safety, health and environmental protectionfaculty.jsd.claremont.edu/emorhardt/137/Corporate Reports...

safety, health and environmental protection

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P ETRÓLEOS MEXICANOS

soc ia l respons ib i l i t ysusta inab le deve lopment

directory

Operations Corporate Management Office

Av. Marina Nacional 329Torre Ejecutiva, piso 35Col. Huasteca,11311Mexico, D.F.

Tel. 55 1944 9071Fax. 55 1944 8946

ThIS REPORT IS AvAILAbLE AT:

www.pemex.com

COMMENTS:

[email protected]

Adiabatic distillationProcess in which heat is supplied externally in the distillation tower to reduce the energy degradation and to diminish the environmental impact of the process.

API SystemsDecantation equipments for oil-water separation.

Aromatic hydrocarbons (AH)hydrocarbons with a cyclic structure that have usually a characteristic odor and possess the chemical properties of good solvents.

Carbon dioxide (CO2)Greenhouse gas produced by oxidation of compounds containing carbon.

CatalystA substance that helps and increases a reaction without being involved in the process. It increases the rate of the reaction at lower temperatures, remaining without change up to the end of the reaction. Nevertheless, in industrial processes, the spent catalyst must be replaced periodically to maintain an efficient production.

Cryogenic processesProcesses with an intensive use of energy to produce high pressures and low temperatures.

PitsConstructions to retain solid and liquid waists produced during well drillings.

Drill cuttingsSoil and rocks removed during exploration and production wells drillings. Oils impregnate cuttings through their contact with drilling muds.

Drilling mudsA mixture of clays, water and chemicals used in drilling operations to lubricate and cool the bit, bring drill cuttings to the surface, prevent well wall from collapsing and to control gas or crude oil upward flow.

Energy intensity rate in refineriesMeasure of energy efficiency in refineries, equivalent to the real energy consumption divided by the international theoretical consumption, taking into account the configuration and use of the refinery.

Floating membranessStorage tank covers that move according to the contained liquid level. They are used to reduce the emissions of hydrocarbons evaporation.

Frequency rateRatio of the number of disabling accidents occurred per million man hours with risk exposure in a given period, without including the accidents occurred on the way to/from work nor those due to third party actions and/or insecure conditions out of PEMEX control reach.

Fugitive emissionsEmissions not caught by a capture system which are often due to equipment leaks, evaporative processes and windblown disturbances. Typically they are considered as those of methane and other non-methane vOCs.

Gravity rateRatio of the number of days lost due to disabling accidents per million risk exposure man work hours in a given period of time, not including the accidents occurred on the way to/from work nor those due to third party actions and/or insecure conditions out of PEMEX control reach.

Greenhouse gases (GHG)Gases contributing to the formation of a thermally insulating layer around the Earth. The main GhG are: water vapor, carbon dioxide, methane, nitrous oxide, and halogenated hydrocarbons.

Heavy chlorinated hydrocarbonshydrocarbon chains in which a varied number of hydrogen atoms has been substituted by chlorine atoms. heavy chlorinated hydrocarbons are those chains containing from four to six chlorine atoms, known as hexachloride compounds.

CONCEPT AND DESIGN

Margara Cortés Chapula

Fernanda Ogarrio Compeán

WRITING AND COPY-EDITING

María Losón de Fábregas

TRANSLATION

Helena Contreras Chacel

PhOTOGRAPhY

PEMEX - Corporate management office of Social Communication

Jorge Contreras Chacel

Eduardo de la Vega

Héctor Elorduy

PRINTED IN MEXICO bY:

Ediciones Gráficas Zeta


www.pemex.com

Luis Ramírez CorzoDIRECTOR GENERAL

Carlos A. Morales GilACTING DIRECTOR GENERAL OF PEMEX

EXPLORATION AND PRODUCTION

Miguel Tame DomínguezACTING DIRECTOR GENERAL OF PEMEX REFINING

Roberto Ramírez SoberónACTING DIRECTOR GENERAL OF PEMEX GAS

AND bASIC PETROChEMICALS

Rafael Beverido LomelínDIRECTOR GENERAL OF PEMEX PETROChEMICALS

Marcos Ramírez SilvaCORPORATE DIRECTOR OF OPERATIONS

Federico Martínez SalasCORPORATE DIRECTOR OF ENGINEERING

AND PROJECTS DEvELOPMENT

Rosendo Villarreal DávilaCORPORATE DIRECTOR OF ADMINISTRATION

Juan José Suárez CoppelCORPORATE DIRECTOR OF FINANCE

José Néstor García RezaGENERAL ATTORNEY

Gregorio Guerrero PozasPEMEX INTERNAL CONTROL bUREAU

Rosendo Zambrano FernándezDIRECTOR GENERAL OF P.M.I. INTERNATIONAL COMMERCE

José Antonio CeballosDIRECTOR GENERAL OF ThE MEXICAN PETROLEUM INSTITUTE

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Heavy metalsMetals that may produce negative effects on flora, fauna or human health, in concentrations above certain limits. Under the Official Mexican Standard, only the following are considered: arsenic, cadmium, copper, chromium, mercury, nickel, lead, zinc, as well as cyanides.

Hexachlorinated residuesSee heavy chlorinated hydrocarbons.

HydrodesulfurizationProcess to eliminate sulfur from the molecules using hydrogen under pressure and a catalyst.

Implementation UnitsGroup of facilities that are defined in the SIASPA implementation framework.

ISO-14001ISO Norm of the International Standardization Organization, referring to environmental management systems.

Liquid recuperatorEquipment installed in pipelines to recover unwanted liquids.

Methane (CH4)It is considered a greenhouse gas. Conventionally it is not included among the gases known as volatile organic compounds.

Nitrogen Oxides (NOx)A generic term for nitrous oxides. These compounds are produced during combustion processes due to oxidation of nitrogen contained in the air. They contribute to the tropospheric ozone formation and that of acid rain.

Oil and grease (O&G)Any solid or viscous substance that can be recuperated to be dissolved in one of the following solvents: n-hexane, trichlorotrifluoroethane, or a blend of 80% n-hexane and 20% methyl tertiary butyl ether.

Oily sludgesSolid wastes with hydrocarbon content, such as solids associated with crude oil, impregnated in the soil and contention systems hydrocarbons sediments (tanks, pits, dams, etc.).

Oily watersWaters containing oil and grease.

Phenolic watersWaters containing phenol.

PhenolsCompounds formed by benzilic radicals associated with Oh- radicals.

PM10 and PM2.5 particlesParticulate matter (PM). Produced, among others by fuel combustion in vehicles and industries, and are part of atmospheric pollution. They are classified according to their diameter in microns (for example: PM10 = 10 microns diameter). Those with a minor diameter are usually more harmful to health, because they can penetrate deeper into the respiratory system.

Polychlorinated biphenyls (PCBs)Chlorinated hydrocarbons. These compounds are structured by a system of benzenic rings, in which a varied number of hydrogen atoms has been substituted by chlorine atoms. The PCbs are used, less and less, as oils in electric current transformers due to their dielectric properties and their ability to dissipate heat. These compounds are toxic, very stable and, therefore, very persistent in nature, because their destruction or degradation is very difficult. One of the few ways to eliminate these compounds is by high temperature controlled incineration.

Secondary energyThe group of fuels derived from primary energy sources, obtained in the transformation plants, with specific characteristics for their final consumption.

Sour gasNatural gas containing sulfidric acid, requiring treatment to be used as a fuel.

glossarySour watersWaters containing sulfidric acid (h2S).

Specific discharge conditionsA set of physical, chemical and biological parameters and their maximum permitted levels in waist water discharges, as determined by the Comisión Nacional del Agua (National Water Commission) for the responsible party or parties for the waist water discharge or for a specific receiving body, with the aim to preserve and control the water quality accordingly to the Ley de Aguas Nacionales (National Waters Law) and its regulations.

Sulfides (in wastewaters)Sulfur compounds present in wastewaters.

Sulfur Oxides (SOx)A generic term for compounds, generated by fuel combustion processes, with sulfur in their composition. They contribute to acid rain phenomenon.

Total non-methanic volatile organic

compounds (TNMVOC)Organic compounds resulting from incomplete combustion of hydrocarbons and that do not contain methane.

Total suspended particles (TSP)Term used to designate the total of particles and particulate matter in the air.

Total suspended solids (TSS)Particles suspended or present in wastewaters. They are held in a micro-fiberglass filtering mean with a 1.5 microns or equivalent pore diameter.

Total volatile organic compounds

(TVOC)They are the sum of the vOCs and the TMNvOCs.

Vapor recuperatorEquipment installed in tanks and fillers to recover hydrocarbons vapors, in facilities or processes with high rates of evaporation.

Volatile organic compounds (VOC)Organic compounds that easily vaporize at room temperature, including several hydrocarbons, oxygenated compounds and compounds with a sulfur content. They are usually grouped into methane and other non-methane vOCs. All vOCs contribute tropospheric ozone formation through a photochemical reaction with nitrogen oxides.

Abbreviations

ASIPAS Auditorías de Seguridad Industrial y Protección Ambiental (Industrial Security and Environmental Protection Audits)bbCOE billions of barrels of Crude Oil Equivalent bCO barrel of Crude OilbCOE barrel of Crude Oil Equivalent. Normalization of the caloric values of different sources of energy referred to the caloric value of a barrel of crude oil.CPG Centro Procesador de Gas (Gas Processing Center)DCO Dirección Corporativa de Operaciones (Operations Corporate Management Office)EbITDA Earnings before Interests, Taxes, Depreciations and AmortizationGRI Global Reporting Initiativelps Liters per SecondMbCOE Millions of barrels of Crude Oil EquivalentMCF Millions of Cubic FeetMDCF Millions of Daily Cubic Feet MTbE Methyl Tertiary butyl EtherMW Mega WatsPEP PEMEX Exploración y Producción (PEMEX Exploration and Production)PGPb PEMEX Gas y Petroquímica básica (PEMEX Gas and basic Petrochemicals)PPQ PEMEX Petroquímica (PEMEX Petrochemicals)PR PEMEX Refinación (PEMEX Refining)

safety, health and environmental protect ion i v

safety, health and environmental protect ion �

Message f rom the Director General 2

Relevant notes about th is report a. Reporting principles i i b. Transparency commitment 4

Petró leos Mexicanos in context 8 a. Infrastructure and main operational results �0 b. Main economic results �� c. Hydrocarbons reserves �2 d. Corporate governance �3 e. Risk management �3

Industr ia l safety a. Personal accidents �4 b. Occupational health 20 c. Spills and leaks in pipelines 22

Environmental performance a. Emissions to air 26 b. Climate change 32 c. Water utilization and discharges 40 d Waste water discharges 42 e. Hazardous waste 48 f. Certifications 52

Socia l responsib i l i ty a. Social development 54 b. Protected natural areas 60 c. Land ecological ordinance 63

Stat is t ica l appendix 66

Concordance wi th GRI f ramework 70

Glossary iv Audi tor ’s report v

Contents

2 annual report 2005

Message from the Director

The year 2005 is a milestone in the way we manage the safety of our operations: with the introduction of an emergency program to reinforce the safety of our personnel, we reduced in 29%, in relation to 2004, the occurrence of employees’ accidents resulting in disabilities, with a total of 1.06 accidents per million of labored man hours, the lowest rate since 2001.

This trend points in the right direction, but the results are still poor: during the year, ten of our fellow oil men and 21 contractor workers lost their lives in work related accidents. Given these circumstances, the best instrument we have to avoid the loss of human lives is the comprehensive management of safety. Therefore, the systematization of the emergency effort, initiated in 2005, is one of our main commitments for the next three years, and rati-fies that our first priority, within our concept of sustainable development, is the safety of our workers.

Sustainable development means also our engagement in the environmental issues. For that purpose our most recent effort has focused in risk detection and suppression, as well as remediation of the environmental damages caused by the transport by pipeline of hydrocar-bons. Throughout 2005, in accordance with our restoration program, we endeavored to repair the damages caused, in December 2004, by the spilling of nearly five thousand barrels of oil into the Coatzacoalcos river. We managed to restore an estimated of 75% in the remedia-tion of soil and sediments on the banks of the Coatzacoalcos river and on the affected mangrove swamp areas.

Likewise, we devoted ourselves to repair over six thousand kilometers of pipelines, espe-cially in Veracruz State, where the works included over 2,400 kilometers of by-passes, to avoid populated areas, and river crossings substitution, to stop the recurrence of leaks in this re-gion. Sustaining this effort to correct the accumulated set back, due to a lack of budget for the maintenance of our pipelines, is an unavoidable commitment of Petróleos Mexicanos.

Being the sole supplier in Mexico of automobile fuels, we understand that our engagement goes beyond the mere guarantee of the supply: we must assume that the viability of our company stands also in being able to meet the quality of the needs of our clients. Therefore, PEMEX seeks to guarantee the supply of automobile fuels with the lowest sulfur content. For that purpose, the greatest challenge, for the coming years, will be the construction and modernization of the processing facilities which will enable us to reduce the sulfur content on gasolines and diesel in more than 90%.

Pemex is immersed in the restatement of its approach as a socially responsible enterprise. At the end of 2005, we agreed to take a decisive step seeking our adhesion to the Global Compact United Nations Organization initiative, its goal being to promote and advance the corporative responsibility and the universal socio-environmental principles, parallel to the operative and commercial globalization.

safety, health and environmental protect ion 3

Message from the Director

Finally, in the economic issues, 2005 was a year of con-trasts: we had the highest yield before taxes in the history of our company, for a total of 506 billion MXP which, com-bined with the total amount of rights and non classifiable charges of 581 billion MXP –also a historical maximum, was a net loss, for the company, of 76 billion MXP.

This financial model is not sustainable: we must understand that in order for Petróleos Mexicanos to remain a company that contributes to the sustainable development of Mexico, it has first to be a financially viable business. In 2005, the Mexican Congress authorized a change to the fiscal regula-tions for the company, which is a first step towards that end. Not withstanding, for the future, the challenge is to widen this change and complement it with a greater man-agement autonomy, allowing PEMEX to implement the best corporate managing practices, in order to be able to maximize the national hydrocarbons value in the context of sustainable development, for the benefit of all Mexicans.

Regarding this report, it is important to point out that, for the first time, it has been prepared according to voluntary international standards used to inform social, environmen-tal and economic performance, in a balanced way. This new procedure has been audited by a recognized third party. Furthermore, we have participated with Transparencia Mexi-cana (Transparency International Mexican chapter) in a joint effort to promote an objective and timely account of the company’s results, which will help to reinforce the trust that PEMEX, an asset of all Mexicans, must guarantee.

Lu is Ramí rez CorzoDi rec to r Genera l

Verification letterindependent from the interest groupsTO ThE READERS OF ThE SUSTAINAbIL ITY REPORT

We have reviewed the social, environmental and, health and safety information’s reliability of the contents of report, with the realization of the following activities:

• Interviews with those in charge of the systems that provided the information of this report• Review of the system used to generate, add and provide the information• Scope’s analysis of the information provided• Double check by sampling of the calculations• Double check by sampling and recalculation of added data at the corporative level• Analysis of the tendencies’ interpretation• Double check by sampling of the information produced by the following subsidiary companies

Based on the work described, we did not find significant deviations or omissions in the reviewed information, nor did we observe other circumstances that could point to inappropriate procedures for securing information.

Other information comprised in the reportWe have reviewed the rest of the information included in the report by:

• Reviewing the internal documentation, as well as that included in the company’s intranet• Reviewing the company’s public information as well as that of third parties • Interviews with the heads of departments and with members of the personnel• Consultations with third parties participating in activities or programs mentioned in the report

Based on the above described work, we have not found significant deviations or omissions in the reviewed informa-tion, nor have we observed other circumstances that would point to the fact that the information expressed in the 2005 sustainability report, are not appropriately expressed.

KPMG Cárdenas Dosal, S.C.

Roberto Cabrera SilesMexico, D.F. May 24th, 2006

1. Report’s content

In order to present a vision of the company’s

behavior during the period 2001 - 2005, this re-

port has been designed according to an index

of contents, similar to those used in previous

annual reports. One of the company’s goals is

to continue widening and moving forward on

the topics included in this report.

2. Independent verification process

According to the range and conditions estab-

lished in the verification report, included here,

the firm KPMG Cárdenas Dosal, S.C. was re-

sponsible for the verification of the data of this

report. The work was carried out by members

of KPMG’s verification international team, from

Mexico, Spain and Holland.

The verification included visits to 11 plants and

three hospitals, during which the information

generation process that feeds the company’s

systems was reviewed, interviews with per-

sonnel from the corporative units and from the

subsidiary companies, as well as a revision of

the safety and environmental protection data

accounting methods.

The conclusions derived from the revision vis-

its are included in the verification report. The

improvement recommendations are included

in a report to the Director’s office, delivered by

KPMG on May 3, 2006. They are in the study

stage by PEMEX Director’s Office.

3. Information’s integration

The SISPA system that enables to achieve the

industrial safety and environment protection

in-line monthly report from each of the work

centers was established in 2001. The informa-

tion is captured in each center and is pro-

cessed and compiled for all the subsidiaries.

This is the statistic base that forms this report

relative to the data about emissions into the

air and water, greenhouse effect gases and,

production and consumption of energy and

crude water.

The safety data was obtained by hand consoli-

dation of the subsidiaries reported information.

4. Range limits of the information

Emissions into the air: these are estimates

based on the EPA AP-42 emissions factor, year

2000 supplement F, as well as on the stoi-

cheiometric calculations based on the oxidizers

thermal currents composition and the burn and

vent, of the sulfur recuperation plants.

Water consumption: the data is limited to the

hard water consumption.

Spills: The recording of leaks and spills is in

a review phase. In this report, only those of

hydrocarbons in pipelines are accounted for by

the recently created Subdirección de Coordi-

nación de Transporte por Ductos (Pipeline

Transport Coordination Assistant Manager’s

Office), a subdivision of the Dirección Corpora-

tiva de Operaciones (Operations Corporate

Management Office).

Frequency and gravity rate: accidents during

transport to/from work, and those caused by

third parties and/or unsafe conditions out of

PEMEX control. The rates reported do not

include after hours worked by non-union

personnel.

