H 2 S and H 2 O analyzer equipment, as well as chromatographs for gas quality testing; and 4) control of liquefiable contents through dew point control plants at the Veracruz Asset. Stabilization of the Minatitlán Refinery Joint Venture with Mexichem The reconfiguration project of Minatitlán concluded during the second quarter of The production of the new plants is expected to stabilize in the second half of the year. Therefore, an increase in crude oil processing, and production of light and middle distillate petroleum products is expected by the end of the year. filed an approval request with the COFECO (Comisión Federal de Competencia) to form a joint venture with the Mexican company Mexichem. This joint venture would increase s vinyl chloride production, which among others, is used to manufacture polyvinyl chloride (PVC). PVC is used to make a variety of plastic products, including pipelines, wire coating and packaging products. If approved, this joint venture is expected to generate value to and to the national petrochemicals industry. Results Report as of June 30, / 21

11 Financial Results Consolidated income statement Second quarter (Apr.-Jun.) Change 2011 (U.S.$MM) Total sales 313, , % 79,736 33,222 Domestic sales 170, , % 25,568 16,568 Exports 141, , % 53,910 16,523 Services income 1,283 1, % Cost of sales 149, , % 34,167 15,534 Gross income 163, , % 45,569 17,688 General expenses 23,618 24, % 1,165 2,093 Transportation and distribution expenses 8,130 8, % Administrative expenses 15,488 16, % 974 1,391 Operating income (loss) 140, , % 44,404 15,594 Other revenues (expenses) 23,988 48, % 24,371 4,085 IEPS accrued 23,099 52, % 29,041 4,404 Other 889 (3,780) ###### (4,670) (319) Comprehensive financing result (30,719) (3,316) 89.2% 27,403 (280) Profit (loss) sharing in non-consolidated subsidiaries, affiliates and others % (503) 1 Income before taxes and duties 134, , % 95,675 19,400 Taxes and duties 154, , % 66,470 18,632 Net income (20,105) 9, % 29, Sales The 25% sales increase was primarily the result of: an increase of 51.5% in the Mexican crude oil basket, from U.S.$69.86 per barrel in the second quarter of 2010, to U.S.$ per barrel in the same period of 2011; a 0.2% increase in the volume of crude oil exports, from 1,337 Mbd in the second quarter of 2010 to 1,339 in the same quarter of 2011; an increase by 44.7% in the price of regular gasoline in the U.S. Gulf of Mexico, from U.S per gallon to U.S ; higher prices for domestic products sold were recorded, including gasolines, diesel, fuel oil, jet fuel and asphalt; and the former was partially offset by a 7.1% appreciation of the Mexican peso against the U.S. dollar. Total Sales 25.4% 313,574 25,568 53, ,310 2Q10 Domestic sales Exports Services income Results Report as of June 30, / 21

12 Exports Crude Exports by Region (Mbd) 141,708 22,150 13, ,162 2Q % 195,618 21,449 21, ,271 Other Petroleum products Crude oil and condensates 12% 4% 3% 81% 1,339 Mbd United States of America Europe Far East Rest of the Americas Domestic Sales Domestic Sales of Petroleum Products (Mbd) 170,582 7,049 16, , % 196,151 8,627 17, ,330 Petrochemical products Dry gas Petroleum Products 3% 4% 14% 22% 45% 1,791 Mbd Gasolines Fuel Oil Diesel LPG Jet Fuel 2Q10 12% Other Operating Costs and Expenses The increase recorded in cost of sales during the second quarter of 2011 is primarily explained by: 1. an 48% increase in purchases for resale, due to higher hydrocarbon prices and its derivatives; and 2. operating expenses increased due to increases in the costs of personal services, materials, freights and insurance, and guarantee letters. These increased expenses were partially offset by a decrease in the net cost for the period of employee benefits, due to hypothesis adjustments in the actuarial calculation. Transportation and distribution expenses, as well as administrative expenses recorded slight increases of 2.3% and 6%, respectively. These increases are primarily explained by a rise in operating expenses, which were partially offset by a decrease in the net cost of employee benefits for the period. Operating Costs and Expenses 20.4% 34,167 1, , ,358 2Q10 Cost of sales General expenses Results Report as of June 30, / 21

