Presentation is loading. Please wait.

Presentation is loading. Please wait.

Unidad de Asuntos Internacionales y Promoción de Inversiones.

Similar presentations


Presentation on theme: "Unidad de Asuntos Internacionales y Promoción de Inversiones."— Presentation transcript:

1 Unidad de Asuntos Internacionales y Promoción de Inversiones

2 2 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.US Securities and Exchange CommissionMexican Stock Exchange 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 or Marina Nacional 329 Floor 38 Col. Huasteca, Mexico City or at (+52 55) You can also obtain this Form from the SEC by calling SEC-0330.www.pemex.com

3 Unidad de Asuntos Internacionales y Promoción de Inversiones I.The road to Mexicos energy reform II.The reform in brief 1.The reforms two pillars 2.Affected energy laws and bills 3.New provisions in the energy laws III.Expected results IV.Conclusions

4 Unidad de Asuntos Internacionales y Promoción de Inversiones I.The road to Mexicos energy reform II.The reform in brief 1.The reforms two pillars 2.Affected energy laws and bills 3.New provisions in the energy laws III.Expected results IV.Conclusions

5 Unidad de Asuntos Internacionales y Promoción de Inversiones 5 The Office of the President requested in 2007 a diagnose of Pemexs 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 Source: Sener with data from the approved reform initiatives

6 Unidad de Asuntos Internacionales y Promoción de Inversiones Production drop Reserves decrease Reduced restitution rate Low field recovery rate Growth in imports of refined products Insufficient transport, storage and distribution infrastructure 6

7 Unidad de Asuntos Internacionales y Promoción de Inversiones 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

8 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 May 13 th through July 22 nd : The Senates discussion forums take place 2007 – President Calderon requests a Pemex diagnose March 31 st : Senerpublishes the Diagnose of the national oil industry April 8 th: The Executive Power delivers the Senate reform proposals associated to the oil industry May 19 th : The Executive Power sends a proposal to the Senate with a new fiscal regime for Pemex for complex oil fields July 23 rd : The PRI presents its proposal for an energy reform August 13 th : The PVEM presents its proposal on renewable sources of energy August 25 th : The FAP presents its reform initiative October 23 rd through 28 th : THE CONGRESS APROVES THE LAW AND REFORM INITIAVIVES April 9 th : The Senate initiates the discussion to celebrate a national debate with the topic of an energy reform June 23 rd through 27 th : The National University (UNAM) organized forums on the energy reform August 20 th : The PRI modifies its Party Statements on energy matters September 2 nd : Senators from the PAN present an initiative for a new law on sustainable use of energy October 9 th through 23 rd : The Congress discusses the different reform proposals

9 Unidad de Asuntos Internacionales y Promoción de Inversiones I.The road to Mexicos energy reform II.The reform in brief 1.The reforms two pillars 2.Affected energy laws and bills 3.New provisions in the energy laws III.Expected results IV.Conclusions

10 Unidad de Asuntos Internacionales y Promoción de Inversiones Regulator strengthening and change in Fiscal Regime To increase investment capacities To increase investment capacities To incorporate State of the Art technology To incorporate State of the Art technology Oil pillar CHALLENGES To increase execution capacities and efficiency To increase execution capacities and efficiency Flexible contracts Management autonomy Transparency and accountability Transparency and accountability Pemex strengthening CHANGES National content promotion promotion To achieve the Energy Transition To achieve the Energy Transition Transition pillar Renewables Sustainable energy

11 Unidad de Asuntos Internacionales y Promoción de Inversiones I.The road to Mexicos energy reform II.The reform in brief 1.The reforms two pillars 2.Affected energy laws and bills 3.New provisions in the energy laws III.Expected results IV.Conclusions

12 Unidad de Asuntos Internacionales y Promoción de Inversiones Promotion of renewable sources of energy and the sustainable use of energy: 1. New Law for the Sustainable Use of Energy 2. 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 Pemex 7. Regulatory Law of the Constitutional Article 27 relating to Oil Matters 8. Law of Federal Rights Source: Sener with data from the approved reform initiatives

13 Unidad de Asuntos Internacionales y Promoción de Inversiones I.The road to Mexicos energy reform II.The reform in brief 1.The reforms two pillars 2.Affected energy laws and bills 3.New provisions in the energy laws III.Expected results IV.Conclusions

14 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 Source: Sener with data from the approved reform initiatives

15 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 Source: Sener with data from the approved reform initiatives

16 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 Source: Sener with data from the approved reform initiatives

17 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 Source: Sener with data from the approved reform initiatives

18 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 Source: Sener with data from the approved reform initiatives

19 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 Source: Sener with data from the approved reform initiatives