I. IntroductionWe have been appointed by Petróleos Mexicanos (PEMEX) to review the information and data relating to safety, health and environmental protection included in their report SAFETY, HEALTH AND ENVIRONMENT ANNUAL REPORT 2005, (from now on the Report) being the Dirección Corporativa de Operaciones de la Compañía (Company’s Operations Corpo-rate Management Office) responsible for its elaboration.

II. ScopeThe efforts and progress reached by PEMEX for the attainment of a more sustainable development.To review the report has been our responsibility, as well as to present its readers with a limited assurance about the following:

• The social, environmental and health and safety data contained in the report have been obtained from sources consid-ered reliable

• The information is adequately supported by internal documents or from third sources.

III. Criteria for the reviewWe have executed our work in accordance to the Standard for Assurance Engagements (ISAE 3000): Assurance Engage-ments other than Audits or Reviews of Historical Financial Information developed by International Auditing and Assurance Standards Board. Besides other requirements this standard requires that:• The team that carries out the work must have the specific professional knowledge, skill and competence, necessary to

understand and review the information included in the report, and that its members fulfill the requirements of the Pro-fessional Ethics Code of IFAC that ensures their independency.

• When an information’s limited assurance is granted, being of a lower level in deepness than a reasonable assurance, enough evidence in documents and in the company’s systems to back up the stated assertions about the company, must be available.

To this day, there are no existent generally accepted principles to carry out reports that reflect a company’s sustainable behavior. PEMEX uses its own criteria when establishing its indicators and their measurement, derived from the Global Guide Reporting Initiative (2002), as well as the way in which it interacts with its interest groups. At the same time, the fact that social and environmental information is subject to limitations due to their own nature, as well as the methods to measure, calculate and estimate, each indicator, must be taken into account. The utilized criteria is detailed in the section “Principles that govern this report”.

About the data regarding financial information and its results, as well as that of outside assurance offered by third parties, our work was limited to checking that these corresponded to information reviewed by those independent third parties.

IV. Completed work and conclusionsSOCIAL , ENvIRONMENTAL, hEALTh AND SAFETY INFORMATIONIn these areas, we have reviewed the contents of this report according to the principles of the AA1000 standard. To this end we have made an analysis of those contents to identify material information for the interest groups. We have founded our review of contents, on the investors’ expectancies, because they are socially responsible and with the highest influ-ence in the sector, on reports with similar characteristics made in PEMEX’s market, on the ethical, environmental and social behavior of the sector’s companies that have an impact on the written press, and on similar matters for which managerial associations as well as the civil society show interest in the area of influence of PEMEX’s market.

Data about the case studies:

They are based on estimates reached by the

heads of the subsidiary companies, following

their technical criteria. Besides a critical scru-

tiny, there are no more documents concerning

these estimates.

Data from previous years:

The data of previous years may be subject to

corrections through the continuous improvement

process of inventories. These corrections are

mainly due to an improvement in the estimation

factors calculation or to the addition of data from

other sources, that went unrecorded previously.

5. Transparencia Mexicana, A.C.’s participation in the preparation of this report

PEMEX requested Transparencia Mexicana,

A.C.’s support in the elaboration of the


report, therefore contributing to the strengthen-

ing of the Mexican society’s trust regarding the

information disclosed by the company.

With this goal in mind, Transparencia Mexicana,

A.C. set up a work group that created a question-

naire’s first draft of fifteen questions related to

the topics included in this report. The question-

naire was sent to PEMEX who answered it, iden-

tifying in each case the support data’s chapter

and section in the report.

The answers were examined and in a session

called for this purpose, evaluated by the work

group, in terms of their importance and of the

information disclosed on this matter.

6. Commitment for the improvement of future reports

PEMEX makes the commitment of a continued

effort in the widening and improvement of the

information it offers the citizens, about a sustain-

able development model in Mexico.

Five years after initiating the operation of the

SISPA, PEMEX will start designing a new infor-

mation system that will increase it’s indicators

number and reliability.

The company will make a special effort to

widen the report’s contents according to the

principles set by Global Reporting Initiative, in its

latest version.

7. Your opinion is important

For suggestions and clarifications about this re-

port contact PEMEX, through the e-mail address:

[email protected]

PEMEX Exploration and Production

PEMEX Gas and Basic Petrochemicals PEMEX Refining PEMEX Petrochemicals Medical Services

Integral Active burgos, Tamaulipas

Gas Processing Centre burgos, Tamaulipas Madero Refinery, Tamaulipas Petrochemical Complex Morelos,

veracruzhospital Regional de Reynosa,Tamaulipas

Drilling Unit Pipeline Sector Offshore terminal Minatitlán Regional hospital, veracruzSeparation and

compression battery Storage and distribution terminal

Pipeline Sector Pipeline Sector

Reporting principles

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Transparency commitment

TRanspaRenCia MexiCana’s RepoRT abouT iTs CoRReLaTion wiTh peMex wiThin The ConTexT of The CoMpany’s RepoRT on inDusTRiaL safeTy, heaLTh anD enviRonMenTaL pRoTeCTion, May 2006

baCKGRounDPEMEX asked Transparencia Mexicana, A.C. for its assistance within the process of elaborating this Report on In-dustrial Safety, Health and Environmental Protection, in order to reinforce the reliance of Mexican society on the published information, and to identify subjects or issues that could be relevant for the Report’s content and should be enclosed to the data validation that PEMEX publishes along with an external audit report.

Transparencia Mexicana, A.C. presented this proposal to its Board of Directors which approved an experimental participation in this project, considering that to identify the reach of this kind of social participation will be a valuable practice for future reports. Transparencia Mexicana’s Board of Directors acknowledged PEMEX opening-up to this matter, and commissioned its executive squad to set up a multidisciplinary work team in order to prepare a ques-tionnaire on issues they would consider that should be attended by PEMEX within its report on Industrial Safety, Health and Environmental Protection.

sCope Convinced that this first effort will allow PEMEX to increase the transparency and accountability over the information published by the company, both parties defined a method for PEMEX to answer the questions asked by the work team, which would be evaluated by Transparencia Mexicana. First of all, Transparencia Mexicana formed a work team which was integrated by Manuel Arango, Humberto Murrieta, Felipe Pérez Cervantes, Luis Rubio and José Sarukhán, as Transparencia Mexicana’s advisors, and by Lorenzo Rosenzweig, Rodolfo Silva Casarín and Fernando Ortiz Monasterio, who acted as technical secretary.

The work team prepared a questionnaire of fifteen questions concerning the topics of the Report. This integrated questionnaire is specially aimed to enlighten Mexican society on their concern about PEMEX operations in these areas. It was sent to PEMEX to be answered. PEMEX answered it, identifying in each answer the sections of the Report in which the information supporting the response can be found. The answers were examined by the work team and, during a session especially summoned for that purpose, they were evaluated, according to their rele-vance and to the available public information on these matters.

ResuLTsThe evaluation of PEMEX’s answers, carried out by the work team, is summarized in the next chart, supported by the commentaries that the work team decided to include in the evaluation. The revision was not meant to verify PEMEX sources and support, which correspond to the external audit contracted for that matter. It was meant to corroborate the accordance of the answers to the questions. The evaluation was sent to PEMEX for its insertion in the Report, which, in our opinion, shows clearly the respect and opening-up to Transparencia Mexicana’s indepen-dency in this experimental collaboration.

f inaL obseRvaTionsWhen it ended its commission, the work team asked Transparencia Mexicana to include the following observations:

1. We applaud PEMEX’s initiative to promote a greater transparency over the preparation and publication of its reports, particularly in the one regarding Industrial Safety, Health and Environmental Protection.

2. In order to achieve a higher scope on PEMEX’s transparency and accountability, and aiming to formulate a more detailed opinion about the Report and the information included in it, the work team, integrated by Trans-parencia Mexicana, prompt PEMEX to consider again, for the next annual environmental report, a larger and timely participation of the organized civil society.

3. The work team, set up by Transparencia Mexicana, considers the comparative analysis of PEMEX and other international oil companies to be a priority, as well as the study of their tendencies, of improvement or worsening, in the course of time.

4. We trust in the fact that this first practice, as an experiment, will be the basis to reinforce the relationship between PEMEX and organized civil society.

Transparencia Mexicana takes on the work team’s observations as its own, and makes an invitation to PEMEX, from now on, to jointly set the basis of a wider and more opportune collaboration for the 2006 report.


annex ChaRT suMMaRiZ inG QuesTions anD answeRs

1. In accordance with the Decree published in the Federation Official Diary, on January 11, 2002, the compliance of the Sectorial Program for Energy is mandatory within its fields of competence. In that sense, what kind of actions does PEMEX implement for the compliance of this program?

In accordance with what it is stipulated in this program, PEMEX has implemented actions in different hubs:

• Integration of a institutional network of experts in Efficient Use and Saving of Energy. • Training of more than 400 employees of PEMEX and its Subsidiary Companies, in development of energetic-

environmental diagnosis and evaluation of energetic efficiency projects. • Five Campaigns of Efficient Use and Saving of Energy. • Reduction of 22% in the energy consumption per production unit during 2001-2005 period, due to associated

gas flaring reduction and to energetic efficiency in the work centers operation. • Operation of the Internal Carbon Emissions trading Market • Participation of PEMEX’s buildings on the Programa de Ahorro de Energía Eléctrica en los Inmuebles de la Admi-

nistración Pública Federal (Program of Electric Energy Saving in the Federal Public Administration’s buildings).• Energetic diagnosis of main buildings registered on the program, carried out by Comisión Nacional de Ahorro

de Energía - CONAE (National Commission for Energy Saving). • Quarterly follow-up of electric energy consumption of the buildings registered on the program, through

CONAE’s web page.

2. Within the context of sustainable development, PEMEX represents the 3% of GDP, the 8% of total exports, and the 37% of fiscal income. Considering that total hydrocarbon reserves have systematically decreased in the last few years, what does PEMEX do to minimize the exhaustion of oil total reserves, as it is a non renewable natural resource? And, what long term policies does PEMEX have for a foreseeable future when the hydrocarbons reserves will be exhausted?

Answer included in point “c” Hydrocarbons reserves, chapter 3 Petróleos Mexicanos in context.

3. Within the context of the use of renewable energy sources (Objectives and goals Nº 4, 2001-2006 Sectorial Plan of Development), what does PEMEX do in order to create an infrastructure which would guarantee the supply of fuels to future generations (Principle Nº7 of Energetic Policy, 2001-2006 Sectorial Plan of Development).

Petróleos Mexicanos is subject to Energetic Policy, including support policies for renewable energies which, according to the Organic Law of the Federal Public Administration, are incumbent on the Secretary of Energy’s Office.

In this context, within its fields of action, Petróleos Mexicanos is technically and economically evaluating the possibility of introducing ethanol, a renewable fuel, into the gasoline blend he produces.

Likewise, there is a Law initiative which includes, among other issues, that the gasolines to be consumed in the main urban centers of the country shall contain at least 10% of ethanol based oxygenating compounds.

In order to fight the environmental pollution, since 1990, PEMEX has used oxygenating compounds as methyl tert-butyl ether (MTBE) in gasoline production. The use of these compounds represents the alterna-tive of lower cost to reformulate gasolines and fight the problems of contaminant emissions associated with lead use. The National Refining System has presently an installed capacity to produce these compounds of 12.2 thousand daily barrels. This capacity was built with a calculated investment of 158 thousand pesos (of 2005) between 1994 and 2002.

The 10% minimum of ethanol use in gasolines, established in this law project, would imply to eliminate MTBE, and would make PEMEX’s investments useless. Moreover, given the differences in the properties and the handling due to the use of ethanol, it would be necessary to modify the present operation and blend plan, and the existent infrastructure. The investment required for the use of ethanol in gasolines production is estimated between 75 and 100 million dollars.

Considering the additional investment, the modifications to the present operation and blend plan, and taking ethanol’s import price as a reference, PEMEX would need a subsidy that could be higher than 200 million dollars a year.

These are the conditions of investment and subsidies necessary for Petróleos Mexicanos to be able to implement the substitution of traditional oxygenating compounds by ethanol.

evaLuaTion anD CoMMenTaRies

Very Poor 0-20%

Poor 20-40%

Average 40-60 %

Good 60-80%

Very Good 80-100%

The sectorial program for energy assigns obligations to peMex.

besides exploration to enlarge its reserves, peMex does not report, in its answer, to have policies for a sustainable future after oil, using alternative sources of energy.

besides ethanol technical evaluation, peMex does not inform about having any solar, wind, biomass, microhydraulic infrastructure or any other kind.


4. Within the context of efficient use of energy, which is the historical tendency and which the future projection of energetic intensity, measured in energy terajoules, by thousands of barrels of oil, as well, as by millions of cubic feet of natural gas produced by the company?

Energy consumption corresponding to the company’s activities shows a decreasing tendency. Between 2001 and 2005, the energetic intensity rate, expressed in terajoules for each thousand of barrels of crude oil equivalent1, had an average annual decrease of 4.8%, due mainly to a greater use of associated gas.

Energy consumption includes the operation of the four subsidiary companies and products’ flaring. Production includes crude oil and gas.

When the different cogeneration projects, that are forecasted, will start to operates, the energetic efficiency of the company will register an increase.

5. Which are the advance and the tendency in obtaining ISO 14001 certifications and Clean Industry Certificates? (Objective Nº7 of 2001-2006 Sectorial Plan of Development).

Answer included in point “f” Certifications, chapter 5 Environmental performance.

6. How PEMEX can be compared to other world class companies, with respect to emissions to air, water and soil, measured by thousands of barrels of oil, millions of cubic feet of natural gas produced by the company?

PEMEX has not identified available public information of other companies which would allow to make a consistent comparison in precise terms. Even though the sector’s main companies publish data of emissions to air, discharges to water and soil damage, they do not necessarily publish the relation between these data and the oil and gas production. Moreover, these data are not necessarily obtained in a similar way nor from the same sources, which makes it difficult to compare them directly.

7. Which is PEMEX’s portfolio of projects to mitigate greenhouse gases emissions? Which is their tendency

and how can they be compared to CO2 emissions, by thousands of barrels of oil, as well as in millions of cubic feet of natural gas, produced by other world class oil companies?

The answer to the first question is included in point “b” Climate change, chapter 5 Environmental performance.

The historical records of PEMEX’s CO2 emissions referred to crude oil and gas production show a sustained level of nearly 8.7 tons of CO2 per barrel of produced crude oil equivalent.

PEMEX does not have available public information of other companies which would allow to make a com-parison of the precise terms shown in this indicator. Even though the sector’s main companies publish data of CO2 emissions, they do not necessarily publish the relation between these data and the oil and gas pro-duction. Moreover, these data are not necessarily obtained in a similar way nor from the same sources, which makes it difficult to compare them directly.

8. Within the context of transparency and accountability, as well as regarding the obligation to operate a System and to establish a Committee of Quality Management (Objective Nº10 of 2001-2006 Sectorial Plan of Devel-opment), what has PEMEX done in order to create an indicators system which would be useful to the com-munity and to the public and private organizations, and how can PEMEX’s indicators be compared to those of Extractive Industries Transparency Initiative?

Since 2002 PEMEX has been working on the implementation of Intragob model, issued by the Federal Government and based on the following premises:

• To improve the quality of the products and services offered by the public sector to citizenship. • To consolidate a quality culture of public service. • To succeed in having a trustworthy and transparent Federal Public Administration. • To render accounts and report results systematically. • To promote resources saving and optimization. • To unify a meaning of continuous improvement, innovation and competitivity on management of Government

offices and entities.


Very Poor 0-20%

Poor 20-40%

Average 40-60 %

Good 60-80%

Very Good 80-100%

QuesTion saTisfyinGLy soLveD.


peMex does not inform about the projects it carries out.


1This includes the energetic equivalence of produced gas, in terms of crude oil.


Based on this model, public institutions’ work is oriented to fully satisfy the expectations and needs of citizens and clients of the products and/or services provided by Federal and State Public Administration.

2005 advances report, evaluated by the quality network integrated to that effect, concludes that the maturity level of institutional processes and systems in force within the company corresponds to 473 points. This places PEMEX in a 86% of compliance with the Federal Government goal of 550 points for 2006.

Petróleos Mexicanos has not confirmed if Intragob model coincides with the criteria of Extractive Industries Transparency Initiative.

9. Given the rise of oil price in world market and PEMEX’s additional income, in what way these resources have been used to promote sustainable development in Mexico?

Answer included in point “b” Main economic results, chapter 3 Petróleos Mexicanos in context.

10. Which is the tendency as for quality and quantity of waste water discharged by PEMEX facilities, and how these discharges can be compared, by thousands of barrels of oil, as well as in millions of cubic feet of natural gas, produced by other world class oil companies?

Answer included in point “c” Water utilization and discharges, chapter 5 Environmental performance.

11. With regard to liquid and gaseous hydrocarbons to air, water (including coast and sea waters), soil and subsoil, which is the total amount of spills, which is their tendency, how many spills of more than a barrel have been recovered and how can be all the afore mentioned compared with other world class oil companies?

Answer included in point “c” Spills and leaks in pipelines, chapter 4 Industrial safety.

12. Within the context of closure, closing-down and abandon of obsolete infrastructures, especially hydrocarbons transportation pipelines that are about to reach, or have exceeded their expected average life, what preventive and repairing actions does PEMEX undertake to revert the increasing tendency of accidents in hydrocarbons transportation pipelines?

Answer included in point “c” Spills and leaks in pipelines, chapter 4 Industrial safety.

13. Which was the report of the advances on PEMEX’ accidents incidence and magnitude (Objective Nº6 of 2001-2006 Sectorial Plan of Development) and how can they be compared to those of other world class oil companies, using the Days Away From Work Case Frequency, DAFWCF?

Answer included in point “a” Personal accidents, chapter 4 Industrial safety.

14. Which policies has PEMEX adopted for the protection of biodiversity and natural areas, susceptible of being damaged, within the regions where it operates?

Answer included in point “b” Natural areas, chapter 6 Social responsibility.

15. Which actions does PEMEX have to promote long term communitarian development within the zones where it operates, and how do they relate to the principles of Global Compact as well as of the United Nations Millennium Development Goals?