13 Comprehensive Financing Result Comprehensive financing result recorded a decrease of Ps billion as a result of: lower interest expense, primarily due to a one-time extraordinary capitalization of interests, in compliance with the D-6 financial reporting standard, as well as to a favorable position in financial instruments; and a decrease in exchange loss, due to a lower depreciation of the Mexican peso against the U.S. dollar, as compared to the one recorded during the same period of the previous year. Comprehensive Financing Result (3,316) 12,717 (30,719) 14,686 2Q10 Financial income Exchange gain Taxes and Duties The increases in taxes and duties during the second quarter of 2011, are primarily a result of: 1. higher references prices of the Mexican crude oil basket which increased by 51.5% in the second quarter of 2011 as compared to the same period last year, from U.S.$69.86 per barrel to U.S.$ per barrel; and 2. the former was partially offset by the accrued amount of IEPS credit. Evolution of Taxes and Duties Duties 66, ,577 29, ,577 15,259 Total Other duties 154, , ,107 6,872 18,299 21, ,270 Hydrocarbons Duty for the Stabilization Fund Ordinary Hydrocarbons Duty 128,936 2Q10 due Hydrocarbon duties Other taxes due IEPS acreditable payable 2Q10 Results Report as of June 30, / 21

14 Net Income s net income amounted to Ps. 9.1 billion (0.8 billion dollars) as a result of: 1. an increase in sales proportionally higher than the increases of costs and general expenses; 2. an increase in other revenues; and 3. a favorable comprehensive financial result as compared to the one recorded in the second quarter of Net Income 23,868 (35,332) (27,403) (66,470) 79,736 (20,105) 9,100 2Q10 Total sales Other revenues* Cost and operating expenses CFR Taxes and duties * Includes sharing in non-consolidated subisidiaries, affiliates and others. Results Report as of June 30, / 21

15 Consolidated Balance Sheet as of June 30, 2011 Consolidated Balance Sheet As of December 31, As of June 30, Change 2011 (U.S.$MM) Total assets 1,392,715 1,401, % 9, ,415 Current assets 313, , % 60 26,480 Cash and cash equivalents 133, , % (33,285) 8,472 Accounts, notes receivable and other 141, , % 26,542 14,220 Inventories 38,038 44, % 6,803 3,788 of products 32,738 40, % 7,758 3,421 of materials 5,299 4, % (955) 367 Financial instruments Investment in securities 11,116 10, % (197) 922 Property, plant and equipment 1,061,388 1,070, % 9,169 90,427 Other assets 6,782 6, % Total liabilities 1,506,499 1,503, % (2,507) 127,038 Current liabilities 207, , % (1,414) 17,387 Short-term debt 89,555 88, % (1,198) 7,463 Suppliers 43,474 44, % 661 3,728 Accounts and accrued expenses 21,659 14, % (7,621) 1,186 Taxes and duties payable 52,566 59, % 6,744 5,010 Financial instruments Long-term liabilities 1,299,245 1,298, % (1,093) 109,651 Long-term debt 575, , % (33,709) 45,736 Reserve for sundry creditors and 55,493 57, % 1,722 4,833 Reserve for employee benefits 661, , % 31,575 58,531 Deferred taxes 7,216 6, % (681) 552 Total equity (113,783) (102,093) -10.3% 11,691 (8,624) Total liabilities and equity 1,392,715 1,401, % 9, ,415 Results Report as of June 30, / 21

16 Working Capital Working capital remained constant from January 1 to June 30, Short-term debt recorded a decrease of 0.7%, primarily due to a decrease of Ps. 7.6 billion in Accounts and accrued expenses payable, which was offset by an increase of Ps. 6.7 billion in Taxes and duties payable. Working Capital 44,841 88,356 Current assets Current liabilities 168,346 44,136 14,037 59, , ,649 cash & cash equivalents Accounts, notes receivable and other Inventories Short-term debt Suppliers Accounts and accrued expenses payable Taxes and duties payable Working capital Debt Total debt decreased by 5.3% primarily due to: Greater amortizations as compared to financing activities during the first half of An appreciation of the Mexican Peso of 4.2%, during the first half of 2011 (5.3%) Debt 664,725 89,555 69,672 (87,120) (17,459) 629,819 (100,302) 88, , , , ,462 Total Debt 4Q10 Financing Activities* Amortizations Exchange Gain Total Debt Cash & Cash Equivalents Net Debt Net Debt 4Q10 *Includes accrued interest. Long-term Short-term Results Report as of June 30, / 21

