Investor Presentation February 1, 2017 Content Current Status 1 - - PowerPoint PPT Presentation

February 1, 2017

Investor Presentation

Content

Current Status PEMEX 2016 Business Plan 2017 Outlook

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Key Player in the Oil Industry

2.2 2.3 2.6 2.9 3.1 3.2 3.3 3.5 3.9 11.9 Petrobras Exxon PEMEX PDV KPC CNPC Rosneft INOC NIOC Saudi Aramco Main Crude Oil Producers1

MMbd

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1 Petroleum Intelligence Weekly (PIW) 2015, The World’s Top 50 Oil Companies.

E&P Investment Evolution

Billion pesos (current)

50 100 150 200 250 300 350 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

PEMEX Crude Oil Production

MMbd

∆+54% ∆-38%

Onshore Other offshore

Our Infrastructure

5.9 5.0 4.6 3.2 3.1 3.0 2.7 2.4 2.2 2.1 2.0 1.9 1.8 1.8 Sinopec Exxon CNPC Shell Saudi Aramco Valero PDV Petrobras Total Phillips Rosneft BP Chevron PEMEX Refining Capacity1 MMbd

1 Petroleum Intelligence Weekly (PIW) 2015, The World’s Top 50 Oil Companies.

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6 refineries in Mexico and 1 in the US 9 gas processing centers

8th onshore drilling company 15th logistics company (by assets) 258 operating platforms 9,000 wells More than 40,000 km of pipelines 74 storage and distribution terminals 16 ships Close to 1,500 tank trucks

Content

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Current Status PEMEX 2016 Business plan 2017 Outlook

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Year of Financial Stabilization

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* Financial balance results from the subtraction of the total expenditures (including financial cost) from the total income

Execution of the MXN 100 billion budget adjustment

• Generate efficiencies and reduce costs MXN 35 billion
• Defer / reassess investments MXN 64.9 billion
• CAPEX & OPEX adjustment to focus on profitable activities

under a low hydrocarbons price scenario MXN 6.2 billion Federal Government support measures

• Cash flow injection MXN 73.5 billion
• Fiscal benefit MXN 38.5 billion
• Pension liability assumption MXN 184.2 billion

Financial balance improved by approximately 1/3*

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100% of suppliers accounts payable MXN 147 billion

• Payment prioritization according to the size of the company

Strengthening of the financial structure

• Measures positively received by the markets
• Decrease in PEMEX risk
• Permanent access to different markets

New business models under the Energy Reform

• Non-strategic asset divestment (GdC)
• Trión farmout with BHP Billiton
• JV with Chevron & Inpex (Perdido area block 3)

Year of Financial Stabilization

Progress Made in Deep Waters

▪ PEMEX has invested

approximately MXN 50 billion in the Perdido area, with discoveries of 3P reserves above 1,600 MMboe

▪ Fields: Trión, Supremus,

Maximino, Exploratus y Nobilis

▪ PEMEX will develop deep

water projects through farmouts

1 Reserva asociada a Trión, Supremus, Maximino, Exploratus y Nobilis 2 Reservas 3P PEMEX’s Assignments Trión Farmout Round 1.4 Deep Waters Oil and Gas Field 3D Seismeic

Perdido Area – 21 Assignments Including Trión

First Deep-Water Farmout

• Trión was discovered in 2012 and will be farmed out to accelerate its development,

considering its strategic location near deep water projects in the US Gulf of Mexico

1 First 60 months: MXN 1,175.42 / km2. Beginning month 61 and until termination: MXN 2,810.78/ km2

▪ Additional royalty: 4% ▪ Tie-break criteria:

– Additional carry offered by winner paid as follows:

• 10% signing bonus to the Mexican Oil Fund
• 90% in favor of PEMEX

Base Contract Conditions

▪ BHP Billiton / PEMEX: 60% / 40% ▪ Duration: 35-50 years ▪ Minimum carry: USD 570 MM ▪ Minimum requirement:

– 1,250 km2 of 3D seismeic – 1 exploratory well – 1 delineation well

▪ Royalties & Duties

– Contractual fee – Exploratory Phase1 – Royalties as a percentage of the

value of hydrocarbons extracted. Varies according to prices

Awarding Variables Exploration & Extraction Contract Technical data

▪ 3P reserves: 485 Mmboe ▪ Water depth: 2,532 m ▪ Estimated investment: USD 10-11 bn ▪ Type of hydrocarbon: Light crude oil ▪ Initial production: 2023 ▪ Estimated production: 120 Mbd

BHP Billiton will cover up to USD 1.9 bn before PEMEX makes additional contributions…