Answer included in chapter 1 Message from the Director General.


Very Poor 0-20%

Poor 20-40%

Average 40-60 %

Good 60-80%

Very Good 80-100%


peMex reports percentual advances, and it would be interesting for the civil society to have knowledge of the absolute values expressed in parts by millionand compared to normativity in force.

no answeR2.

peMex did not present any recovery programs of infrastructure nor closed or abandoned pipelines.

The evidence shown by media indicates a higher number of regrettable casualties (including civil population) than the 10 reported by peMex. The sector’s frequency rates presented in the comparative table with other world wide oil companies deserves an acknowledgment.

peMex did not report policies but projects. The amount of 57.3 million pesos is low compared to the additional and the accumulative impacts peMex has in the ecosystems of Mexico.

unsatisfactory answer, as peMex has taken on the commitment of being a socially responsible company. peMex has already published that it subscribed to the united nations Global Compact.

2 it’s worth mentioning that even though question 11 was not answered individually, questions 11 and 12 are answered jointly in chapter 4, point “c”. however, both refer to pipelines and spills issues.


Petróleos Mexicanos is a decentralized public entity of the Federal Public Administration, duly constituted and legally existent in accordance to Mexican laws, with legal status and own patrimony, and whose aim is to exert the central leading and the strategic management of all the activities encompassed by the national oil industry, accordingly to the Ley Reglamentaria (Regulations Law).

The purpose of PEMEX is to maximize the economic value of hydrocarbons and their derivatives, in order to contribute to the sustainable development of the country.

1 The peMex Code of ethics is available at www.pemex.com, in section Relaciones con Inversionistas.

The institutional values1 of PEMEX are:

• Leadership• Intelligence and technical capability• Integrity• Creativity and innovation• Team work • Development of human resources• Efficient attention to clients• Quality planning• Planning culture• Proudness about the enterprise, vocation

and commitment• Respectfulness for the environment• Mutual respect• Enthusiasm• Courage• Trust in the personnel • Credibility• Cohesion• Performance evaluation

Petróleos Mexicanos in context

safety, health and environmental protect ion �

2 presentation of the peMex safety, health and environmental protection emergency strengthening program by its Director General on april 29, 2005.

3 from piw 2004 Rankings, December, 2005. petroleum intelligence weekly.4 source: “Reservas de hidrocarburos 2005”, available at www.pemex.com, in section Relaciones con Inversionistas.

PEMEX sees to its employees safety and health, as well as to the protection of the environ-ment. Therefore, its policies include commitments such as the following ruling principles2:

• The safety, health and protection of the environment are values with the same hierarchy as production, transport, sales, quality and costs.

• All incidents and harms can be prevented.• The safety, health and protection of the environment are the responsibility of all workers

and are work conditions. • In PEMEX, we are committed to continue protecting and preserving the environment, for

the community’s benefit.• All PEMEX workers are convinced that the safety, health and protection of the environ-

ment are for our own benefit.

Petróleos Mexicanos is the largest Mexican company, with 86 billion USD of total sales, in 2005. It is the sole producer of crude oil and natural gas, and the sole producer of refined products and only company in Mexico commercializing them.

With a daily average production of 3.3 million barrels, Petróleos Mexicanos is the world’s third crude oil producer, the first in offshore production, and the ninth integrated oil company3.

Our proven reserves amount to 16.470 billion barrels of crude oil equivalent (BBCOE) enough for 10 years production, at the rate of 20054.

Our average lifting cost was 4.29 dollars per BCOE in 2005.

Our profit before interests, taxes, depreciation and amortization (EBITDA) of 55.3 billion USD places Petróleos Mexicanos in second place among the 10 main integrated oil compa-nies of the world.

�0 annual report 2005

infRasTRuCTuRe anD Main opeRaTionaL ResuLTs 5

Petróleos Mexicanos runs a wide net of production process-ing, storage and distribution facilities.

With 742 operative wells and 116 drilling teams in 12 inte-gral development sites and three region exploration sites, PEMEX produced daily, in 2005:

• 3.3 million barrels of oil, and• 4.8 billion cubic feet of gas

The nine gas processing centers and the six refineries pro-cessed daily 3.88 billion cubic feet of gas6 and 1.28 million barrels of crude oil, respectively.

With this processing infrastructure, the daily production lev-els of the main oil products of the system were as follows:

• 455 thousand barrels of gasolines• 63 thousand barrels of jet fuel• 318 thousand barrels of diesel• 351 thousand barrels of fuel oil• 246 thousand barrels of liquefied gas

The seven petrochemical facilities of the system produced 6.1 million metric tons of petrochemical products through-out the year.

The main storage, distribution and commercialization infra-structure associated to these operations was:• 77 land based storage terminals• 15 offshore terminals• 17 liquefied gas terminals, and• 39.7 thousand kilometers of hydrocarbons transportation pipelines7

5 source: “Memoria de labores”, available at www.pemex.com, in section Informes.6 processed humid gas.7 besides, petróleos Mexicanos has around 21 thousand kilometers of pipelines for the collection and discharge of wells production.

safety, health and environmental protect ion ��

8 unaudited consolidated financial results report as of December 31, 2005.9 source: “informes sobre la situación económica, las finanzas públicas y la Deuda pública / Cuarto

Trimestre de 2005”. available at www.shcp.gob.mx, home page, in section Información Diversa.

Main eConoMiC ResuLTs 8

In 2005, the main economic variables of the company were:

• Total sales for the amount of 928.6 billion MXP, 16% more compared to 2004.• Income before taxes for a total of 506.1 billion MXP, 7% more compared to 2004. • Net loss of 76.3 billion MXP.

In 2005, the income before taxes, rights and non classifiable charges was 506.1 billion MXP, compared against 474.6 billion MXP in 2004. The increase of 7% was mainly due to:

• An increase of 28.4 billion MXP of operative yield• A decrease of 0.3 billion MXP of other net incomes• A reduction of 2.8 billion MXP in the integral financing cost

In 2005, the total amount of taxes, rights and non classifiable charges increased 18% compared to 2004, up to 580.6 billion MXP.

The payment of Petróleos Mexicanos and Subsidiary Companies’ taxes, rights and non classifiable charges was 62.5% of their total sales plus a non classifiable charge on the surplus yields on crude oil exports (ARE).

According to official data of the Secretaría de Hacienda y Crédito Público9, the receipts from Advantage on Excessive Yields, generated on 2005 on the basis of an average price for oil exports higher than 27 dollars, amounted to 43.973 billion MXP.

The distribution of the resources corresponding to each federal entity is based on the same porcentage structure resulting from the Fondo General de Participaciones (General Shares Fund) recorded in the Cuenta de la Hacienda Pública Federal de 2004 (2004 Treasury Account).


hyDRoCaRbons ReseRves 10

The results as of December 31, 2005 show that PEMEX has proven reserves for the amount of 16.470 billion barrels of crude oil equivalent, of which 72% correspond to crude oil, 11% to plant condensates and liquids, and the remaining 17% to dry gas equivalent to liquid.

• 69% of the reserves are “developed”, meaning the reserves that can be retrieved from existing wells, including those that ca be retrieved with the present infrastructure, by means of a slight update with moderate investment.

• 31% of the proven reserves are “not devel-oped”, meaning the volume we expect to produce in the future by drilling new wells.

The potential reserves are calculated in 15.789 billion barrels of crude oil equiva-lent. The sum of these reserves and the proven ones constitute the reserve 2P, which totals 32.258 billion barrels of crude oil equivalent.

The likely reserves total 14.159 billion barrels of crude oil equivalent which, added to the proven and potential reserves, consti-tute the reserve 3P with a total of 46.418 billion barrels of crude oil equivalent. Among several, the main oil fields in this category are Chicontepec, Akal, Maloob and May.

The total of the reserve 3P is divided in: 71% of crude oil, 10% of plant conden-sates and liquids, and 19% of dry gas equivalent to liquid.

The restitution of reserves issue is, with no doubt, of the highest strategic importance for the com-pany. We will be able to reach the objectives on this matter only by investing significant resources.

Resulting from the invest-ment in exploration, be-tween 2001 and 2005, the rate of restitution of total reserves of hydrocarbons increased from 14% to 59%.

This results in the fact that the annual incorporation of total reserves went from 216 million barrels of crude oil equivalent in 2001 to 950 million at the closing of 2005.

Considering the information as of December 31, 2005, with an amount of annual investment in exploration and production above 10 billion USD in the next four years, and with a rising tendency of the amount intended to exploration, our expected goal is to reach a restitution rate in 3P of 75% for 2006 and 100% for 2010.

Likewise, the goal for the integrated restitution rate in 1P will rise to reach a rate of 77% in 2010.

These expected results will contribute to reinforce substantially the PEMEX long term prospects regard-ing hydrocarbons production and transformation.

10 source: “Las reservas de hidrocarburos de México. evaluación al 1 de enero de 2006”, available at www.pemex.com, in section Relación con inversionistas / estadísticas operativas / reservas de hidrocarburos.

Crude oil 72% 74% 73% 68% 71%

plant condensates and liquids 11% 7% 9% 9% 10%

Dry gas 17% 19% 18% 23% 19%

note: The sums may not coincide due to round off

safety, health and environmental protect ion �3

CoRpoRaTe GoveRnanCe

PEMEX Board of Directors has eleven members: six representatives of the Government designated by the President of Mexico, including the president of the board, and five represen-tatives of the Sindicato de Trabajadores Petroleros de la República Mexicana (Mexican Oil Workers Union). There are no independent counselors in the Board of Directors.

Presently, the representa-tives of the Government are the Secretario de Energía (Secretary of Energy), who is the President of the Board of Directors; the Secretario de Hacienda y Crédito Público (Secretary of the Treasury); the Secre-tario de Medio Ambiente y Recursos Naturales (Secre-tary of Environment and Natural Resources); the Secretario de Comunicacio-nes y Transportes (Secretary of Communications and Transports); the Secretario de Relaciones Exteriores (Secretary of Foreign Affairs), and the Secretario de Economía (Secretary of Economy).

The Organic Law of PEMEX and its Subsidiary Compa-nies states that: “the President of the Board shall be the head of the sector coordinating entity to which

Petróleos Mexicanos is ascribed and he will have casting vote”. The sector coordinating entity is the Department of Energy.

The members of the Board of Directors do not receive any emolument for their services to the company. The directors of PEMEX and its Subsidiary Companies must carry out their duties without receiving any additional benefits besides those established by the Law. The directors are not empowered to grant personal loans with funds of the company.

The Board has a consultant Committee whose task is to emit opinions and recom-mendations to the Board of Directors, in the following issues:

• Budgets• Donations • Special payments• The issues specifically

proposed by the counselors and/or stated

by the President of the Board, or presented

by the Director General.

RisK ManaGeMenT

In its business common activities, PEMEX is a party in trials of various kinds. In each particular case, PEMEX evaluates if the claimed payments do proceed or not, so as to determine if it is necessary to create a contingency fund should it be the case of a unfavorable verdict.

PEMEX has no knowledge of being, or if it might be, a party of any trial or proce-dure that may have a detrimental verdict, for which it has not created a contingency fund.

PEMEX has insurance policies for its properties and land assets, such as refineries, processing plants, pipelines and storage facilities, as well as for its offshore facilities, such as drilling platforms, machinery and equipment, gas collection, floating docks and production facilities.

These insurance policies cover risks of sudden and accidental destruction, as well as extraordinary expenditures related to wells operation, such as, repair and control costs, and evacuation costs.

PEMEX also has general civil responsibility insurance policies covering risks of environmental responsibili-ties, including spills. Besides, it has protection and indemnity insurance policies, life insurance for its employees, as well as insurance policies for cars, heavy equipment and electronic equipment, and finally hull and cargo insurance policies for its marine fleet.


In 2005, ten oil workers lost their lives in work accidents. This irreparable loss for their families and for Petróleos Mexi-canos has lead us to redefine the way in which industrial safety is managed in the company. At the beginning of April 2005, the Programa Emergente de Fortalecimiento a la Seguridad, Salud y Protección Ambien-tal (Emergency program to strengthen the safety, health and environmental protection) was launched, aiming to stop a series of industrial accidents, particularly spills occurred in the facilities of Pemex, and to reverse the incidence tendency of accidents in late 2004 and along the first semester of 2005. This program was the result of a joint effort between the company and the workers union.

industrial safety

Personal accidents

The central element is the homologation and application of a unique system of integral administration, named PEMEX-SSPA, which, as any natural evolutionary process and continuous improvement, incorporates PROSSPA’s teachings of success and SIASPA’s advancements, through Operative Discipline, Safety in Processes, Occupational Health, Effective Audits and Environmental Management

ind

ust

rial

saf

ety


ind

ust

rial

saf

ety

1.00

1.17

1.09

1.50

1.06

124

133

132

143

117

1.86

1.79

1.54

1.85

0.71

53

40

52

54

27

Petróleos Mexicanos

2001

2002

2003

2004

2005

0.56

0.88

1.13

2.00

1.13

139

161

199

210

138

Corporate

2001

2002

2003

2004

2005

0.50

1.01

0.92

0.38

0.26

88

114

196

203

250

PEMEX Petrochemicals

2001

2002

2003

2004

2005

0.69

1.10

0.63

1.23

1.16

85

138

121

127

93

PEMEX Gas and Basic Petrochemicals

2001

2002

2003

2004

2005

2001

2002

2003

2004

2005

PEMEX Refining

2001

2002

2003

2004

2005

1.26

1.14

1.35

1.67

1.26

191

154

134

161

143

FREQUENCY SEVERITY

ACCIDENTABILITY RATE 2001-2005



• A strict follow up was made

to 6,495 recommendations

of Comisiones Mixtas de Se-

guridad e Higiene (Safety and

Health Mixed Commissions),

of which 2,718 were carried

out as of December 31 of

the previous year, that is a

42% of attention, continuing

this effort to insure their total

fulfillment in the established

schedule.

• The technical personnel of

the DCO and the ASIPAS

of the Subsidiary Entities

participated in 53 inspection

visits to 43 facilities consid-

ered critical due to the recur-

rence of personal accidents.

These resulted in 932 recom-

mendations to mend the

cause of those accidents,

of which 380 were rated as

intolerable, and therefore

the corresponding attention

programs were developed.

• The Reglamento de Segu-

ridad e Higiene de PEMEX

(Pemex Safety and Health

Regulation) was updated and

optimized, with the participa-

tion of a technical multidisci-

plinary team of the Subsidiary

Entities, considering the

normativity in force and the

best Safety, Health and

Environmental Protection

practices as fundamental

parts of this revision. The most

outstanding improvement

was the addition of three

new chapters concerning the

following topics: Occupational

health, Critical procedures

and Environmental culture,

as well as the suppression

of 217 articles and a first aid

manual, considered obsolete.

• A follow up of the Reinsur-

ance recommendations was

made through technical sup-

port visits to make sure they

were fulfilled accordingly to

the Reinsurance inspectors

criteria. As a result, from the

388 reviewed recommenda-

tions, 238 have been certified

as completed.

In the context of the emergency program, we developed evaluation actions for the facilities of Subsidiary Entities, setting up work plans and programs for the immediate attention of the most critic risk conditions. The main actions were:


The severity rate in Petróleos Mexicanos was 117 days lost per million man work hours, representing a decrease of 18% compared to the previous year.

The severity rate1 per Subsidiary Company, except PEMEX Gas and Basic Petrochemicals, showed a decreasing ten-dency compared to the previous year, with 143 days lost in PEMEX Exploration and Production; 138 in PEMEX Pet-rochemicals, and 93 in PEMEX Refining. In PEMEX Gas and Basic Petrochemicals it increased 23%, due to the death of three workers, raising the rate to 250 in 2005, against 203 for the previous year.

The SSPA Emergency plan ended on December 31, 2005. In January 2006, the application of the PEMEX-SSPA sys-tem was started. This implementation is structured in two phases: a short term one focused to arrest risks, and a sec-ond one ranging from medium to long term focused in the improvement and sustainability. The program to implement the PEMEX-SSPA system will take three years. The specific programs consist on the application of the 12 best interna-tional practices, tutoring and training for the systematic use of Safety, Health and Environmental Protection proven tools, as well as intensive tutoring of all key personnel.

In parallell, the PEMEX-SSPA system implementation will be reinforced through a Processes Safety Management Imple-mentation and Diagnosis Practices Program emphasizing the follow up of the recommendations emitted by Reinsurance, Safety and Hygiene Mixed Local Commissions, Task Force, and Origin Cause Analysis of incidents/accidents.

In the international context, Petróleos Mexicanos has a performance equivalent to that of the oil industry. The results obtained in 2005 are comparable to those published by some of the main integrated oil companies2

1 The number of work accidents and the frequency and severity rates do not include accidents occurred on the way to/from work nor those due to third party actions and/or insecure conditions out of peMex control reach.

2 The frequency rate is the ratio of the number of disabling or mortal accidents occurred per million man hours with risk exposure in a given period, without including the accidents occurred on the way to/from work nor those due to third party actions and/or insecure conditions out of peMex control reach. The data in this graphic have been obtained from public information sources, even though the criteria used for the calculation by each company may be different.

Due outcome of the activities carried out, we managed to lower in 26% the number of work accidents1, from 526 in 2004 to 391 in 2005. This decrease allowed to revert the rising tendency of the accidents frequency rate in PEMEX, reaching its lowest level since 2001, with a total value of 1.06 accidents per million risk exposure man work hours.

This behavior is shown in the results obtained in the differ-ent business activities of the company: decrease of 25% in PEMEX Exploration and Production; 6% in PEMEX Refining; 44% in PEMEX Petrochemicals, and 32% in PEMEX Gas and Basic Petrochemicals, with 1.26, 1.16, 1.13 and 0.26 rates, respectively.

ind

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rial

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ety

seCToR fReQuenCy RaTes 2

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

peMex 5.80 5.30 4.90 4.00 2.68 1.39 1.19 1.00 1.17 1.09 1.50 1.06

bp & aMoCo 2.2 1.8 1.3 1.2 0.9 0.9 0.8 0.6 0.4 0.4 0.4

a.p.i. pRoM. 4.0 3.0 2.5 2.4 1.7 2.5 2.3 1.5

TexaCo 2.8 2.5 2.3 1.6 1.2 1.3

sheLL includes subcontractor 1.6 1.6 1.4 1.3 1.2 1.1 1.0 1.0

ChevRon TexaCo 1.9 2.0 1.7 1.3 1.3 1.1

safety, health and environmental protect ion ��

The severity rate in Petróleos Mexicanos was 117 days lost per million man work hours, representing a decrease of 18% compared to the previous year.