20 Unidad de Asuntos Internacionales y Promoción de Inversiones 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

21 Unidad de Asuntos Internacionales y Promoción de Inversiones 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

22 Unidad de Asuntos Internacionales y Promoción de Inversiones 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

23 Unidad de Asuntos Internacionales y Promoción de Inversiones 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 companys sales 23

24 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 Source: Sener with data from the approved reform initiatives

25 Unidad de Asuntos Internacionales y Promoción de Inversiones 25 Modified in 2005, 2007 and Base shifts from gross to net Efficiency Recognizes differences in oil returns : Gas vs. oil Chicontepec vs. deep waters Follows international practices Source: Sener with data from the approved reform initiatives

26 Unidad de Asuntos Internacionales y Promoción de Inversiones I.The road to Mexicos energy reform II.The reform in brief 1.The reforms two pillars 2.Affected energy laws and bills 3.New provisions in the energy laws III.Expected results IV.Conclusions

27 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 Selected States Employment (thousand jobs accumulated by 2025) Strengthening of economic growth (GDP additional points, %) Total Source: Sener with prospective data**

28 Unidad de Asuntos Internacionales y Promoción de Inversiones 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 Source: Sener with prospective data**

29 Unidad de Asuntos Internacionales y Promoción de Inversiones Crude oil production (thousand barrels per day) Crude oil production per capita (barrels) Source: Sener with prospective data** Inertial With reform

30 Unidad de Asuntos Internacionales y Promoción de Inversiones Production from new projects with the reform (thousand barrels per day) Production value from new projects with the reform (millions of pesos) *MME: 75 d/b and exchange rate of 13 pesos per dollar Source: Sener with prospective data**

31 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) Source: Sener with prospective data**

32 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. Production and internal demand of gasoline (thousand barrels per day) This will allow to maintain a positive trade balance for the sector. Source: Sener with prospective data**

33 Unidad de Asuntos Internacionales y Promoción de Inversiones Feedstock for the petrochemical industry with reform (thousand million US dollars) Feedstock includes light naphtha and propane. Feedstock for the petrochemical industry with the reform (thousand barrels per day) Source: Sener with prospective data**

34 Unidad de Asuntos Internacionales y Promoción de Inversiones 34 On October 28th, 2008, the Mexican Congress passed several amendments to Mexican laws related to the energy sector. 1.Four law decrees 2.Four law amendment decrees These amendments will enter into force as soon as they are published in the Official Gazette The amendments provide the necessary mechanisms to allow Mexico's state-owned oil company (Pemex), and other Mexican energy authorities, to face the new technological, economic and environmental realities of the world. Their aim is to increase the production of oil, gas, byproducts, refined products and reserves restitution rates, as well as to encourage the sustainable use of energy and of renewable sources. Source: Sener

35 Unidad de Asuntos Internacionales y Promoción de Inversiones I.The road to Mexicos energy reform II.The reform in brief 1.The reforms two pillars 2.Affected energy laws and bills 3.New provisions in the energy laws III.Expected results IV.Conclusions

36 Unidad de Asuntos Internacionales y Promoción de Inversiones 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 sectors 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

37 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.

38 Unidad de Asuntos Internacionales y Promoción de Inversiones

39 It is estimated that the Ethylene XXI project will generate between 2,400 and 6,500 jobs during its construction and 3,000 permanent jobs. The resulting production will reduce de petrochemical imports to have local supply of 75% in high density polyethylene, 87% in low density polyethylene and 11% in polypropylene. Ethylene XXI investment per line (million pesos) This equals 53% of the total investments executed by the state and private investors in the sector between Imports covered with Ethylene XXI production (percentage from 2006 imports) Source: Sener

40 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. Source: Sener with data from the approved reform initiatives

41 Unidad de Asuntos Internacionales y Promoción de Inversiones 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 companys (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 Source: Sener with data from the approved reform initiatives

42 Unidad de Asuntos Internacionales y Promoción de Inversiones 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. 1 st 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. 2 nd & 3 rd 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 2 nd year on, Pemex has freedom to allocate debt, under the budgetary roof authorized by Congress. During the 3 rd year, Pemex shall put out bonds that represent 3% of the total debt and the primary balance restriction is released. 4 th & 5 th 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 5 th year Pemex shall put out bonds that represent 5% of the total debt and the pensions restriction is released. 6 th year: 87.5% (at least, 15 thousand Mdp) from the excess revenues and 100% during the 7 th year; both years with budgetary freedom. Pemex must use the revenues to meet the Business Plan goals (except in the 6 th year), the financial balance and to avoid increase the personal expenses budget. Source: Sener with data from the approved reform initiatives


Download ppt "Unidad de Asuntos Internacionales y Promoción de Inversiones."

Similar presentations


Ads by Google