9 MMUSD

Basic royalty 7.5% Additional royalty 4.0% Minimum carry 570.0 Cash amount proposed as a tie-breaking criteria1 624.0 Signing bonus payable to the Mexican Oil Fund 62.4 Additional carry in favor of PEMEX 561.6

1 According to clause 17.4 of the bidding rules 2 in accordance with the definitions established in the Joint Operating Agreement

570 561.6 USD 1,974 million2 0.4

• PEMEX would make additional contributions to the joint account until 2020-2021
• Contract to be signed during the first week of March 2017
• PEMEX’s investment before achieving initial production is estimated at USD 600 million

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• The contract considers 3,374 work units, equivalent to USD 3.4 million
• No wells were compromised for this contract
• Contract to be signed during the second week of March 2017

Technical data Block area (km2) 2,977 Prospective resources (mmboe) 3,437.3 Type of hydrocarbon Extra-light crude oil Light crude oil Wet gas Association PEMEX E&P 33.33% Chevron Energía de México 33.33% Inpex Corporation 33.33% Basic royalty 7.50% Additional royalty 7.44%

Pemex's First Deep-Water JV

Perdido Fold Belt

Block 3 North

PEMEX’s Assignments Trión Farmout Round 1.4 Deep Waters Oil and Gas Field 3D Seismeic

Positive Trend

• 20,000
• 15,000
• 10,000
• 5,000

5,000 10,000 15,000 20,000 1T12 2T12 3T12 4T12 1T13 2T13 3T13 4T13 1T14 2T14 3T14 4T14 1T15 2T15 3T15 4T15 1T16 2T16 3T16 Operating Income USD millions

• 12,000
• 10,000
• 8,000
• 6,000
• 4,000
• 2,000

2,000 4,000 1T12 2T12 3T12 4T12 1T13 2T13 3T13 4T13 1T14 2T14 3T14 4T14 1T15 2T15 3T15 4T15 1T16 2T16 3T16 Net Result USD millions

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 ene-09 may-09 sep-09 ene-10 may-10 sep-10 ene-11 may-11 sep-11 ene-12 may-12 sep-12 ene-13 may-13 sep-13 ene-14 may-14 sep-14 ene-15 may-15 sep-15 ene-16 may-16 sep-16

Average Duration of Debt

7.60 5.00 5.50 6.00 6.50 7.00 7.50 8.00 sep-11 ene-12 may-12 sep-12 ene-13 may-13 sep-13 ene-14 may-14 sep-14 ene-15 may-15 sep-15 ene-16 may-16 sep-16

Consolidated Historical Cash Balance USD millions Years

• PEMEX’s portfolio strategy has prioritized the development of new sources of financing to

diversify the its investor base and currencies

• To reduce external impacts, the company has chosen a hedging strategy that matches its

U.S. dollar-based income structure

By Currency By Interest Rate By Instrument

By Currency Exposure

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68% 11% 3% 1% 2% 14% 1% Dollar Australian dollar Euro UDIS British pound Yen Peso Swiss franc 77% 23% Fixed Floating 66% 12% 5% 4% 5% 5% 3% International Bonds Cebures ECAs

• Int. Bank Loans

Domestic Bank Loans Revolving Credit Others 82% 16% 1% 1% Dollar Peso UDIS Yen

Nota: As of September 30, 2016, total financial debt was USD 98.1 billion. Sums may not total due to rounding.

Debt Profile

150 200 250 300 350 400 ene-16 may-16 sep-16 ene-17 Pemex vs UMS 10a PEMEX vs Mbono 10a

Financing Access and Active Debt Management

• Markets have reacted positively. However, local market lags compared to international

market

• PEMEX has recorded a rally against its main benchmarks in USD, showing a reduction of

around 159 bps during the year

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150 170 190 210 230 250 270 290 310 330 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 ene-2016 abr-2016 jul-2016

• ct-2016

ene-2017 Puntos base Rendimiento al vencimiento (%) Pemex vs UMS 5a Pemex 5a USD

PEMEX USD 5Y PEMEX vs. UMS 10Y

Source: Bloomberg

Maintained Access to Financial Markets

February March June July October USD 5 billion

Rate 6.5%

USD 2.5 billion USD 380 million USD 760 million USD 5.6 billion

Rate 4.3% Rate 1.8% Rate 0.5% Rate 5.6%

Demand exceeded by 3.5x Demand exceeded by 2.7x Minimum nominal rate reached in any currency First operation of this kind since 2007 Improves amortization profile

Active Debt Management December USD 5.5 billion

Rate 6.1%

2017 pre-funding

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Content

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Current Status PEMEX 2016 Business Plan 2017 Outlook