The severity rate1 per Subsidiary Company, except PEMEX Gas and Basic Petrochemicals, showed a decreasing ten-dency compared to the previous year, with 143 days lost in PEMEX Exploration and Production; 138 in PEMEX Pet-rochemicals, and 93 in PEMEX Refining. In PEMEX Gas and Basic Petrochemicals it increased 23%, due to the death of three workers, raising the rate to 250 in 2005, against 203 for the previous year.

The SSPA Emergency plan ended on December 31, 2005. In January 2006, the application of the PEMEX-SSPA sys-tem was started. This implementation is structured in two phases: a short term one focused to arrest risks, and a sec-ond one ranging from medium to long term focused in the improvement and sustainability. The program to implement the PEMEX-SSPA system will take three years. The specific programs consist on the application of the 12 best interna-tional practices, tutoring and training for the systematic use of Safety, Health and Environmental Protection proven tools, as well as intensive tutoring of all key personnel.

In parallell, the PEMEX-SSPA system implementation will be reinforced through a Processes Safety Management Imple-mentation and Diagnosis Practices Program emphasizing the follow up of the recommendations emitted by Reinsurance, Safety and Hygiene Mixed Local Commissions, Task Force, and Origin Cause Analysis of incidents/accidents.

In the international context, Petróleos Mexicanos has a performance equivalent to that of the oil industry. The results obtained in 2005 are comparable to those published by some of the main integrated oil companies2

1 The number of work accidents and the frequency and severity rates do not include accidents occurred on the way to/from work nor those due to third party actions and/or insecure conditions out of peMex control reach.

2 The frequency rate is the ratio of the number of disabling or mortal accidents occurred per million man hours with risk exposure in a given period, without including the accidents occurred on the way to/from work nor those due to third party actions and/or insecure conditions out of peMex control reach. The data in this graphic have been obtained from public information sources, even though the criteria used for the calculation by each company may be different.

Due outcome of the activities carried out, we managed to lower in 26% the number of work accidents1, from 526 in 2004 to 391 in 2005. This decrease allowed to revert the rising tendency of the accidents frequency rate in PEMEX, reaching its lowest level since 2001, with a total value of 1.06 accidents per million risk exposure man work hours.

This behavior is shown in the results obtained in the differ-ent business activities of the company: decrease of 25% in PEMEX Exploration and Production; 6% in PEMEX Refining; 44% in PEMEX Petrochemicals, and 32% in PEMEX Gas and Basic Petrochemicals, with 1.26, 1.16, 1.13 and 0.26 rates, respectively.

ind

ust

rial

saf

ety

seCToR fReQuenCy RaTes 2

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

peMex 5.80 5.30 4.90 4.00 2.68 1.39 1.19 1.00 1.17 1.09 1.50 1.06

bp & aMoCo 2.2 1.8 1.3 1.2 0.9 0.9 0.8 0.6 0.4 0.4 0.4

a.p.i. pRoM. 4.0 3.0 2.5 2.4 1.7 2.5 2.3 1.5

TexaCo 2.8 2.5 2.3 1.6 1.2 1.3

sheLL includes subcontractor 1.6 1.6 1.4 1.3 1.2 1.1 1.0 1.0

ChevRon TexaCo 1.9 2.0 1.7 1.3 1.3 1.1


In 2001, the Subdirección de Servicios de Salud (Sub-Direc-tion of Health Services) started the Program of Comprehen-sive Service to Workers and their Families in the PEMEX Refining Storage and Distribution Terminals, located in the West zone and the North of the country. The activities included the health evaluation of the workers and their fam-ilies in both aspects, way of life (Preventive Care) and work exposure (Occupational Health). Besides that, contributing to the implementation of the Safety, Health and Environmental Protection Systems (SIASPA-PROSSPA), the Strategic Occu-pational Health Plan and the Occupational Health Organiza-tion Manual were emitted, with 25 Operative Instructions which regulate the medical activities in the working places.

In 2002, the modules of health and incapacities profile were installed and put in function within the Sistema Integral de Administración de la Salud (SIAS – Comprehensive System of Health Management) which record the absenteeism in coordination with the Human Resources area.

Occupational health

Petróleos Mexicanos policy concerning Occupational Health is to take care of its personnel with regard to their exposure to risks during the working activities as well as the circumstances that affect their capability of performance. PEMEX seeks to preserve the aptitudes and wellbeing of its employees, it protects their sustenance means and contributes to the competitivity of the organization

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safety, health and environmental protect ion 2�

In 2003, there were 163 Units of Preventive Medi-cal Services for Workers on location at the different work centers. To strengthen these activities the 2003-2006 Occupational Health Strategic Program of which the main strategic actions are: to evaluate the health of 100% workers of each work center; to control the risk factors of work-ing exposure and life style; to control the incidence and prevalence of workers morbidity, and to control the absenteeism due to health harm. Additionally, the Oc-cupational Health Operative Instructions Manual was actualized, establishing four strategic action lines: Operative Instructions of General Application, Op-erative Instructions for the Surveillance and Control of the Healthy Worker, Op-erative Instructions for the Surveillance and Control of the Exposed Worker, and Operative Instructions for the Surveillance and Control of the Worker with Harm to his Health. Likewise,

the Strategic Program was implemented in the Medical Preventive Services for Workers. In 2004, the work centers of PEMEX Gas and Basic Petrochemicals, and PEMEX Refining participated in the health weeks.

In 2005, we started the construction of the Regional Unit of Occupational Health in Ciudad del Carmen, in Campeche State, with the collaboration of PEMEX Exploration and Production and the Northeastern Ma-rine Region. The objective of this project was to evalu-ate the workers’ physical and mental capabilities, to rehabilitate them to work, as well as to strengthen those capacities.We also participated with PEMEX Refining General Management Office in the development of the Occupational Health Emergency Program, with the purpose of strengthen the workers health and the facilities safety.

As of December 2005, the emission of Permanent Incapacity and Unsuitability Statements for Workers decreased 52% relating to the end of 2002, with the consequential contention of indemnity expenses and work related liabilities. This was a consequence of the implementation, in March 2003, of the Procedures Manual for the Ruling in Occupational Medical Care.

In 2005, the Industrial Toxi-cology Laboratory was in-stalled and put in operation, with PEMEX Petrochemi-cals, at the General Hospital of Nanchital, for the early detection of alterations, in workers, due to their expo-sure to chemical agents, as well as of genotoxic altera-tions at the molecular level.

The goals for 2006 of Oc-cupational Health Strategic Program are to fulfill 100% the Operative Instructions of the Annual Operative Program of the Preventive Medical Services for Work-ers of each work center and to evaluate with it two strategic indicators for the Sub-Direction of Health Ser-vices: average of incapacity days by worker and per-centage of healthy workers.

Occupational Health Strategic Program is a response and contributes to strengthen safety, health and environ-mental protection within the company.

ReGionaL uniT of heaLTh aT woRK, Ciudad del Carmen, Campeche woRKeRs heaLTh TRaininG


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Spills and leaksin pipelines

The most important actions carried out in 2005 to attend and clean the area were the recovery of 4,000 barrels of hydrocarbons –that were sent to be reprocessed, and the removal and treatment of 32,000 tons of calla lily, soil and embankment saturated with hydrocarbons.

In order to determine and gauge the level of the damage, there were taken 869 soil, 121 sediments and 412 water samples from the affected area as well as from unaffected zones, that served as a parameter to measure the restora-tion work that had to be undertaken.

By December 2005, the soil and sediments restoration work in the affected banks of the Coatzacoalcos river and the mangrove swamps was 75% completed. We expect that the work will be finished in July 2006.

This event was an important milestone for the company, that lead it to determine, on a national level, the state of the Hydrocarbons Pipeline Transportation System, with the aim of preventing this kind of major accidents. Given the fact that the greatest part of the spills and leaks registered in 2005 took place in the pipeline system, this report centers its analysis in these events, as well as in the strategies and measures to decrease future risks.

In 2005, the total of events that happened and were regis-tered in the Pipeline Transportation System was of 395, of which 280 were liquid hydrocarbons spills and 115 were leaks of hydrocarbons in gaseous phase.

Of the spills, 68 (24%) were higher than 5 barrels, of which 67% happened in the states of Oaxaca (7%), Tabasco (13%) and, noticeable, Veracruz with 32 spills (47%), with a total spills of 3,368 barrels, affecting approximately 3 hectares (7.4 acres) of soil.

Related to the 115 leaks, five of them (4%) ended in signifi-cant consequences, due to the explosion of the products. Such are the cases of the 10”Ø Cosoleacaque – Pajaritos ammonia pipeline in the Municipio de Nanchital (federal entity similar to an american county), in State of Veracruz, and the 48”Ø Escribano-Trinidad gas pipeline in the State of Tabasco, to mention the most significant ones.

The principal causes associated to these events are the corro-sion in the pipelines due to the lack of means for maintenance in previous years, the damages caused by third parties and the out of control clandestine taps, that together represent 80% of the causes of spills and leaks.

On December 22, 2004 there was a fire in the Mazumiapan’s pumping station, Veracruz, that caused a rupture in the Nuevo-Teapa-Poza Rica 30” pipeline and the spill of 5,000 barrels of crude oil, affecting 11 Km along the right bank of the Coatzacoalcos river, and those of the Tepeyac, Golapa and Teapa streams, as well as 2 hectares (4.9 acres) of adjoining soil and mangrove swamps


On April 13, 2005, in the Muni-

cipio de Nanchital, Veracruz,

there was an ammonia leak,

in the km 20+312 of the 10”Ø

ammonia pipeline, that runs

from the Cosoleacaque Petro-

chemical Complex to the Paja-

ritos Refrigerated Terminal.

The leak was caused by an

accidental cut in the pipeline,

by a contractor company,

that compromised the pipe’s

integrity, causing the release

of 80 tons of ammonia and the

death of six workers of the

said company.

To assure the populations

safety, it was necessary to

move out almost 350 individu-

als to a shelter in the city of

Nanchital. Likewise, medical

attention was ministered, in

situ, to 297 individuals that

presented symptoms of expo-

sure to the gas.

Claims for injuries and damage

to their property were seen to,

which resulted in payments

reaching nearly 582 thousand

MX Pesos.

To attend the immediate en-

vironmental effects, 290 tons

of ammoniacal water were

removed and sent for their

treatment to the Petrochemi-

cal Complexes of Morelos

and Cangrejera. Also, to make

sure there was no remaining

pollution, the Tepeyac stream

and seven wells were physio-

chemically evaluated.

The damaged soil’s restoration

was done through an in situ

biocorrection by closed circuit

vapor desorption.

On January 16, 2006, the

PROFEPA recovered the

damaged site concluding the

salvage of 7,286 cubic meters

of contaminated soil, over

3,387.33 square meters of

damaged area.

On July 8, 2005, there was a

gas leak in the Escribano-La

Trinidad 48”Ø gas pipeline trap

area, on the 3rd section of the

road Comalcalco-Cunduacán,

in the State of Tabasco, at the

Ranchería Huimango.

The leak caused an explosion

killing four people and hurt-

ing 11 more. Also, around the

leak, 114 vegetation and crop

hectares were damaged by the

ensuing fire.

It was necessary to evacuate

775 people from the Ranchería

Huimango, in the Municipio de

Cunduacán and 246 from the

Ranchería Benito Juárez, in the

Municipio de Jalpa de Méndez.

Moreover, 11 PEMEX vehicles

and nine private were damaged

as well as two heavy equip-

ments of a contractor company.

To December 2005, the com-

pany had the characterization of

the damaged site, the essential

evaluation to determine the

correct restoration and refores-

tation techniques. By that time,

90% of the polluted or burned

vegetal matter had been taken

away, for its final disposal in

biotreatement cells.

As part of the repairing of the

pipeline, a portion of more than

140 meters was replaced.

Important casesCosoLeaCaQue-paJaRiTos 10”Ø aMMonia p ipeL ine The esCRibano-La

TRiniDaD 48”Ø Gas p ipeL ine TRap aRea

CosoLeaCaQue, veracruz


There was a Magna gasoline

spill near the rural zone of San

Lorenzo, Municipio of Xicote-

pec de Juárez in the State of

Puebla, on August 18, 2005.

This happened because there

was a rupture of the pipeline at

the 58+000 section, caused by

a land movement due to the

heavy rains in the mountain

region of the State.

The spill was estimated to be

about 907 barrels, that were

impossible to recover because

of the steepness of the terrain

and the properties of the fuel.

The environmental impact in the

zone was the damage to the

Cilima river and to 187 square

meters of land.

The claims caused a total

payment of 352 thousand MX

Pesos, for the damages caused

to different crop areas and to

farm animals.

As to assisting the affected

population, there was estab-

lished a medical monitoring

system in the communities.

Also, there was put into place

means to provide a supply of

drinkable water and food, as

well as economic aid to

rehabilitate the water reservoir

and the water network.

Because the pipeline is located

in a high vulnerability zone,

there is a plan to change the

location of more than 6 kilome-

ters of pipeline, to a zone not

prone to land shifts, which will

be safer for the environment

and the pipeline.

Meanwhile, several preventive

actions were carried out to

avoid future land movements,

such as land mechanics

studies, and the construction of

gabions on the hills slopes in

order to assure the talus stability.

Important caseThe poZa RiCa-CiMa De ToGo-aZCapoTZaLCo 18”Ø MuLTipLe pipeLine

Since January 2005, an intensive maintenance pro-gram has been carried out. This includes the inspection and rehabilitation of critical pipelines. As a result, the company has rehabilitated up to 6,361 kilometers of pipelines, of which 2,436 are in the State of Veracruz.

To vouch for an efficient management process of the pipelines system’s integrity, the company has established a “risk manage-ment and comprehensive maintenance techniques incorporation program” that aims to eradicate the root causes that originated failures in the pipelines.

This program groups all the activities related to the integrity, operation and safety into a single process, which will allow to record the pipelines conditions that will serve as a source of references, in order that the improvements can be documented through the follow up of performance indicators.


enviRonMenTaL LiabiLiTies ReMeDiaTion: MininG uniT in TexisTepeC, veRaCRuZ

At the same time, the comprehensive maintenance model was redesigned, taking into account the existing suggestions issued by the PEMEX subsidiaries. This new plan incor-porates the predictive, preventive and corrective maintenance activities, related to the In-tegrity Management program.

Within this plan, it is possible to include the follow up of the line rights maintenance pro-cess, recording the integrity of the pipelines that are housed in it, as well as the usual com-prehensive maintenance activities of pipeline transportation.

Totals

SPILLS (liquids) LEAKS (Gases) (spills + leaks)

ENTITIES

Registered number

estimated volume(bls)

estimated quantity(ton)

Registered number

estimated quantity (ton)

Registered number

estimated quantity(ton)

peMex-exploration and production 1)

226 1,502.00 211.00 102 19.00 328 230.00

peMex-Gas and basic petrochemicals

1 481.00 68.00 7 248.00 8 316.00

peMex-Refining 55 20,613.00 2,901.00 6 1.00 61 2,902.00

peMex-petrochemicals 1 0.06 0.01 1 80.00 2 80.01

Total PEMEX 283 22,596.06 3,180.01 116 348.00 399 3,528.011) The table includes only the spills and leaks of the pipeline hydrocarbon transportation system

2005 sp iLLs anD LeaKs ReCoRD

spiLLs anD LeaKsin MaJoR pRoCesses faCiL iT ies

Included in this type of facilities are, mainly, the re-fineries, the gas processing centers and the petrochemical complexes. According to the records of each one of the subsidiary companies, only PEMEX-Refining had four events, of which three were spills estimated in 1,256 barrels and one was a leak estimated in 500 kilo-grams of fluorhydric acid.

Objective:

To eliminate the environ-

mental liability which charac-

teristics are: acid residues of

dams, contaminating solid

residues, wells producing

sulfur and hydrocarbons.

Description:

• Neutralization of acid dams.

• Installation of a stabilization

cell for the final encapsula-

tion of the coal with sulfur

residues.

Dosage process of the magnesium oxide Residues stabilization cell

Successful case

Results:

• Neutralization of more than

939 acres and nearly 424 million

ft3 of water with a similar

acidity to that of the highest

corrosive acids (pH=0.6 to 2.6).

• Final encapsulation of more

than 500 thousand tons of

coal with sulfur residues.

This environmental liability was not caused by PEMEX. In 1994, the Federal Government assigned this parcel to PEMEX as a payment of the Compañía Exploradora del Istmo debts. It was then constituted as the Unidad Minera Texistepec (Texistepec Mining Unit). Pemex took the responsibility to elimi-nate this environmental risk.

Amount of the investment:

825 million MXP

Amount as of the financial year of

2005: 356 million MXP


Emissions to air

Emissions to air are mainly compounds generated by hydrocarbons combustion and evaporation, as well as sulfur-flow combustion. These emissions are the cause of undesirable environmental effects

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During the period 2001-2005, the accounted emissions to air showed an annual average reduction of 7%, with 715.0 thousand tons in 2005 against 955.5 thousand tons in 2001. Of these total emissions to air, the 60.8% was emitted by PEMEX Refining, the 23.4% by PEMEX Exploration and Production, the 12.7% by PEMEX Gas and Basic Petrochemicals, and the remaining 3.1% by PEMEX Petrochemicals.

environmental performance


suLfuR oxiDes eMissions

These SOX emissions represented the 71% of total emis-sions to air accounted by PEMEX during the period 2001-2005, and showed an annual average decrease of 6.9% with 516.9 thousand tons in 2005 compared to 668.5 thousand tons in 2001.

During this period, PEMEX Refining contributed with the 69.5% of total SOX emissions to air, PEMEX Exploration and Production with 18.3%, PEMEX Gas and Basic Petrochemical with 11.6%, and PEMEX Petrochemical with 0.6%.

