ADJUST COST STRUCTURE AND BUSINESS STRATEGY TO A LOW OIL PRICE SCENARIO
THE HISTORIC OPPORTUNITY
THE ENERGY REFORM
2016
FINANCIAL OUTLOOK
Today Pemex has
STABLE FINANCES
1. BUDGET ADJUSTMENT 2. STRENGTHENING OF THE FINANCIAL BALANCE 3. INCREASED ACCESS TO FINANCIAL MARKETS AND ACTIVE LIABILITY MANAGEMENT 4. IN 2017 PEMEX WILL ACHIEVE A PRIMARY SURPLUS
STABLE FINANCES
Like all other oil companies in the world, Pemex reacted to the low price environment Percentage change
Today Pemex has
1. BUDGET ADJUSTMENT
Bhpbilliton
0% -20% -40% -60% -80%
-71%
Conocophillips
-68%
Ecopetrol
-58%
-45%
Exxonmobil
-40%
Petrobras
Statoil
Shell
Bp
Chevron
-37%
-35%
-30%
-29%
-27%
Today Pemex has
STABLE FINANCES
PEMEX WILL MEET ITS 100 BILLION PESOS BUDGET ADJUSTMENT Adjust portfolio to profitable investments: 6 billion pesos. Reassess investments without compromising future production using the tools and flexibility provided by the Energy Reform: 65 billion pesos. Generate efficiencies and cost reduction: 29 billion pesos.
TRANSPARENCY IN PROCUREMENT
CORPORATE AUSTERITY % OF THE TOTAL PURCHASED AMOUNT
STABLE FINANCES
Generate efficiencies and costs reduction: 29 billion pesos NUMBER OF POSITIONS
Today Pemex has
1. BUDGET ADJUSTMENT
(DIRECT AWARDS)
SAVINGS PROJECTION
GOAL 29 PROJECTION
35 BILLION PESOS
Today Pemex has
STABLE FINANCES
2. STRENGTHENING OF THE FINANCIAL BALANCE
PENSION REFORM FEDERAL GOVERNMENT SUPPORT MEASURES
Today Pemex has
STABLE FINANCES
2. STRENGTHENING OF THE FINANCIAL BALANCE PENSION CASH FLOW FISCAL LIABILITY SUPPORT INJECTION BENEFIT
73 BILLION PESOS
39 BILLION PESOS
184 BILLION PESOS
Today Pemex has
STABLE FINANCES
THE MARKETS HAVE RESPONDED POSITIVELY DECREASE IN THE SPREAD BETWEEN PEMEX’S AND MEXICO’S SOVEREIGN BOND BY
148 BASIS POINTS
Today Pemex has
STABLE FINANCES
MOST IMPORTANT EMISSIONS January
March
June
July
October ACTIVE LIABILITY MANAGEMENT
USD 5 Billion
USD 2.5 Billion
USD 380 Million
USD 760 Million
USD 5.6 Billion
RATE 6.5%
RATE 4.3%
RATE 1.8%
RATE 0.5%
RATE 5.6%
2017 CHANGE IN TRENDS Primary Surplus
8.4 Billion pesos
Attainable Production Platform
1.944 million barrels per day
Conservative Price Projections
42 dollars per barrel
SHORT TERM
MEDIUM TERM
IMPROVEMENTS PROFITABILITY IN COSTS AND APPROACH EFFICIENCY
ACCELERATING THE IMPLEMENTATION OF THE ENERGY REFORM
FINANCIAL BALANCE (BILLIONS OF PESOS) BUSINESS PLAN
IMPROVED
CONSOLIDATED DEBT (BILLIONS OF PESOS)
BUSINESS PLAN
IMPROVED
OIL PRODUCTION (THOUSANDS OF BARRELS PER DAY)
BUSINESS PLAN
IMPROVED
FINANCIAL BALANCE (BILLIONS OF PESOS)
CONSOLIDATED DEBT (BILLIONS OF PESOS)
Realistic Scenarios
2017-2021 BUSINESS PLAN IMPROVED
OIL PRODUCTION
(THOUSANDS OF BARRELS PER DAY)
THE CHALLENGE REPLACE CANTARELL’S DROP IN PRODUCTION
FARMOUTS
Aggressive farmout strategy Pemex develops fields that are profitable for the country
IMPROVED
Pemex and the State share improved farmout profits Government improves profits in real terms and Pemex improves its cash flows
Billions of pesos
BUSINESS PLAN
Continued cost reduction and administrative discipline Focus on profitable entitlements after taxes
80 60 40 20 0 -20 -40 -60 -80 -100 -120
PEP´S FLOWS WITH PEMEX´S TOTAL DEBT
2017
2018
2019
2020 2021
INVESTMENTS AND INCORPORATION OF 3P RESERVES
INCORPORATION (MILLIONS OF BARRELS OF OIL EQUIVALENT) INCORPORATION
INVESTMENT
BASE
BASE
INCREMENTAL
INCREMENTAL
INVESTMENT (BILLIONS OF PESOS)
THE CHALLENGE TRANSITION FROM SOLELY SERVICING PEMEX TO COMPETING IN AN OPEN MARKET FOR OTHER COMPANIES’ CONTRACTS
THE OPPORTUNITY IT OWNS THE ASSETS, AND HAS THE PERSONNEL AND KNOWLEDGE ABOUT MEXICAN FIELDS
THE MARKET FOR TRI’s PRODUCTS IS ATTRACTIVE 6th gasoline consumer 9th natural gas consumer 3rd L.P. Gas consumer Good growth perspectives The Energy Reform allows for market liberalization
THE CHALLENGE
THE OPPORTUNITY
REVERSE ECONOMIC AND OPERATIONAL LOSSES
PARTNERSHIPS IN CENTRAL AND AUXILIARY SERVICES CONCENTRATE ON PROFITABLE ACTIVITIES
NON PROGRAMMED SHUT-DOWNS (%)
CAUSES FOR NON PROGRAMMED SHUT-DOWNS
HYDROGEN SUPPLY
SERVICES 11% SUPPLY: VAPOR, WATER AND ELECTRICITY
63% 26%
OTHERS
THE OPPORTUNITY
IMPACT OF THE STRATEGIC INITIATIVES ON THE FINANCIAL BALANCE UNTIL 2025 (BILLION PESOS IN CASH FLOW)
11 29.4
36.2 41.9 49.2 -108.9 Financial balance 2025
Partnerships in auxiliary services and reconfigurations
Safe and reliable operation
Acknowledgement and efficiencies in transport costs
Product theft
Result
CONTEXT ORIENTED TO ENSURE PROVISION WITHOUT TAKING COSTS INTO ACCOUNT AN INFRASTRUCTURE REPERTORY DESIGNED FOR A UNIQUE CLIENT, WITHOUT COMPETITION OR REDUNDANCIES
THE CHALLENGE
THE OPPORTUNITY
BECOME A COMPETITIVE COMPANY
IT HAS ALL THE INFRASTRUCTURE
THE CHALLENGE
THE OPPORTUNITY
ENSURE PROVISION OF RAW MATERIALS
ATTRACTIVE MARGINS
ABSOLUTE COMMITMENT TO ITS WORKERS’ SAFETY
FINAL CONSIDERATIONS
STABLE FINANCES
PEMEX will return to financial equilibrium by 2019/2021 and stabilize its debt.