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• 2017 marks an inflection point in recent trends

 Does not consider additional revenues from divestments  Maintain cost reduction discipline implemented in 2016. Increase in productivity is documented individually  Additional cash flow from the execution of JVs will be used to improved the company’s cash position

Business Plan 2016-2021 Conservative Assumptions

55 58 59 60 61 42 54 55 57 56 48 56 68 71 71 40 50 60 70 80 2017 2018 2019 2020 2021 Crude Oil Price1 USD per barrel

BRENT futuros PEMEX PETROBRAS

5.2% 5.4% 5.5% 5.6% 5.6% 5.2% 5.4% 5.6% 5.8% 2017 2018 2019 2020 2021 PEMEX’s Funding Cost 1. Primary surplus: MXN 8.4 billion 2. Reachable production goal: 1,944 Mbd 3. Conservative price projection: 42 USD/b

1 Source: Bloomberg (October) & Pemex

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2017

Business Plan 2016-2021 Financial Outlook

• Pemex Exploration and Production
• Concentrates on assignments that are

profitable after taxes

• Pemex Industrial Transformation
• Partnerships in operation of auxiliary

activities and revamps of refineries.

• Operational discipline and reliability.
• Cost efficiency and gradual

acknowledgment of opportunity costs in transportation prices

• Pemex Logistics
• Open season
• Concentrates on profitable business lines

Business Plan scenario

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• Pemex Exploration and Production
• Aggressive farmout program
• Development of fields that are profitable

for the country and which, under similar fiscal conditions than privates, are profitable for PEMEX after taxes

• Incremental

income from farmout production is shared between PEMEX and the Federal Government

• Federal Government’s earnings increase
• PEMEX improves its cash flow

Improved scenario

• 32
• 58
• 40
• 49
• 36
• 133
• 147 -149
• 94
• 84
• 64
• 1

43

• 35

3 92 145

• 200
• 150
• 100
• 50

50 100 150 2009 2011 2013 2015 2017 2019 2021 Financial Balance MXN billion

Business Plan Improved 632 665 783 787 841 1,143 1,493 1,794 1,863 1,904 1,978 1,990 1,956 1,863 1,854 1,860 1,776 1,638

500 1,000 1,500 2,000 2,500 2009 2011 2013 2015 2017 2019 2021 Consolidated Debt MXN billion

Business Plan Improved

17 17 2,601 2,577 2,553 2,548 2,522 2,429 2,267 2,130 1,944 1,811 1,780 1,805 1,880 195 257 267 316 500 1,000 1,500 2,000 2,500 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Crude Oil Production Mbd Improved Business Plan Improved Business Plan

• The challenge is to reverse the economic and operational losses of close to MXN 100 billion

5.7 4.2 3.4 9.2 12.2 10.7 10.1 11.2 12.7 5 10 15 2007 2008 2009 2010 2011 2012 2013 2014 2015 Non-Scheduled Shutdowns Index % International reference (goal) 77.7 76.9 76.9 71.0 68.6 66.1 61.3 50 60 70 80 90 2004 2006 2008 2010 2012 2014 2015 Equivalent Distillation Capacity Usage % International reference (1Q) International reference (4Q) 63% 20% 3% 3% 11% Main Causes for Non-Scheduled Shutdowns 20161 Hidrogen supply Equipment and proceses CFE Repairement delays Service supply (vapor, water, electricity)

1 From January to August 2016

Pemex Industrial Transformation: Operational Diagnosis

Financial Balance 2025 Partnerships Safe and reliable

• perations

Acknowledgmen t and efficiency in transportation costs Stolen Product Result Impact of the Strategic Initiatives on the Financial Balance until 2025 (MXN billion in cash flow)

• Auxiliary

activities

• (hydrogen,

water, etc.)

• Reconfiguring

and operating refineries

• Timely attention

to risk factors

• Revert the

maintenance lag

• Dynamic price

handling

• Cost efficiency

and internalization

• f import and

transportation costs

• Pipeline

custody

• Terminals
• Illicit markets

(Equivalent to

• 96.3 in 2017)

49.2 41.9 36.2 11

• 108.9

29.4

• 150
• 100
• 50

50

Pemex Industrial Transformation: Strategy

Content

Current Status PEMEX 2016 Business Plan 2017 Outlook

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2017 Financing Programm

Source Domestic debt MXN Bn External Debt USD Bn Approved domestic net indebtedness 28 Approved external net indebtedness 7.1 PROGRAM Domestic market 30 - 70 International markets 2 – 4 2017 Pre-funding 5.5 Total Amortization 2017 52.1 3.5 Net indebtedness (22) – 18 4 – 7 Estimated Financial needs 2017E MXN 95 billion

Net Indebtedness Reduction

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• Authorized debt ceiling for 2017 was reduced to MXN 150 billion, compared to MXN 240 billion

authorized in 2016

• This debt ceiling greater than the financial needs, grants flexibility to pre-fund 2018 requirements

while it also consolidates liquidity

24 45 62 223 195 232 95 55

2011 2012 2013 2014 2015 2016 2017 e

Net Indebtedness MXN billion

• e. Net indebtedness authorized by the Congress.