SOX emissions from combustion in equipments called “fix sources” (boilers, furnaces and direct-fired heaters) are the only emissions regulated by environmental authorities. They represent the 32.4% of total SOX emissions and fulfill the conditions of normativity; the remaining 67.6% of emissions has not yet been regulated.

1 Norma Oficial Mexicana NOM-085-ECOL-1994 Contaminación atmosférica (Mexican official

norm -1994 atmospheric pollution).

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The emissions of SOX are the major precursor of acid rain which harms health besides causing corrosive damages to facilities and to workers and inhabitants’ properties. For that reason PEMEX has taken measures to reduce these emissions


souRCes of suLfuR oxiDes eMissions

The sulfur oxides emissions are produced mainly by flaring, combustion pro-cesses and also in oxidation equipments. Gas and liquid flow burners produced the 49.5% of SOX emissions during the period 2001-2005, with an annual average decrease of 11.2%.

This tendency to drop of SOX emissions to air is mainly due to the fact that, in the offshore oil platforms, the flaring of sour gas has been reduced, as it is used to increase the natural gas supply.

The emissions from com-bustion in heating, vapor and energy generation equipments represented 37.3% of total emissions during that period, with an annual average increase of 3.8%.

SOX emissions in oxidation equipments contributed with 13.2% of total emis-sions, which represents an annual average decrease of 15% during the period 2001-2005, due essentially to the installation of sulfur recovery plants in the Gas Processing Centers.

During 2006, the sulfur recovery plants, of two refineries with deficiencies in these aspects, will be rehabilitated, as they are located in Salamanca an Tula which are two zones that are susceptible to be affected.

Likewise, PEMEX will col-laborate with SEMARNAT to elaborate a norm regulating the sulfur recovery efficiency in refineries, in order to fill this normative void.


peMex expLoRaTion anD pRoDuCTion: noRTheasTeRn MaRine ReGioneMissions – assoCiaTeD Gas iMpRoveMenT expLoiTaTion

Successful case

Objective:

To maintain production lev-

els of Activo Cantarell.

To increase the production

of Activo Ku-Maloob-Zap.

To increase the compression

capacity and development of

associated gas.

To reduce contaminant

emissions to atmosphere.

Description:

Design, construction and

operation: 10 modules

with high pressure turbo-

compressors equipments

with a total compression

capacity installed of 1,170

MDCF, a humid sweet gas

dehydration plant and sour

gas sweetening towers.

Results:

Estimated capacity (*) of

contaminant gases reduc-

tion per year:

648.3 M ton of SOX

17.6 M ton de NOX

15,734.7 M ton of CO2

1,421.1 M ton of CH4

The development of ad-

ditional capacity for 1,170

MDCF and 100,000 bpd of

condensate gasolines.

Investment: 1,207 MUSD

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offshoRe pLaTfoRMs

* For the estimate of emis-

sions reduction, we con-

sider 1,170 MDCF of sour

gas containing 2.18 % Mol

of H2S.


Successful case

PEMEX Gas and Basic Petrochemicals initiated an important investment program for the construction of sulfur recovery plants and to reduce the sulfur dioxide emissions produced during the acid gas sweetening process in the Gas Process-ing Centers (Centros Procesadores de Gas - CPG).

With an investment of 400 million dollars, until now, twelve sulfur recovery plants have been installed, with Super Clauss technology, reaching a sulfur recovery efficiency level of 99%, higher than national and international norms, and reducing by half the sulfur dioxide emissions in oxida-tion equipments.

All Gas Processing Centers have this technology, except CPG Matapionche where there is the project of building a new plant.

With these actions PEMEX showed with facts its resolution to eliminate environmental risks, even when they are not included in a norm.

As a consequence of all above mentioned, PEMEX Gas and Basic Petrochemicals collaborated with SEMARNAT to elaborate the Norma Mexicana NOM-137-SEMARNAT-2003 to control the emissions of sulfur compounds in sour con-densed compounds and gas desulfuration plants, homolo-gated with the standard of the Environmental Protection Agency of the United Stated of America.

Gas pRoCessinG CenTeR


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Climate Change

Climate change is one of the most important problems that our planet will face in the XXI Century. To avoid alterations on the climate system, to improve the human development and wellbeing levels, as well as a sustainable economic growth, implies an important technological and social challenge.

Climate change is partly a consequence of the greenhouse gases emission (GHG) such as carbon dioxide (CO2), meth-ane (CH4) and nitrous oxide (N2O).

The Kyoto Protocol (KP), established by the United Nations Framework Convention on Climate Change (UNFCCC), which entered into force on 16 February, 2005, compels 38 devel-oped countries (Annex 1 Parties) to reduce the greenhouse gases emissions a 5.2% of 1990 registered emissions levels.

The CDM allows Annex 1 countries to earn certified emission reduction credits (CERs), or “carbon credits” for investment in emission reduction projects in non-Annex 1 countries. CERs generated from CDM project activities can then be used by Annex 1 countries to offset their national emission reduction commitments.

Mexico is not bound to reduce its greenhouse gases emissions; nevertheless, it participates in Kyoto Protocol through the Clean Development Mechanism (CDM)


2001-2005 peRfoRManCe

PEMEX keeps a historical record of its CO2 emissions, and it is in the process of integrating reliable inventories of the other greenhouse gases, especially methane.

Petróleos Mexicanos generates about the 5.6% of CO2 na-tional emissions. During the period 2001-2005, as a result of investments in projects and operative improvement actions, we can appreciate a tendency to drop in CO2 emissions.

During that period, CO2 emissions decreased a 6.5%, drop-ping off from 40.0 million in 2001 to 37.4 million tons in 2005. The annual average reduction was of 1.7%.


In 2001, the project of greater impact in emissions reduc-tion was the installation of two heat recovery facilities for vapor generation, in the Cactus Gas Processing Center. Since 2002, PEMEX main strategy to reduce CO2 emissions has been the beginning of the operations of compression platforms on the Gulf of Mexico, in order to increase the use of natural gas.

The levels of CO2 emissions due to offshore gas flaring de-creased from 400 thousand tons a month to 100 thousand, during the period 2001-2005.

In 2003, there was a 7.2% increase of the CO2 emissions, mainly due to the activities regularization of Cadereyta and Madero refineries, after their reconfiguration.

CanGReJeRa peTRoCheMiCaL CenTeR, veracruz state


The lower CO2 emissions were obtained in the Salamanca, Madero and Tula refineries, due to the reduction of heavy fuel oil consumption

2004-2005 peRfoRManCe

A 2.8% reduction of CO2 emissions was attained in relation to the previous year, dropping off from 38.5 mil-lion tons to 37.4 million.

The contribution in CO2 emissions by subsidiary companies, during 2005, was as follows: PEMEX Refining generated the 42.0%; PEMEX Explora-tion and Production the 26.4%; and, in a lesser proportion, PEMEX Petro-chemicals 16.0% and PEMEX Gas and Basic Petrochemical 15.6%.

During this last year, CO2 emissions, in exploration and production activities, decreased due to the secondary recovery through CO2 injection in Sitio Grande Field, in Chiapas State. Likewise, in Activo Cinco Presidentes, in Tabasco and Veracruz States, the gas flaring was

prevented. The gas was used in La Venta Gas Processing Center and in the construction of Shishito gas pipeline for gas han-dling and transportation to José Colomo Field com-pressors, in Tabasco State.

Thanks to the Air Quality Improvement Program (Programa de Mejora de Calidad del Aire - PROAIRE) a CO2 reduction has been accomplished, in a greater extent in the Salamanca, Madero and Tula refineries as they used heavy fuel oil with lower sulfur contents.


The main opportunity area stands in the commercialization of the GHG reductions through CDM projects

2006 pRoGRaMs anD GoaLs

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MeThane To MaRKeT As part of the international effort to fight climate change, in November 2004, the Methane to Market (M2M) initiative was launched. Its goal is to promote and use projects to capture methane in 17 oil and gas producers countries, that participate voluntarily in this program.

Representing Mexico, PEMEX co-presides, with the Russian Federation, the Subcommittee of the Gas and Oil Industry, with the mail goal of identifying,

in April 2006, at least two pilot projects to be applied in PEMEX Petrochemicals and PEMEX Gas and Basic Petrochemicals facilities.

nuevo peMex CoGeneRaTion pRoJeCT

Today, the Nuevo PEMEX Gas Processing Center uses electric energy produced by its auxiliary services plant and it uses fuels to gener-ate high pressure vapor. These operations are car-ried out with low efficiency levels and therefore at high costs and with additional carbon dioxide emissions.

Starting the process for the profitable use of the CDM, PEMEX has identified proj-ects with a potential of CO2 emissions reduction esti-mated in almost 6 million tons a year. It is expected that, in 2006, the first reductions will be obtained and, for the end of the same year, the validation of, at least, five CDM projects. In this sense, Petróleos Mexicanos has established technical alliances with companies of Annex 1 countries of Kyoto Protocol, with the World Bank and with other main financial institu-tions in the “carbon credits” international market.


In order to satisfy the energy and vapor requirements of this work center in a more efficient way, there is a project to build a cogeneration plant with an efficiency level of 70-80%, almost twice the actual level. During 2006, the bid-ding procedures for this project will be ended.

It is estimated for this plant to start its activities in 2009, with the generation of 291 MW, 15.5% for the consumption of Nuevo PEMEX GPC, and 84.5% for the consumption of other PEMEX facilities within the country.

nuevo peMex Gas pRoCessinG CenTeR, Tabasco state


Successful cases

peMex ReCeives fouR 2005 naTionaL pRiCes on TheRMaL eneRGy savinGs

The Secretaría de Energía (Secretary of Energy’s Office) awarded Cadereyta Refinery, and La Venta and Poza Rica Gas Processing Center, four 2005 National Prices on Thermal En-ergy savings, in the Facilities Modernization category.

For the second consecutive year, the first price was for “Ing. Héctor R. Lara Sosa” Refinery, in Cadereyta, Nuevo León, for the modernization of direct-fired heaters and for increasing the thermal efficiency in the equipments. With these actions an annual saving of 150,000 barrels of crude oil equivalent (BCOE) was obtained. The La Venta Gas Processing Center, in Tabasco State, obtained two second prices: for hav-ing refurbished the gas turbo-generator of the services section, which permitted to raise the average rate of the heat increase; and for installing burners with high efficiency and low contaminant emissions, which helped to obtain annual savings estimated in 134,000 BCOE.

CaDeReyTa RefineRy, nuevo León state poZa RiCa Gas pRoCessinG CenTeR, veracruz state

La venTa Gas pRoCessinG CenTeR, Tabasco state

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The Poza Rica Gas Processing Center, in Veracruz State, received the third price, for the modernization of gas sweetening process, which favored daily savings estimated in 100 BCOE

pep : iMpRoveD ReCoveRy pRoCess by Co 2 Re- inJeCTion in CaRMiTo-aRTesa pRoJeCT (2002-2005 )

Objective:

Implement mechanisms to

maintain pressure in mature

fields to improve their hy-

drocarbons recovery factors

and maximize the reserves

recovery through the injection

of 40MDCF of CO2.

Description:

The Carmito field is located

43 km to the southwest of

Villahermosa, in Tabasco

State. A compression station

was installed, the necessary

infrastructure was built,

and two CO2 injection wells

were conditioned.

Benefits:

- Since 2002, the non-vented

to atmosphere CO2 volume

has been of 30,000 MCF.

- An additional volume ob-

tained through improved

recovery of almost a million

barrels during the period

2002-2005.

- An additional volume of

hydrocarbon gas recovered

during injection of 2,400 MCF

during the period 2002-2005.

sepaRaTion pLanT

CoMpRession eQuipMenT

artesa-15 inJeCToR weLL


Regarding water, in Mexico, the three main problems relate to its availability, its management and its pollution. In some processes of oil industry, the use of water is intense and the volumes of waste water discharges are quite im-portant. For this reason, Petróleos Mexicanos actions in this matter are focused on the efficient use of this resource and the normative compliance.

Although the production and the number of facilities has in-creased during the period 2001-2005, the record of the use of crude water presents a 19.7% decrease, dropping from 238 to 191 million cubic meters a year.

As for the waste water discharges, they decreased 27.2%, dropping from 92 to 67 million cubic meters, during the same period, as it is shown in the graphic.

These results are mainly due to the construction and opera-tion of the urban-industrial waste water treatment plants in Minatitlán and Salina Cruz Refineries, as well as in different Gas Processing Centers, Offshore and Storage and Distribu-tion Terminals.

Besides the great projects carried out during the 90’s de-cade, and the beginning of this one, the actions of efficient use of water during the last few years has allowed to con-tinue with the tendency to drop, recording a 3.5% decrease, during the two years 2004-2005, in the use of crude water, dropping from 198 to 191 million cubic meters a year. This has been possible thanks to the actions to improve the pre-cision of the water balances, the rehabilitation of cooling towers, the recycling and use of streams in different facilities, as well as the reuse of stripped waters which are now sent to desalination plants. Regarding waste water discharges volume the results were not as successful. In 2005, it increased 11.7% compared to 2004. This was due to the rehabilitation of lines against fire and failures on the measuring system in petrochemicals and refining plants. Nevertheless, the commitment to the compliance of the maximum limits established in the norms was respected.

Water utilization and discharges

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Concerning the programs and actions for 2006, in Oc-tober, in Cantarell Field, the construction of a module, for complementary works, between Akal C7 and Akal C8 platforms will be fin-ished. The total investment of 75.2 million MXP includes the construction of an oily sour waters treatment plant and an ozonification sys-tem which, as it has been calculated, will permit to discharge the effluent to the sea, in compliance with the environmental normativity.

urban waters Treatment plant, MinaTiTLán RefineRy

waste water Treatment plant, saLina CRuZ RefineRy

Although these plants will not operate until 2008, it is important to point out that, during this year the bid-ding of the Urban Waters Treatment Plant in Madero Refinery will be carried out to treat 900 lps (liters per second) of sewage of the Tampico-Madero zone, of which 600 lps will be used as replacement water for the cooling towers, repre-senting a consumption of 18.9 million cubic meters a year of fresh water, 9.9% of Petróleos Mexicanos total in 2005.

In addition, Cadereyta Refinery is negotiating the construction of a water de-mineralizing plant for vapor generation, which includes the supply of ultrafiltra-tion packages and inverse osmosis to treat 166 lps of sewage. The total cost is estimated in 380 million MXP. With this investment the production costs will be reduced and there will be a greater operative flexibility.

wasTe waTeR TReaTMenT pLanTs With this infrastructure the fresh water saving potential is

22.2 million cubic meters a year, with the plants operating 100%.

pLanTDesiGneD CapaCiTy

lps (liters per second)

invesTMenT

Millions of us Dollars

opeRaTions

inverse osmosis of sea water to be used

in cooling towers and vapor generation in

salina Cruz Refinery.

256 40.6 2001

salina Cruz urban waters Treatment

to be re-used in cooling towers.

90 8.4 2002

industrial waste water Treatment from

the Minatitlán Refinery.

241

39.8

2001

Minatitlán urban waters Treatment

to be re-used in cooling towers.

116 2001

invesTMenT on wasTe waTeR TReaTMenT sysTeMs

ConsTRuCTion anD opeRaTion of uRban- inDusTRiaL wasTe waTeR TReaTMenT pLanTs

Due to the size of the volumes of treated water, the most

important works in the last years have been the waste water

treatment plants of Minatitlán and Salina Cruz refineries, in the

States of Veracruz and Oaxaca respectively. There was an in-

vestment of 88.8 million dollars, and the capacity of water treat-

ment is 703 lps (liters per second), as it is shown in the table.

Successful case


Waste water discharges

Oil and grease are the typical contaminants from oil industry. Nevertheless, the Oxygen Biochemical Demand, which represents the amount of oxygen consumed by microorgan-isms during the biochemical oxidation of organic matter, indicates the quality of a waste water when all the organic contaminants are added up. This is why it is included for the first time in the annual report.

The handling of liquid hydrocarbons imply risks of losses, related to the operation and main-tenance of driving and process equipments, which are usually driven through drain systems to effluents treatments for their recovery.

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Oil extraction generates other contaminants, as the chlo-rides found in produced water. Hydrocarbons treatment and refining produce the sour water, which contains sulfur com-pounds. In the production of water vapor the streams emit-ted contain important quantities of solved solids. Moreover, there are minor effluents with the particular characteristics of the chemical processes which originate them.

Petróleos Mexicanos has primary, secondary and third waste water treatments, according specifically needs, and with the purpose of complying with the normativity of waste water discharges.

The graphic shows the contaminant discharges of the pa-rameters oil and grease, and OBD5. We can appreciate a reduction of 57% for O&G and 53.6% for OBD5, during the last five years.


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The waste water treatment plants allow the liquid to be reused and this reduces the volumes discharged into the recipient bodies. In ad-dition, they reduce the con-taminant charge, because the treated surplus are sent as a discharge, in compliance with the environmental nor-mativity: NOM-001-SEMAR-NAT-1996 or Discharge Special Conditions.

In the last two years the quality of discharges, represented as DBO5, has maintained its tendency to

drop, having reduced the contaminant charge in 8.6%, as a result of the complementary actions described in section “Water Utilization and Discharges”.

Oil and grease increased in 14.4% during the same period, due to a greater number of perforation units in PEMEX Exploration and Production activities. It was also due to the cleaning of patios and drains with the rehabilitation works of fire systems and drains segrega-tion in petrochemicals, in-creasing, by dragging effect, the hydrocarbons contribution to the effluents treatment.

Aiming to improve the environmental performance in this aspect, during 2006, there is a project, among others, of concluding the construction of the rain col-lector in Cadereyta Refinery. The purpose is to avoid merging industrial waters with rain waters, recover-ing the latter in a hydrologic basin especially critical, avoiding also the chronic risk of contaminating the neighboring properties.

oxiDaTion anD sTabiLiZaTion LaGoons


The waste water treatment plants permit the liquid to be reused and they reduce the volumes discharged into the recipient bodies


Successful case

ConsTRuCTion anD opeRaTion of souR waTeR TReaTMenT pLanTs

Oil refining generates water flows with high levels of sulfur compounds. This is why it is qualified as “sour”.