17 Debt By currency* By rate* 20.5% 79.5% U.S. dollars Mexican pesos 42.4% 54.6% Fixed Floating *Incluye instrumentos financieros derivados. Average Life (years) Average 6.1 Average 5.4 Other Currencies 6.7 Other Currencies 5.8 USD 5.4 USD 5.5 MXP 3.3 MXP 3.1 As of June 30, 2010 As of June 30, 2011 Financing Activities Capital Markets On May 25, 2011, Petróleos Mexicanos issued U.S.$1.25 billion of its 6.50% Notes paid semi-annually and due on June The proceeds from this transaction were received on June 2, On July 21, 2011, Petróleos Mexicanos reopened U.S.$1.0 billion of its 5.50% Notes due on January 2021, which were issued on July The proceeds from this transaction were received on July 26, The proceeds from these placements will be used to finance investment projects and for debt refinancing. Liquidity Management As of June 30, 2011, Petróleos Mexicanos holds liquidity management credit lines for U.S.$3.5 billion, and U.S.$3.25 billion of which are available. Results Report as of June 30, / 21

18 Consolidated Statements of Cash Flows Change 2011 (U.S.$MM) Net income before income taxes 307, , % 124,357 36,476 Activities related to investing activities: 48,493 55, % 6,819 4,672 Depreciation and amortization 45,771 46, % 1,171 3,965 Impairment of properties, plant and equipment (522) 3, % 4, Profit sharing in non-consolidated subsidiaries and affiliates (114) (283) % (169) (24) Unsuccessful wells 2,007 2, % Unsuscribe of properties, plant and equipment 1,352 1, % Activities related to financing activities: 2,812 (4,303) % (7,116) (363) Income (loss) from foreign exchange fluctuations (19,180) (17,459) 9.0% 1,721 (1,475) Interest income (loss) 21,992 13, % (8,836) 1, , , % 124,060 40,785 Funds provided by (used in) operating activities: (303,871) (419,720) -38.1% (115,849) (35,453) Financial instruments 13,309 (2,662) % (15,970) (225) Accounts and notes receivable (16,291) (32,353) -98.6% (16,062) (2,733) Inventories 3,901 (6,803) % (10,704) (575) Other assets (630) (152) 75.9% 478 (13) Accounts payable and accrued expenses 3, % (2,394) 64 Taxes payable (337,614) (411,789) -22.0% (74,175) (34,783) Suppliers (12,304) % 12, Reserve for sundry creditors and others 4,972 1, % (3,250) 145 Contributions and payments for employees benefits 37,770 31, % (6,195) 2,667 Deferred income taxes (139) (681) % (542) (57) Net cash flow from operating activities 54,919 63, % 8,211 5,332 Investing activities: Acquisition of fixed assets (84,993) (62,498) 26.5% 22,495 (5,279) Net cash flow from investing activities (84,993) (62,498) 26.47% 22,495 (5,279) Cash needs related to financing activities (30,074) % 30, Financing activities: As of June 30, Loans obtained from financial institutions 112,923 67, % (45,916) 5,660 Interest paid (21,696) (12,718) 41.4% 8,978 (1,074) Principal payments on loans (106,741) (87,120) 18.4% 19,621 (7,359) Net cash flow from financing activities (15,513) (32,830) % (17,317) (2,773) Net increase in cash and cash equivalents (45,588) (32,198) 29.4% 13,389 (2,720) Cash and cash equiv. at the beginning of the 159, , % (26,173) 11,284 Effect of changes in the value of cash 1,949 (1,087) % (3,035) (92) Cash and cash equivalents at the end of the period 116, , % (15,819) 8,472 Results Report as of June 30, / 21