Financial needs Debt Limit

* Exchange rate 20 MXN / USD. Numbers may not total due to rounding.

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2017 Expenditure Program

• CAPEX for 2017 and its allocation is in line with 2016’s figures

82.3% 10.4% 1.3% 2.2% 0.2% 0.9% 2.6% CAPEX

Corporate Ethylene Fertilizers Logistics Perforation Industrial Transformation E&P

52% 48% CAPEX & OPEX 100% = 391.9 MXN MMM

CAPEX OPEX

100% = 204.6 MXN MMM

2017 Business Outlook

2.1 Shallow waters E & P Field Type Blocks Tender 15 Production sharing contracts

• Jun. 19, 2017

2.2 On-shore fields E & P 12 Licenses

• Jul. 12, 2017

2.3 On-shore fields E & P 14 Licenses

• Jul. 12, 2017

Ayín-Batsil Farm outs PEMEX Ogarrio y Cárdenas-Mora To be confirmed

E&P Industrial Transformation  Liberalization of gasoline and diesel prices  Associations for refineries reconfiguration and supply of auxiliary services Logistics  Open season of pipelines

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Farmout Ayín-Batsil

• Located in the Campeche Sound, 70 km from

Cantarell and Ku-Malob-Zaap

• 5 fields: Ayín, Batsil, Alux, Hap and Makech
• 3 exploration areas: Ichal-1, Ken-1 and Chelpul-1

Ayín-Batsil

Year of discovery 1991 Ayín & 2015 Batsil 3P Reserves 359 Mmboe Water depth Up to 180 m Estimated Investment USD 4.2 billion Type of hydrocarbon Heavy crude oil Estimated production 60-70 Mbd

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Farmouts Ogarrio & Cárdenas-Mora

Cárdenas Mora (Mature on-shore field) Location Tabasco, 62 km from Villahermosa Estimated production 8.1 Mbd 3P Reserves 94.3 MMbpce Type of hydrocarbon Extra-light crude oil Ogarrio (Mature on-shore field) Location Tabasco, 65 km from Coatzacoalcos Estimated production 7.9 Mbd 3P Reserves 54 MMbpce Type of hydrocarbon Light crude oil

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Gasoline and Diesel Price Liberalization

26 Open season auction result: February 15, 2017 Price liberalization: March 30,2017

• Baja California
• Sonora

Open season auction result: May 1, 2017 Price liberalization: June 15, 2017

• Chihuahua
• Coahuila
• Nuevo León
• Tamaulipas
• Gómez Palacio, Dgo.

Open season auction result: Sep. 14, 2017 Price liberalization: October 30, 2017

• Baja California Sur
• Durango (excepto Gómez Palacio)
• Sinaloa

Open season auction result: October 16, 2017 Price liberalization: November 30, 2017

• Aguascalientes
• Ciudad de México
• Colima
• Chiapas
• Estado de México
• Guanajuato
• Guerrero
• Hidalgo
• Jalisco
• Michoacán
• Morelos
• Nayarit
• Puebla
• Querétaro
• San Luis

Potosí

• Oaxaca
• Tabasco
• Tlaxcala
• Veracruz
• Zacatecas

Open season auction result: November 15,2017 Price liberalization: December 30, 2017

• Campeche
• Quintana Roo
• Yucatán

1 2 3 4 5

Fundamentals of Gasoline and Diesel Prices

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Taxes Distribution costs Supply costs Reference price adjusted by quality IEPS tax VAT Commercial margin Transportation Storage Logistics International reference price, Houston, TX Quality adjustment

• This price scheme

recognizes the total expenses incurred in the sale of petroleum products

• Opening the market to

new competitors, will allow PEMEX to focus on more profitable markets

Investment Considerations

Today

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Strategic company in Mexico and worldwide Stable Finances Energy Reform: historic

• pportunity

Implementation

• f new business

schemes Financial Balance 2020-2021

Investor Relations (+52 55) 1944-9700 ri@pemex.com www.pemex.com/en/investors