The elimination of 99% of these compounds is carried out in sour water treatment units, obtaining a water with the adequate quality to be reused in other processes, sending the surplus to effluents treatment.

With the reconfiguration of Madero and Cadereyta Refineries, 5 units were constructed for the handling of additional con-tributions of new processes, with a treatment capacity of 2.902 million cubic meters per year, which represents 1.5% of total crude water used for production of refining in 2005, as it is shown in the table.

CaDeReyTa RefineRy: “bunker” of processes advanced control, including sour water plants

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operations start up

2001

2003

sour water t reatment p lants

3 units in Cadereyta Refinery

2 units in Madero Refinery

Des igned capac i tyBarrels/day

30,000

20,000

new sour water Treatment plants


Hazardous waste

Petróleos Mexicanos’ processes and operations generate wastes. Some of them are classified as hazardous by the environmental regulation.

Oil wells drilling and maintenance produce drill cuttings; the processing and handling of liquid hydrocarbons create, mainly, oily sludges; and chemical and refining processes also create chemical wastes and spent catalysts. These are the primary industrial residues, even though there have been special cases of a single generation of polychlorinated biphenyls, leaden muds and hexachlorinated residues, which have been successfully handled and removed. Since the national regulation regarding hazardous wastes entered into force at the beginning of the 90’s, Petróleos Mexicanos has modified its activities though different ac-tions. It has segregated and minimized waste generation, applied specialized treatments, recycled and at first instance, searched for waste revaluation.

The efforts have been permanent, as it is shown in table Nº1; the hazardous wastes, that due to their toxicity, have been eliminated in the last years from PEMEX facilities.

YEAR FACILITY DISPoSALtons

TECHNoLoGY

2002 Minatitlán Refinery 430.1 Tetraethyl lead base antiknock additive. sold abroad for its treatment and re-utilization.

2002-2003

Cadereyta, Minatitlán and salamanca Refineries

55.1 Leaden muds. incineration in europe. Debit of 16,971 million pesos.included the decontamination of 34 containers which were later discarded as scrap for steel foundry.

2003 azcapotzalco ex-refinery 22.4 Leaden muds. incineration in europe. sourcing of 4,455 million pesos. included the decontamination of 3 containers which were later discarded as scrap for steel foundry.

2004 11 Refining facilities

151.9 polychlorinated biphenyls. incineration in europe.

2005 salamanca Refinery 17.97 Treatment and co-processing of spent sodium hydroxides.

Table nº1 examples of toxic residues disposal.


MinaTiTLán RefineRy: elimination of leaden muds and tetraethyl lead base antiknock

Treatment, with technology authorized by seMaRnaT, of transformers’ internal equipments which contained pCb’s

The graphic shows the evolution of the generation and disposal of hazardous wastes during the last five years, with a grater activity in 2004 and 2005, especially in PEMEX Exploration and Production. It is important to notice that toxic wastes, of a sole time generation, as 2004 PCB’s, are not really generated by oil activities. In that case they corresponded to transformers acquired by the company during the time when their use and production were world-wide allowed.

During 2005, extraordinary measures were taken to reduce the inventory obtaining, at the end of the year, the lowest level in the company’s historical records.

In refining, the disposal of oily sludges was especially important, as it is shown in table Nº2. Also, it is important to mention the disposal of 5.2 thousand tons of wastes containing heavy chlorinated hydrocarbons and 18 thousand tons of spent sodium hydroxides.

Generation and disposal of hazardous wastes


This results are complemented by opportune and adequate disposal of drill cuts within the wells’ drilling and maintenance areas. These generated 551.4 thousand tons, from which there was a disposal of 550.0 thousand, avoiding their accumulation.

To continue with the reduction of inventories, during 2006, PEMEX Refining will proceed to the disposal of 18 thousand tons of oily sludges and 600 tons of biological sludges.

Additionally, in order to comply with the schedules stipulated in the “General Law for Pre-vention and Integral Management of Wastes”, there are negotiations with the Secretaría de Hacienda y Crédito Público to obtain a multiannual operation budget for most of the work centers with a high generation of wastes, for their opportune elimination.

From 2006, drill cuttings will be considered as special handling waste, in accordance to the changes to normativity, which will reduce the costs almost to half.

A viable technological alternative would be to inject them into geological formations at more than 2,000 meters depth, resulting in additional savings.

FACILITY DISPoSAL ACTIoNS

MinaTiTLán Ref. 28,716 ton Treatment by thermal desorption.

MaDeRo Ref. 15,450 m3 Treatment to elaborate materials for road construction.

TuLa Ref 4,000 m3 Thermal treatment and destruction.

CaDeReyTa Ref. 3,600 ton Treatment and coprocessing in a cement furnace.

Tuxpan offshoRe TeRMinaL

14,313 m3 Treatment with application in roads and thermal destruction.

TabLe nº2. 2005 Disposal of oily sludges


Successful caseDisposaL of 29 ThousanD Tons of oiLy sLuDGes in MinaTiTLán RefineRy

During 100 years of the refinery operation, the oily sludges were

stored in rustic pits where the product was recuperated and the

sediments were accumulated.

In 2004, the decision was made to considering them as hazard-

ous wastes. With a previous quantification, the amount assigned,

in 2005 budget was 26.96 million MXP for their elimination by

thermal desorption, method authorized by SEMARNAT obtaining

a significant reduction in the oily sludges inventory.

TuLa RefineRy: handling of oily sludges stored in temporary confinement cells for its co-processing

MinaTiTLán RefineRy: haulage of oily sludges for their later treatment by thermal desorption

MaDeRo RefineRy: oily sludges stored in a concrete dike, and which disposal was madein 2005


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CLean inDusTRyDuring 2005, the number of Clean Industry Certificates, derived from environmental audits carried out within the Environmental Audit National Program (Progra-ma Nacional de Auditoría Ambiental - PNAA) of PROFEPA, kept the same level as in 2004. This was due to the fact that most of the work centers could endorse the certificates validity date because they had maintained the ad-equate standards regarding the fulfillment of the initial recommendations of their audits and the enforcement of environmental regulation.

Certifications

iso CeRTif iCaTesThere is a tendency to reduce ISO-9001 e ISO-14001 certifications. The experience obtained in these systems has tran-scended the individual certification for comprehen-sive certification, which include all the work centers of one line of business.

A good example is PEMEX Petrochemical that had received eight ISO-9001 and one ISO-14001 certifi-cate, and obtained one single certificate for each ISO, valid for all Petrochem-ical Complexes of this Subsi-diary Company.

Likewise, PEMEX Gas and Basic Petrochemical obtained the certification for the norm OHSAS 18001:1999 regarding occupational health management sys-tems, which is a comple-ment to the certifications it had obtained regarding quality and environment.

isMIn compliance with interna-tional agreements, the certification in the Interna-tional Code IGS/ISM (International Safety Man-agement) must be main-tained. The objective of this certification is to establish a management system for safe operation and pollution prevention from ships and their operating offshore facilities.

The code is a requirement from the International Maritime Organization (IMO) and the International Convention for the Safety of Life at Sea (SOLAS), and its application is mandatory in all the Member States.

In this report we updatethe Certificate obtained by PEMEX Refining for the major shipping fleet, the minor shipping fleet and the offshore terminals where they operate.


CLean inDusTRy

iso-9001 iso-14001 iso-18001 isM

ToTALS 36� 46 2� � �*

peMex exploration and production 233 10 1 - -

peMex Gas and basic petrochemicals 37 17 16 1 -

peMex Refining 91 18 11 - 1

peMex petrochemicals 8 1 1 - -

ohsas CeRTif iCaTions

In September 2005, the Sub-Direction of Production of PEMEX Gas and Basic Petrochemical obtained a certifica-tion of the norm OHSAS 18001:1999 regarding safety and occupational health management, which is a complement to the certifications it had obtained “regarding quality (ISO-9001) and environment (ISO-14001)”.

The objective of this norm is to establish the requirements that must be fulfilled by a safety and health work manage-ment system. Thereby it contributes to improve the well-being conditions of the workers that can be affected by the operative environment of a company.

The scope of the certifi-cate includes the following work centers:

Main officesCPG Poza Rica CPG CactusCPG Nvo. PEMEXCPG Cd. PEMEXCPG La VentaCPG MatapioncheCPG Reynosa-BurgosCPG ArenqueCPG Área Coatzacoalcos

Successful case

*The scope of the certification isM for peMex Refining includes 17 tankers and 11 vessels of the minor shipping fleet, 4 offshore terminals and 1 manager’s office.


Social development

PEMEX’s social development actions are aimed to contribute to create or fortify a mutual collaboration climate between Petróleos Mexicanos and its social surrounds, for it would have a positive repercussion in the achievement of the com-pany’s substantive programs, as well as in the improvement of the wellbeing and life style levels of the inhabitants of the oil industry influence zone.

As part of the efforts to construct a real culture of managerial social responsibility, in Petróleos Mexicanos the following supporting and bounding actions are carried out:

The driving principle is that the substantive activities of the company must be safe and respectful of the environment and the surrounding communities

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social responsibility

• Definition and negotiation of Coordination Agreements, Settlements and Execution Annexes, to establish the terms of understanding and collaboration with the social actors of the surrounds in the oil industry influence areas.

• Agreements to support social development programs, projects and actions, before government authorities, civil organizations, institutions and communitarian groups.

• Authorization and delivery of economic and material resources to third parties, as a support to social development works, programs and actions.

• Attention to conflicts and social problems derived from industrial accidents, emergencies or natural disasters.


CooRDinaTion aGReeMenTs

In 2005, certain terms of understanding and collabora-tion were renovated between Petróleos Mexicanos and the State government with greater activity of oil industry: Campeche, Chiapas, Tabasco, Veracruz and Tamaulipas. In the other cases the follow up of the agreements was carried out.

Through the subscription of these coordination agreements, the general engagements and strategies were established in order to integrate, in a balanced way, the oil industry activities to the local development of the States, in a legal framework and mutual respect. But, above all, the bases for PEMEX participation in local development processes were settled. PEMEX will participate through actions regarding environ-mental protection, industrial safety, social development, civil protection and investment and employment promotion.

suppoRT aGReeMenTs

In 2005, numerous meetings were held with government authorities, communitarian leaders, civil organizations and different social institutions.

PEMEX used many of those meetings as a forum to present to the community and the government authorities its industrial development programs and projects, including the prelimi-nary evaluation of their impact and the complementary mea-sures to grant their adequate insertion in the local develop-ment plans, in a sustainable way.

Likewise, an exhaustive process of settlements for institutional support means took place, based on the analysis and evalua-tion of the requests presented to PEMEX by third parties.

Cash anD non-Cash DonaTions

The contribution of cash and non-cash donations to third parties is part of the institutional answer to the support requests and petitions presented to Petróleos Mexicanos.

Coming mostly from states and municipalities govern-ments, civil organizations, institutions and communi-tarian groups, the requests received in 2005 were basi-cally demands for economi-cal resources, products as asphalt and fuels, pipes and diverse goods.

Those resources were mainly requirements to sup-port the execution of differ-ent infrastructure road and hydraulic works; productive projects, actions for the urban strengthening and public services; educational, cultural, health and housing projects; actions of environ-mental protection; works to rescue and preserve the archeological patrimony; and emergencies attention.

Work meetings as well as other bounding mechanisms and forms, helped to know the main worries and needs of the communities, who expressed their feelings about the activities that Petróleos Mexicanos carries out

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enTiTyDonations

n o n - C a s h D o n a T i o n s

ToTaL pesos asphalt fuels pipes Diverse properties

pesos

Real estate

units

subtotal

pesos Tons pesos Liters pesos Meters pesos pesos

CaMpeChe* 30,000,000 12,000 30,481,655 21,005,000 112,802,917 180,060 - 143,464,632 173,464,632

Chiapas 10,000,000 9,500 24,284,628 15,367,808 86,771,916 83,080 11,111,106 69,554 1 122,237,204 132,237,204

TabasCo 190,500,000 26,500 67,313,654 4,820,000 24,371,087 250,934 1 91,935,675 282,435,675

TaMauLipas 6,323,626 20,710 52,621,718 5,361,000 28,625,416 149,056 - 81,396,190 87,719,816

veRaCRuZ 15,818,899 63,760 161,999,054 7,112,900 37,736,663 37,785 4,916,306 838,374 4 205,490,397 221,309,296

subtotal 252,642,525 132,470 336,700,709 53,666,708 290,307,999 120,865 16,027,412 1,487,978 6 644,524,098 897,166,623

CoahuiLa - 7,260 18,441,403 470,000 2,472,565 220,200 - 21,134,168 21,134,168

GuanaJuaTo - 2,720 7,053,237 910,100 5,011,728 136,000 - 12,200,965 12,200,965

hiDaLGo 750,000 8,000 20,397,762 1,576,000 8,708,841 - - 29,106,603 29,856,603

nuevo León 5,000,000 9,720 24,720,805 1,310,000 7,093,502 - 1 31,814,307 36,814,307

oaxaCa - 10,660 27,077,870 1,195,000 6,349,030 37,785 4,916,306 - - 38,343,206 38,343,206

subtotal 5,750,000 38,360 97,691,077 5,461,100 29,635,666 37,785 4,916,306 356,200 1 132,599,249 138,349,249

aGuasCaLienTes - 600 1,524,083 - - - - 1,524,083 1,524,083

baJa CaLifoRnia - 3,200 8,128,442 300,000 1,528,284 - - 9,656,726 9,656,726

baJa CaLifoRnia

suR 2,000 5,080,276 250,000 1,289,475 - - 6,369,751 6,369,751

Chihuahua - 1,160 2,946,561 95,000 550,220 - - 3,496,781 3,496,781

CoLiMa - 3,000 7,620,414 350,000 1,828,596 - - 9,449,010 9,449,010

DisTRiTo

feDeRaL 1,589,910 - - 160,000 934,503 96,969 2 1,031,472 2,621,382

DuRanGo - 3,710 9,433,114 385,000 2,015,215 - - 11,448,329 11,448,329

GueRReRo - - - - - - - - -

JaLisCo - 320 812,844 25,000 124,432 - - 937,276 937,276

MéxiCo - - - 20,000 117,608 - 2 117,608 117,608

MiChoaCán - 1,380 3,505,393 135,000 731,575 80,200 - 4,317,168 4,317,168

MoReLos - - - - - - - - -

nayaRiT - - - - - - - - -

puebLa - 600 1,570,077 180,000 992,244 80,200 - 2,642,521 2,642,521

QueRéTaRo - 600 1,524,083 50,000 238,808 - - 1,762,891 1,762,891

QuinTana Roo - 2,000 5,080,276 1,250,000 6,487,089 - - 11,567,365 11,567,365

san Luis poTosí 2,000,000 2,920 7,417,203 280,000 1,503,611 41,087 - 8,961,901 10,961,901

sinaLoa - - - - - - - - -

sonoRa - 1,200 3,048,166 60,000 306,626 - - 3,354,792 3,354,792

TLaxCaLa - 160 406,422 - - - - 406,422 406,422

yuCaTán - 160 406,422 - - - - 406,422 406,422

ZaCaTeCas - 1,720 4,369,039 60,000 324,601 - - 4,693,640 4,693,640

subtotal 3,589,910 24,730 62,872,815 3,600,000 18,972,887 - - 298,456 4 82,144,158 85,734,068

T o T a L 261,982,435 195,560 497,264,601 62,727,808 338,916,552 158,650 20,943,718 2,142,634 11 859,267,505 1,121,249,940

speCiaL pRoJeCTs

DisTRiTo feDeRaL

(DepaRTMenT of

MaRine)

10,530,397 52,712,855 52,712,855 52,712,855

GoveRnMenT

of GuaTeMaLa

RepubLiC

317,974 1,775,911 1,775,911 1,775,911

GRanD ToTaL 261,982,435 195,560 497,264,601 73,576,179 393,405,318 158,650 20,943,718 2,142,634 11 913,756,271 1,175,738,706

Administration Corporate DirectionSocial Development Corporate Management Office

2005 Cash anD non-Cash DonaTions auThoRiZeD by peTRóLeos MexiCanos’ boaRD of D iReCToRs

*/ The agreement acuerdo Ca-314/2005 is modified with acuerdo Ca-499/2005. The original volume of marine diesel is changed and diesel is added in the following volumes: marine diesel 2,397,106 liters and diesel 2,602,894 liters, which has an impact on the original value of the agreement.


It is worth mentioning that the process of responding to the petitions takes as a reference the corresponding regulation in force, specifi-cally the guidelines to Grant Cash and Non-cash Dona-tions, as well as the Criteria for Assignment of Cash and Non-cash Donations, both authorized by the Board of Directors of Petróleos Mexicanos.

The oil industry head gov-ernment office authorized in 2005 a global amount of cash and non-cash dona-tions for 1,175 million 738 thousand 706 MXP, amount which can be compared, in a world-wide basis, to the resources that other companies assign to similar means.In 2005, the total amount of cash and non-cash dona-tions authorized by PEMEX represented the 4.4% of the Fondo de Aportacio-nes para la Infraestructura Social (FAIS – Contributions Fund for Social Infrastruc-ture) total, which is a part of the federal resources appointed to social matters investments.

For example, from the total of resources donated by PEMEX during 2001, the 12.5% was directed to municipalities governments, in 2005 this same share grew to 23.1%.

Giving these resources, PEMEX contributed in an important, and some times decisive way to settle the needs of small nucleus of people, settled in marginal localities in oil industry influence zones, improving their wellbeing levels.

In the last few years, PEMEX institutional policy has been gradually oriented to develop resources directly to the municipalities, which face the problems and needs of the communities located in the oil industry influence zone.

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Moreover, this support contributed also to improve the bonds and the relations between PEMEX and the authorities as well as social interest groups, allowing a good interaction between industry and its surroundings.

Another positive factor, associated to the deliver of cash and non-cash donations, was the transparency of the process. In accordance with institutional programs and intending to avoid any doubts about possible factors of discretionality in the resources assignment, during 2005, the total amount of the cash and non-cash donations, authorized by PEMEX’s Board of Directors, was published in the web page of the company http://www.pemex.com (in fast browsing, go to “en la comunidad”, then to “desarrollo social” and then to “zonas de influencia”), presenting their distribution by entity and type of donation.