19 Below are some items that impacted results in the period: (Ps. Bn) (U.S.$Bn) Cost of the LPG subsidy Not-recognized costs in the price mechanism of gasolines and diesel Decrease in Duties paide tu to recognition of operating cost and expenses incurred in 2011 Economic impact by external and structural efects Six months ending Jun. 30, Labor obligations Incremental taxes Total Other Relevant Events Business Plan s Board of Directors approved in a unanimous vote its Business Plan. The plan underscores s commitment and aim towards achieving sustainable operating and financial goals. Moreover, this plan is aligned with the National Energy Strategy which considers, among other things available financial resources and the outlook of prices on its products. The Business Plan will be sent to the Ministry of Finance for its final authorization. Recovery of the Semisubmersible Platform Jupiter 1 Petróleos Mexicanos and a service provider have concluded the recovery of the semi-submersible platform Jupiter 1, which partially sunk on April 12, 2011, in the Campeche Sound, south of the Gulf of Mexico. More than 2 thousand barrels of diesel and 82 barrels of jet fuel stored in this platform were recovered. In addition, the service provider subcontracted services to carry out the recovery of the platform through its insurance agent. Finally, it is worth noting out that neither production nor activities conducted in the area were negatively affected; and that the recovery was conducted in a proper and timely manner Subsequent monitoring confirmed that no hydrocarbons were spilled in the surrounding areas. Goods and Services Demand Forecast The Director General of Petróleos Mexicanos announced the launch of a new system as part of the company s efforts for increased transparency will reinforce s role as one of the main drivers of Mexico s economic development. This tool will allow to publish its future needs and, at the same time, promote competition within the market. The use of this platform will most likely be relevant to companies making medium term business decisions. will update this forecast on an annual basis in order to carry out infrastructure investment projects, public works and acquisition programs in time. Results Report as of June 30, / 21

20 Fight Against the Illicit Fuel Market and the Mexican authorities have increased their efforts to identify illegal pipeline taps. The company has implemented various monitoring, supervising, and volume-measuring projects. In addition, the combined efforts of the Ministry of National Defense (SEDENA), the Federal Attorney General s Office (PGR), the Ministry of the Navy, and the Policía Federal (Federal Police) have also strengthened surveillance of the national pipeline system. During the first half of 2011, a total of 614 illegal taps were identified. The prompt identification of these taps has reduced the negative economic impact to the company caused by such theft, as well as the danger to nearby communities. In each one of these cases, a criminal report was filed in order to continue with corresponding investigations. Union Labor Contract Agreement On July 27, 2011, Petróleos Mexicanos and the Petroleum Workers Union signed the Union Labor Contract Agreement for The agreement reaffirms the company s commitment to improve working conditions and increase productivity. Thereby making a more solid and competitive company, and establish the grounds for a new phase of growth. Results Report as of June 30, / 21

21 If you would like to be included in our distribution list, please access and then Distribution List. If you would like to contact us, please call or send an to Telephone: (52 55) Voice mail: (52 55) ext Rolando Galindo Galvez Cristina Arista Carmina Moreno Ana Lourdes Benavides Cristina Pérez Variations Cumulative and quarterly variations are calculated comparing the period with the same one of the previous year; unless specified otherwise. Rounding Numbers may not total due to rounding. Financial Information Excluding budgetary and volumetric information, the financial information included in this report is based on unaudited consolidated financial statements prepared in accordance with Normas de Información Financiera (Mexican Financial Reporting Standards, or 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," 2009 and 2010 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 the 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 Conversions Convenience translations into U.S. dollars of amounts in Mexican pesos have been made at the established exchange rate, at June 30, 2011, of Ps = U.S.$1.00. Such translations should not be construed as a representation that the Mexican peso amounts have been or could be converted into U.S. dollars at the foregoing or any other rate. Fiscal Regime Since January 1, 2006, 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 s current fiscal regime, the Special Tax on Production and Services (IEPS) applicable to gasoline and diesel is regulated under the Federal Income Law. is an intermediary between the Secretary of Finance and Public Credit (SHCP) and the final consumer; 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. 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 the difference among them. The IEPS credit amount is accrued, whereas the information generally presented by the SHCP is cash-flow. Hydrocarbon Reserves Pursuant to Article 10 of the Regulatory Law to Article 27 of the Political Constitution of the United Mexican States Concerning Petroleum Affairs, (i) '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 Bids No awards for amounts higher than Ps billion were assigned. For further information, please access Forward-looking statements This 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; and 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 s most recent Form 20-F filing with the SEC ( and the prospectus filed with the 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. 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 Comercio Internacional, S.A. de C.V., Pemex s international trading arm. Results Report as of June 30, / 21