ReLevanT soCioeConoMiC anD enviRonMenTaL aCTions

Among the programs, projects, works and actions carried out during 2005 with Petróleos Mexicanos contributions, the following cases are most representative:

• peMex-universidad veracruzana y niños & Crías, a.C. agreement Donation to implement research, conservation and sustainable development actions in the Sistema Arrecifal Veracruzano (veracruz state reef system)

• Donation for the program of management of the “Centros de Protección y Conservación de las Tortugas Marinas” (sea turtles protection and preservation centers) in veracruz state.

• Castro y Güiro bridge, over Tepetitán River, Macuspana Municipality, Tabasco state.

Multi-annual construction of mutual benefit peMex-Community.

• support to the fishery and aquaculture production in Tabasco state. oyster production projects; donation of boats, equipments and fishing gear; support to pejelagarto (alligator-head fish - atractosteus tropicus) and snook culture; maintenance and repairs of equipment and fishing gear.

• asphalt donation for the construction of urban road infrastructure in oil industry municipalities in Tabasco state.

• Donation of fuels for the machinery and equipment operation in Tamaulipas state Municipalities.

• Donation of asphalt to pave the roads of el Mante Municipality, in Tamaulipas state.

Successful cases


Natural protected areas

The protected natural areas are the main activity for the con-servation of biodiversity, properties and ecological services. The physical coincidences of PEMEX projects in these zones compel us to look for industrial development in order to reconcile the ecosystems’ integrity with the participation of local communities.

Protected Natural Areas are land or water portions of the national territory, which represent the different ecosystems and biodiversity, where the environment has not been altered in essence by human, and are subject to special protection, conservation, restoration and development regulations. There are, for most of them, management programs which define a zonification and the activities that can be developed in each zone.

Between the years 2001 and 2004, 57.31 million MXP were sourced for protected natural areas, allowing the co-existence of oil activities and populated areas within the protected environment. Those resources were applied in multi-annual projects.

One of the most important projects is the Biosphere Reserve Pantanos de Centla, in Tabasco State. This reserve is eco-logically rich as well as valuable for its energetic resources. In this zone, PEMEX produces annually 27.18 MDCF of sweet gas and has more than 400 facilities. A donation of 20 mil-lion pesos was given to “Espacios Naturales and Desarrollo Sustentable, A.C.“ for the Biosphere Reserve Pantanos de Centla, Tabasco, as well as for conservation, communitarian development and environmental education projects. These figures give an approximate idea of the relevance of this area for the country and why its use and its conservation must be conciliated.

2006 ConseRvaTion aCTiv iT ies

MaR neGRo LaGoon ResToRaTion, TaMauLipas sTaTe

During 2005, the studies for

the construction of a dam

were carried out. This dam

should help to recover the ideal

characteristics of the Mar

Negro lagoon channels, in

Tamaulipas State.

During the first six months of

2006, the dam construction

will continue with an embank-

ment –that will serve as an

access to equipment– and will

be integrated to the design for

the hydrological improvement

of the system. These works

will enlarge the wetland

contributing to help the envi-

ronmental conditions for the

migratory birds.

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ResouRCes Given beTween 2001 anD 2004 , appL ieD in MuLTi -annuaL pRoJeCTs

aRea appL iCaTion aMounT(thousands of pesos)

panTanos De CenTLa, Tab. (2001) – (swaMps) Conservation, communitarian development and environmental education. 10,000.00

panTanos De CenTLa, Tab. (2003) – (swaMps) natural resources protection.

Restoration of altered areas.

Research projects.

environmental education and productive projects.

10,000.00

LaGuna De TéRMinos, CaMp. – (LaGoon) Rehabilitation of outfalls and canals.

Reforestation.

fight fire.

environmental education.

Monitoring of L.T. environmental conditions.

wastes handling.

Communitarian projects.

10,000.00

sisTeMa aRReCifaL veRaCRuZano, veR. –

(Reef sysTeM)

environmental education program.

sav’s physical-chemical, biological and socioeconomic diagnosis.

octopus fattening productive project.

4,500.00

aRReCifes De Tuxpan, veR. – (Reefs)

eL TaJín anD eL ReMoLino, veR. – (siTes)

CaÑaDas De paTLa, pue. – (GuLLies)

CaMpaMenTos ToRTuGueRos, veR. –

(TuRTLe CaMps)

environmental education.

signs and signals.

ecotourism.

Reforestation and handling areas of el Tajín and el Remolino.

Technical study justifying the settlement of a natural protected area in the

“Totonac zone” of puebla and veracruz states which comprises the northern

sierra of puebla, the evergreen high forest and the Mesofilo mountain forest;

protection for aquifer recharge.

Tecolutla, alto Lucero and vega de alatorre, ver. turtle camps.

5,000.00

CuenCa De buRGos – (basin) eroded soils recuperation, Río bravo’s Delta wetlands restoration and

reforestation.

10,000.00

paRQue JaGuaRunDi – (paRK) Conservation, damping area, environmental education and carbon capture. 8,312.50

ToTaL $57 ,812 .50

JaGuaRunDi eCoLoGiCaL paRK

Located in the Coatzacoalcos zone, in the State of Veracruz, between Can-grejera and Pajaritos petrochemical complexes, the Jaguarundi Ecological Park has an area of approximately 1,000 ha (2,471 acres); it has well preserved patches of evergreen medium and high forest, pastures, secondary forests (acahuales), water bodies and degraded zones.

The objective of this natural protected area is to provide real and integral information about the capture of forest carbon during all the cycle, to pre-serve and develop a remain of evergreen medium forest, an area for envi-ronmental education and an ecological promenade, and, besides, to have a safeguard zone for the Cangrejera petrochemical complex. Between 2003 and 2005, the studies, of biological evaluations and a handling plan of carbon capture were carried out. In 2006, the engineering for the leisure and envi-ronmental education area of the reservation will be developed.


soci

al r

esp

on

sib

ility

peMex expLoRaTion anD pRoDuCTion: noRTheRn ReGionResToRaTion of Jasso, saLT iLLo anD MaR neGRo LaGoon sysTeM

Objective:

Restoration of Jasso, Saltillo

and Mar Negro lagoon’s

flora and fauna habitat, in

Tamaulipas State.

Description:

Recuperation of the pond and

the water depth, and also im-

provement of our knowledge

about the laminar air flow in

order to be able to have a posi-

tive influence on the recovery

of its environmental services.

Successful case

Investment:

5.1 MMXP

Results:

Recuperation of 5000 ha of

coast wetlands.

Successful casepeMex peTRoCheMiCaLsJaGuaRunDi eCoLoGiCaL paRK

Objective:

Conservation; carbon capture;

environmental education; con-

servation and leisure zone.

Description:

Evaluation of carbon capture

in semi-evergreen forest,

pasture and secondary forest

(acahual); restoration; habitat

conservation; leisure zone,

and environmental education.

Results:

A potential capture of 66,446

tons of carbon for the whole

park, which is approximately

66.44 tons by hectare. From

this, 36,263 tons correspond

to the transition of pastures to

mature secondary forests

(mature acahuales); 27,919,

to that of young acahuales,

mature acahuales, and 2,264,

to the remaining vegetation of

the park.

Investment:

8.3 MMXP


Land ecological ordinance

In accordance with the General Law of Ecological Balance and Environmental Protection, the Land Ecological Ordinance is a planning process, whose purpose is to evaluate and pro-gram land use and the management of natural resources within the national territory in order to preserve and restore the ecological balance and protect the environment. The authorities and the social groups must commit them-selves to the development of activities and the efficient use of their region resources.

In order to achieve a balance between productive activities and nature protection, the environmental authorities have designed the Land Ecological Ordinances, which are plan-ning tools allowing to correct tendencies and good develop-ment of human activities.

It is essential to have an official document which compli-ance shall be obligatory for all users, and which shall define the uses of land, simplify and insure the good fulfillment of our activities. The information generated regarding the biophysical, economic and social environment of the area being studied, provides valuable parameters to employ the necessary resources and support in the communities and environment, with scientific bases and veracious informa-tion, optimizing the use of PEMEX’s resources.

Due to the geographic loca-tion of the existing facilities, as well as its present and future projects, convinced that a decree of LAND ECOLOGICAL ORDINANCE is a valuable planning tool, PEMEX participates actively in the Land Ecological Ordi-nances (LEO) of the Cuenca baja del río Coatzacoalcos and of the Cuenca del río Tuxpan in Veracruz State; in the north of the country, in the LEO of the Cuenca de Burgos in Tamaulipas, Nuevo León and Coahuila States; and in the territorial Land Ecological Ordinance of the oil zone of Región V, in the northern zone of Chiapas State, with the project, which contract is still under legal review by the parties, on the LEO of the Gulf of Mexico, as PEMEX future is on the sea.

During 2005, the Land Ecological Ordinance of the Cuenca de Burgos region and the data actualization of the Cuenca baja del río Coat-zacoalcos were elaborated.

The decree is expected to be published in 2006, in the Diario Oficial de la Fede-ración. Also, for 2006, it is expected to have the Land Ecological ordinance of the Cuenca de Burgos re-gion, to continue with the LEO of the Cuenca baja del río Coatzacoalcos, as well as to elaborate the diagnosis of the LEO of the Cuenca del río Tuxpan.

The creation of Land Ecological Ordinances within the national territory gives legal certainty to PEMEX’s future growth activities in the country


Successful caseeCoLoGiCaL oRDinanCe of The CuenCa De buRGos ReGion

As an effort of the Coahuila, Nuevo León and Tamaulipas States Govern-ments, under the coordination of SEMARNAT, and with the participation of PEMEX, the Land Ecological Ordinance of the Cuenca de Burgos region, which has a surface of de 208, 805 km2 (80,620 mile2), is being achieved.

• how do the environmental

conflicts, identified in the di-

agnosis are evolved in time;

• which conflicts can occur

if there was a regional de-

velopment project (PEMEX,

CFE, SCT) of other industrial,

agricultural or farming activi-

ties, or urban growth;

• how could these conflicts be

prevented through the eco-

logical strategies based on

the model of LAND ECOLOGI-

CAL ORDINANCE, and

• the diagnosis studies of

the region, that would be

concluded, as well as the

ordinance prediction, assent

and decree phase.

The region has a rich and varied wild life, besides valuable fishing resources due to its adjacency to the Gulf of Mexico. It is a natural resources reservation, such as the non-associated gas. At this respect, in this zone, is located one of the four of the most important gas basins of this kind in the country

The Land Ecological Ordi-

nance, which started with the

signature of a Collaboration

Agreement between the Coa-

huila, Nuevo León and Tam-

aulipas States and the Federal

Government, will analyze:

soci

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on

sib

ility


,

peMex expLoRaTion anD pRoDuCTion: noRTheRn ReGion TeRRiToRiaL eCoLoGiCaL oRDinanCe of The ReGión De La CuenCa De buRGos (buRGos basin ReGion)

Successful case

Objective:

To have a sustainable planning

tool for the human activities

in the Región de la Cuenca de

Burgos (Burgos Basin region).

Description:

To have a socioeconomic and

environmental diagnosis har-

monizing the urban, industrial,

agricultural and farming

development with the conser-

vation of the natural resources

and environmental services of

the region.

Results:

Diagnosis and Regional

Land Ecological Ordinance

Program.

Investment: 3.5 MMXP

ReD-TaiLeD hawK, buteo jamaicensis

snowbaLL CaCTus, Mammilloydia candida

RaCCoon, procyon lotor

CuenCa De buRGos (buRGos basin)


Concordance with GRI framework2002 GRi indicators GC Chapter section page

vision anD sTRaTeGy

1.1. statement of the vision and strategy regarding sD 8 Message from the Director General - 2-3

1.2. statement from the Ceo describing key elements of the report Message from the Director General - 2-3

pRofiLe

2.1. name of the organization petróleos Mexicanos in context - 8

2.2. Major products and services petróleos Mexicanos in context infrastructure and main operational results

10

2.3. operational structure petróleos Mexicanos in context infrastructure and main operational results

10

2.4. Description of divisions, companies, subsidiaries... -

2.5. Countries in which the organization’s operations are located petróleos Mexicanos in context - 9

2.6. nature of ownership; legal form petróleos Mexicanos in context - 8

2.7. nature of markets served -

2.8. scale of the reporting organization petróleos Mexicanos in context - 9

2.9. List of stakeholders, key attributes of each, and relationship to the reporting organization -

RepoRT sCope

2.10. Contact person for the report Relevant notes. principles your opinion is important iii

2.11. Reporting period Relevant notes. principles Report’s Content ii

2.12. Date of most recent previous report -

2.13. boundaries of report (geographic, divisions...) -

2.14. significant changes -

2.15. basis for reporting on joint ventures, subsidiaries... -

2.16. nature and effect of any re-statements of information provided in earlier reports -

2.17. Decisions not to apply GRi Relevant notes. principles improvement Commitments iii

2.18. Criteria used in accounting (e/e/s costs and benefits) -

2.19. Changes from previous years in the measurement methods applied to e/e/s information -

2.20. policies and practices to enhance and provide assurance about the accuracy, completeness, and reliability Relevant notes. principles Range limits of the information ii

2.21. policy and current practice with regard to providing independent assurance for the full report Message from the Director General - 3

Relevant notes. principles independent verification process ii

2.22. Means by which report users can obtain additional information Relevant notes. principles information’s integration ii

GoveRnanCe sTRuCTuRe anD ManaGeMenT sysTeMs

3.1. Governance structure. Committees that are responsible for setting strategy petróleos Mexicanos in context Corporate Governance 13

3.2. percentage of the board of directors that are independent, non-executive directors petróleos Mexicanos in context Corporate Governance 13

3.3. process for determining the expertise board members need to guide the strategic direction of the organization -

3.4. board-level processes for overseeing the identification and management of e/e/s risks and opportunities petróleos Mexicanos in context Risk Management 13

3.5. Linkage between executive compensation and achievement of financial and non-financial goals -

3.6. organizational structure for oversight, implementation, and audit of e/e/s policies -

3.7. Mission and values statements, internal codes or principles, and polices relevant to e/e/s petróleos Mexicanos in context - 9

3.8. Mechanisms for shareholders to provide recommendations -

sTaKehoLDeR enGaGeMenT

3.9. basis for identification and selection of major stakeholders -

3.10. approaches to stakeholder consultation (frequency, type and group) social Responsibility social Development 54

3.11. Type of information generated by stakeholder consultations social Responsibility social Development 54

3.12. use of information resulting from stakeholder engagements social Responsibility social Development 54

oveRaRChinG poL iC ies anD ManaGeMenT sysTeMs

3.13. whether and how the precautionary approach or principle is addressed by the organization 7 -

3.14. voluntary e/e/s charters, sets of principles, or other initiatives to which the organization subscribes or which it endorses Relevant notes. principles Transparency Commitment 4-6

3.15. Memberships in associations and/or organizations -

3.16. policies and/or systems for managing upstream and downstream impacts -

3.17. approach to managing indirect e/e/s impacts -

3.18. Decisions regarding the location of, or changes in, operations -

3.19. programs and procedures pertaining to e/e/s performance There are some procedures and programs that are mentioned in diffrent chapters of the report

3.20. status of certification pertaining to e/e/s management systems environmental performance Certifications 52-53

eConoMiC peRfoRManCe inDiCaToRs

eC1. net sales petróleos Mexicanos in context Main economic results 11

eC2. Geographic breakdown of markets -

eC3. Cost of all goods, materials, and services purchased -

eC4. percentage of contracts that were paid in accordance with agreed terms -

eC5. Total payroll broken down by country or region -

eC6. Distributions to providers of capital -


eC7. increase/decrease in retained earnings at end of period petróleos Mexicanos in context Main economic results 11

eC8. Total sum of taxes of all types paid broken down by country petróleos Mexicanos in context Main economic results 11

eC9. subsidies received, broken down by country or region -

eC10. Donations to community, civil society, etc., per type of group social Responsibility social Development 54-59

eC11*. supplier breakdown by organization and country -

eC12*. Total spent on non-core business infrastructure development -

eC13*. The organization’s indirect economic impacts -

enviRonMenTaL peRfoRManCe inDiCaToRs

en1. Total materials use, other than water, by type 8 -

en2. percentage of materials used that are wastes from external sources 8 -

en3. Direct energy use segmented by primary source 8 statistical appendix - 66

en4. indirect energy use 8 statistical appendix - 66

en5. Total water use 8 statistical appendix - 66

en6. Location and size of land owned, leased, or managed in biodiversity-rich habitats 8 -

en7. Description of the major impacts on biodiversity 8 -

en8. Greenhouse gas emissions 8 environmental performance Climate Change 32-33

en9. use and emissions of ozone-depleting substances 8 -

en10. nox, sox, and other significant emissions to air 8 environmental performance emissions to air 26-29

en11. Total amount of waste by type and destination 8 environmental performance hazardous waste 48-51

en12. significant discharges to water by type 8 environmental performance water utilization and Discharges 40-41

en13. significant spills of chemicals, oils, and fuels 8 industrial safety spills and Leaks in pipelines 22-25

en14. significant environmental impacts of principal products and services 8 -

en15. % of the weight of products that may be recovered at the end of the products’ lifecycle and percentage that is actually recovered

8 -

en16. incidents of and fines for non-compliance (international declarations/conventions/treaties, and legal regulations) 8 -

en17*. initiatives to use renewable energy sources and to increase energy efficiency 9 Relevant notes about this report Transparency Commitment 4-5

en18*. energy consumption footprint of major products, expressed in Joules 8 -

en19*. other indirect energy use and implications 8 -

en20*. water sources and related ecosystems/habitats significantly affected by use of water 8 -

en21*. annual withdrawals of ground and surface water as a percent of annual renewable quantity of water available from the sources

8 -

en22*. Total recycling and reuse of water 8 -

en23*. Total amount of land owned, leased, or managed for production activities or extractive use

8 -

en24*. amount of impermeable surface as a percentage of land purchased or leased 8 -

en25*. impacts of activities and operations on protected and sensitive areas 8 -

en26*. Changes to natural habitats resulting from activities and operations and percentage of habitat protected or restored

8 -

en27*. objectives, programs, and targets for protecting and restoring native ecosystems and species in degraded areas

8 social Responsibility participation in natural areas - Land ecological ordinance

60-65

en28*. number of iuCn Red List species with habitats in areas affected by operations

8 -

en29*. business units currently operating or planning operations in or around protected or sensitive areas 8 social Responsibility participation in natural areas - Land ecological ordinance

60-65

en30*. other relevant indirect greenhouse gas emissions 8 -

en31*. all production, transport, import, or export of any waste deemed “hazardous” under the terms of the basel Convention annex i, ii, iii, and viii

8 environmental performance hazardous waste 48-51

en32*. water sources and related ecosystems/habitats significantly affected by discharges of water and runoff 8 -

en33*. performance of suppliers relative to environmental components of programs and procedures described in response to Governance structure and Management systems section

8 -

en34*. significant environmental impacts of transportation used for logistical purposes 8 -

en35*. Total environmental expenditures by type 7 -

soCiaL peRfoRManCe inDiCaToRs

employmentLa1. breakdown of workforce and workforce retained in conjunction with other employers (status, employment and contract type) -

La2. net employment creation -

La12*. employee benefits beyond those legally mandated -

Labor/Management RelationsLa3. % of employees represented by independent trade union organizations or other bona fide employee representatives 3 -

La4. policy and procedures involving information, consultation, and negotiation with employees over changes in the operations 3 -

La13*. provision for formal worker representation in decisionmaking or management, including corporate governance

3 -

health and safetyLa5. practices on recording and notification of occupational accidents and diseases (iLo recomendations) industrial safety personal accidents 14-19

La6. Joint health and safety committees (both-parties representatives) and % of workforce covered by any such committees -

La7. standard injury, lost day, and absentee rates and number of work-related fatalities Message from the Director General - 2-3

industrial safety personal accidents 14-19


La8. Description of policies or programs on hiv/aiDs -

La14*. evidence of substantial compliance with the iLo Guidelines for occupational health

-

La15*. Description of formal agreements with trade unions or other bona fide employee representatives covering health and safety at work

industrial safety personal accidents 14-19

Training and educationLa9. average hours of training (year/employee) by categories -

La16*. Description of programs to support the continued employability -

Diversity and opportunityLa10. Description of equal opportunity policies or programs, as well as monitoring systems 6 -

La11. Composition of senior management and corporate governance bodies 6 -

human RightshR1. hR policies, guidelines, and structures. Monitoring mechanisms 1 -

hR2. evidence of hR impacts as part of investment and procurement decisions (selection of suppliers/contractors) 1-2 -

hR3. policies and procedures to evaluate hR performance within the supply chain and contractors. Monitoring systems 1-2 -

hR8*. employee training on policies and practices concerning human rights 1-2 -

non-discriminationhR4. policies and programs preventing all forms of discrimination. Monitoring systems 1-6 -

freedom of association and Collective bargaininghR5. freedom of association policy and extent to which this policy is applied 3 -

Child LaborhR6. policy excluding child labor 5 -

forced and Compulsory LaborhR7. policy to prevent forced labor 4 -

Disciplinary practiceshR9*. Description of appeal practices -

hR10*. Description of non-retaliation policy and effective, confidential employee grievance system -

safety practiceshR11*. human rights training for safety personnel 1-2 -

indigenous RightshR12*. Description of policies, guidelines, and procedures to address the needs of indigenous people -

hR13*. Description of jointly managed community grievance mechanisms/authority -

hR14*. share of operating revenues from the area of operations that are redistributed to local communities -

Communityso1. policies to manage impacts on communities. procedures/ programs to address this issue, including monitoring systems social Responsibility social Development 54-59

so4*. awards received relevant to social, ethical, and environmental performance -

bribery and Corruptionso2. policy, procedures/management systems, and compliance mechanisms addressing bribery and corruption 10 -

political Contributionsso3. policy, procedures/management systems, and compliance mechanisms for managing political lobbying and contributions -

so5*. amount of money paid to political parties whose prime function is to fund political parties or their candidates -

Competition and pricingso6*. Court decisions regarding cases pertaining to anti-trust and monopoly regulations -

so7*. Description of policy and management systems for preventing anti-competitive behavior -

Customer health and safetypR1. policy and procedures/programs for preserving customer health and safety, including monitoring systems -

pR4*. number and type of instances of non-compliance with regulations concerning customer health and safety. penalties and fines assessed for these breaches

-

pR5*. number of complaints upheld by regulatory or similar official bodies to oversee or regulate the health and safety of products and services

-

pR6*. voluntary code compliance, product labels or awards with respect to social and/or environmental responsibility

-

products and servicespR2. policy, procedures/management systems, and compliance mechanisms related to product information and labeling -

pR7*. number and type of instances of non-compliance with regulations concerning product information and labeling -

pR8*. policy, procedures/management systems, and compliance mechanisms related to customer satisfaction -

advertisingpR9*. policies, procedures/management systems, and compliance mechanisms related to advertising -

pR10*. number and types of breaches of advertising and marketing regulations -

Respect for privacypR3. policy, procedures/management systems, and compliance mechanisms for consumer privacy -

pR11* number of substantiated complaints regarding breaches of consumer privacy -

* additional indicators


eMissions To aiR DisChaRGes To waTeRhaZaRDous wasTe GeneRaTion

hyDRoCaRbons sp iLLs anD LeaKs (* ) pRoDuCTionGReenhouse Gases (GhG)

eneRGy ConsuMpTionwaTeR hanDLinG

basiC ConTaMinanT MaTTeR

sox nox paRTiCLes voC’s ToCToTaL eMissions

o & G Tss Totn phosphaTes ToTaL boD wasTe GeneRaTion

RepoRTeD nuMbeR of spiLLs

esTiMaTeD spiLLeD QuanTiTy

RepoRTeD nuMbeR of LeaKs

esTiMaTeD LeaKeD QuanTiTy

pep, pGpb, ppQ pRoDuCTion anD CRuDe oiL pRoCess

Co2 eMissions (MTon)

ToTaL eneRGy ConsuMpTion (MbCoe)

ToTaL eneRGy ConsuMpTion (inCLuDes fLaRinG anD venTinG) (MbCoe)

ToTaL eneRGy ConsuMpTion peR uniT of ThRouGhpuT (MbCoe/TTon)

ToTaL eneRGy ConsuMpTion peR uniT of ThRouGhpuT (inCLuDes fLaRinG anD venTinG) (MbCoe/TTon)

use of CRuDe waTeR (m3)

ToTAL PEMEX 5�6,��7 �� ,088 �� ,3�5 55 ,077 32 ,653 7�5 ,04� 38� � ,856 3�7 5� 2 ,6�4 � ,633 70� ,678 283 3 ,�80 ��6 348 4�3 ,722 ,677 37 .444 �05 .2 ��7 .� 0 .00025 0 .00028 �� ,0�5 ,7��

PEP 7�,��0 4� ,602 � ,022 �3 ,466 �3 ,�60 �4� ,23� 8� .�62 3�� .677 0 .475 0 .�2� 40� .435 3�� .�5� 6�4 ,072 226 2�� 02 �� 2�0 ,��2 ,0�� .�25 2� .3 3� .3 0 .000�0 0 .000�3 � ,220 ,207

RMNE 40,370.3 10,032.0 215.3 54.0 1,335.4 52,007.1 0.492 1.419 - - 1.911 2.842 1,937 1 - 1 - 203,213,907 4.1 11.3 17.0 0.00006 0.00008 26,834

RMSO 11,461.9 5,976.9 184.9 1,254.6 1,040.2 19,918.5 53.102 116.885 - - 169.988 88.839 55,016 2 - - - 27,702,999 2.0 5.6 8.3 0.00020 0.00030 3,305,969

RN 11,923.2 5,020.8 188.2 7,610.1 6,811.1 31,553.5 0.314 1.473 0.464 0.074 2.325 1.716 897 141 167 65 2 21,676,397 1.1 2.8 4.1 0.00013 0.00019 2,946,976

RS 5,453.3 9,072.4 160.2 4,547.0 3,580.7 22,813.6 0.823 2.682 0.011 0.047 3.563 3.014 702 80 43 36 18 38,398,788 2.2 8.1 8.4 0.00021 0.00022 2,917,250

UPMP 2,781.0 11,500.0 273.2 - 392.3 14,946.7 26.431 197.217 - - 223.649 223.540 555,521 2 1 - - - 0.6 1.5 1.5 - - 23,179

PR 3�5,�3� 33 ,382 �6 ,��7 36 ,5�� 4 ,0�3 486 ,�22 �47 .234 66� .2�3 232 .634 33 .��2 � ,083 .�53 585 .876 50 ,205 55 2 ,�0� 6 � 67 ,243 ,7�2 �5 .642 4� .7 42 .8 0 .00062 0 .00064 86 ,46� ,6�8

REFINERIES 388,855.6 26,826.0 16,773.2 25,175.9 3,853.8 461,484.5 130.586 630.898 226.021 31.356 1,018.863 506.555 40,073 3 177 1 1 67,243,712 14.8 38.7 39.8 0.00058 0.00059 85,196,054

COMMERCIAL 3.9 10.6 0.8 1,011.0 16.1 1,042.4 0.351 0.995 0.300 1.065 2.710 1.350 545 - - - - - 0.0 0.2 0.2 - - 686,492

DISTRIBUTION 7,071.0 6,545.9 142.7 10,412.5 223.1 24,395.2 16.297 37.400 6.312 1.571 61.580 77.972 9,586 52 2,724 5 - - 0.9 2.8 2.8 - - 587,151

PGPB 3�,575 8 ,�86 666 2 ,625 �3 ,6�� 65 ,542 27 .537 �26 .363 52 .0�� 3 .4�5 20� .327 238 .�48 � ,848 � 68 7 248 4� ,4�5 ,�7� 5 .845 �5 .8 �5 .� 0 .00032 0 .00032 42 ,�27 ,667

CPGs 39,562 8,608 658 2,622 13,296 64,746 27.323 125.656 51.98 3.409 208.368 237.302 1,624 - - - - 49,415,171 5.7 15.1 15.2 0.00031 0.00031 42,032,742

PIPELINES 13.1 373.4 7.7 2.4 357.0 753.6 0.108 0.378 0.002 0.000 0.489 0.105 135 1 68 7 248 - 0.1 0.6 0.6 - - 67,429

TERMINALS 0.3 4.1 0.4 0.1 37.8 42.7 0.106 0.329 0.029 0.005 0.470 0.741 88 - - - - - 0.0 0.1 0.1 - - 27,496

PPQ �,42� 7 ,��8 7�0 2 ,387 � ,7�0 2� ,346 �33 .447 740 .�48 32 .247 �3 .4�7 �20 .�3� 488 .838 35 ,553 � 0 .0�0 � 80 6 ,07� ,703 6 .032 �8 .3 �� .� 0 .00302 0 .003�4 53 ,278 ,�3�

CPQ Camargo - - - 1.7 0.1 1.7 - - 0.000 - 0.000 0.002 16 - - - - - - - - - - 110,610

CPQ Cangrejera 34.8 3,163.3 236.6 846.9 1,061.0 5,342.7 39.175 233.244 14.327 4.664 291.411 175.793 13,996 - - - - 2,958,090 2.8 10.6 10.6 0.00359 0.00359 23,012,921

CPQ Cosoleacaque 22.5 884.7 31.3 20.5 54.9 1,013.9 12.407 28.063 - - 40.469 43.367 96 - - - - 629,864 1.0 1.3 1.3 0.00202 0.00202 7,156,579

CPQ Escolín 0.1 282.9 6.2 19.7 99.6 408.5 0.116 0.247 0.119 0.020 0.502 0.258 443 - - - - 27,745 0.1 0.2 0.2 0.00610 0.00610 73,852

CPQ Independencia 3,150.3 442.8 214.3 185.1 282.4 4,274.8 2.170 11.961 2.413 0.474 17.017 20.804 42 - - - - 88,063 0.2 0.6 0.9 0.00714 0.00975 1,747,823

CPQ Morelos 6,212.7 1,659.0 169.0 1,202.2 158.4 9,401.4 71.934 444.996 12.498 7.971 537.399 192.952 1,573 - - - - 1,787,962 1.5 4.5 4.9 0.00249 0.00276 17,309,660

CPQ Pajaritos 0.7 653.1 37.8 90.7 25.4 807.7 7.561 19.418 - - 26.978 52.451 19,300 - - - - 528,564 0.3 1.0 1.0 0.00195 0.00195 3,016,280

CPQ Tula 0.1 32.0 15.0 20.0 28.1 95.1 0.085 3.020 2.890 0.367 6.362 3.212 84 - - - - 51,416 0.0 0.2 0.2 0.00333 0.00333 850,414

Pipelines - - - - - - - - - - - - - 1 0.010 1 80 - - - - - - -

* These data were issue from other comptability systems of the company

Statistic appendix 2005, SISPAJanuaRy-DeCeMbeR 2005 DaTa CoMpTabiL iZeD in s ispaaLL uniTs aRe in Tons exCepT when iT is inDiCaTeD in The TiTLe

eMissions To aiR DisChaRGes To waTeRhaZaRDous wasTe GeneRaTion

hyDRoCaRbons sp iLLs anD LeaKs (* ) pRoDuCTionGReenhouse Gases (GhG)

eneRGy ConsuMpTionwaTeR hanDLinG

basiC ConTaMinanT MaTTeR

sox nox paRTiCLes voC’s ToCToTaL eMissions

o & G Tss Totn phosphaTes ToTaL boD wasTe GeneRaTion

RepoRTeD nuMbeR of spiLLs

esTiMaTeD spiLLeD QuanTiTy

RepoRTeD nuMbeR of LeaKs

esTiMaTeD LeaKeD QuanTiTy

pep, pGpb, ppQ pRoDuCTion anD CRuDe oiL pRoCess

Co2 eMissions (MTon)

ToTaL eneRGy ConsuMpTion (MbCoe)

ToTaL eneRGy ConsuMpTion (inCLuDes fLaRinG anD venTinG) (MbCoe)

ToTaL eneRGy ConsuMpTion peR uniT of ThRouGhpuT (MbCoe/TTon)

ToTaL eneRGy ConsuMpTion peR uniT of ThRouGhpuT (inCLuDes fLaRinG anD venTinG) (MbCoe/TTon)

use of CRuDe waTeR (m3)

ToTAL PEMEX 5�6,��7 �� ,088 �� ,3�5 55 ,077 32 ,653 7�5 ,04� 38� � ,856 3�7 5� 2 ,6�4 � ,633 70� ,678 283 3 ,�80 ��6 348 4�3 ,722 ,677 37 .444 �05 .2 ��7 .� 0 .00025 0 .00028 �� ,0�5 ,7��

PEP 7�,��0 4� ,602 � ,022 �3 ,466 �3 ,�60 �4� ,23� 8� .�62 3�� .677 0 .475 0 .�2� 40� .435 3�� .�5� 6�4 ,072 226 2�� 02 �� 2�0 ,��2 ,0�� .�25 2� .3 3� .3 0 .000�0 0 .000�3 � ,220 ,207

RMNE 40,370.3 10,032.0 215.3 54.0 1,335.4 52,007.1 0.492 1.419 - - 1.911 2.842 1,937 1 - 1 - 203,213,907 4.1 11.3 17.0 0.00006 0.00008 26,834

RMSO 11,461.9 5,976.9 184.9 1,254.6 1,040.2 19,918.5 53.102 116.885 - - 169.988 88.839 55,016 2 - - - 27,702,999 2.0 5.6 8.3 0.00020 0.00030 3,305,969

RN 11,923.2 5,020.8 188.2 7,610.1 6,811.1 31,553.5 0.314 1.473 0.464 0.074 2.325 1.716 897 141 167 65 2 21,676,397 1.1 2.8 4.1 0.00013 0.00019 2,946,976

RS 5,453.3 9,072.4 160.2 4,547.0 3,580.7 22,813.6 0.823 2.682 0.011 0.047 3.563 3.014 702 80 43 36 18 38,398,788 2.2 8.1 8.4 0.00021 0.00022 2,917,250

UPMP 2,781.0 11,500.0 273.2 - 392.3 14,946.7 26.431 197.217 - - 223.649 223.540 555,521 2 1 - - - 0.6 1.5 1.5 - - 23,179

PR 3�5,�3� 33 ,382 �6 ,��7 36 ,5�� 4 ,0�3 486 ,�22 �47 .234 66� .2�3 232 .634 33 .��2 � ,083 .�53 585 .876 50 ,205 55 2 ,�0� 6 � 67 ,243 ,7�2 �5 .642 4� .7 42 .8 0 .00062 0 .00064 86 ,46� ,6�8

REFINERIES 388,855.6 26,826.0 16,773.2 25,175.9 3,853.8 461,484.5 130.586 630.898 226.021 31.356 1,018.863 506.555 40,073 3 177 1 1 67,243,712 14.8 38.7 39.8 0.00058 0.00059 85,196,054

COMMERCIAL 3.9 10.6 0.8 1,011.0 16.1 1,042.4 0.351 0.995 0.300 1.065 2.710 1.350 545 - - - - - 0.0 0.2 0.2 - - 686,492

DISTRIBUTION 7,071.0 6,545.9 142.7 10,412.5 223.1 24,395.2 16.297 37.400 6.312 1.571 61.580 77.972 9,586 52 2,724 5 - - 0.9 2.8 2.8 - - 587,151

PGPB 3�,575 8 ,�86 666 2 ,625 �3 ,6�� 65 ,542 27 .537 �26 .363 52 .0�� 3 .4�5 20� .327 238 .�48 � ,848 � 68 7 248 4� ,4�5 ,�7� 5 .845 �5 .8 �5 .� 0 .00032 0 .00032 42 ,�27 ,667

CPGs 39,562 8,608 658 2,622 13,296 64,746 27.323 125.656 51.98 3.409 208.368 237.302 1,624 - - - - 49,415,171 5.7 15.1 15.2 0.00031 0.00031 42,032,742

PIPELINES 13.1 373.4 7.7 2.4 357.0 753.6 0.108 0.378 0.002 0.000 0.489 0.105 135 1 68 7 248 - 0.1 0.6 0.6 - - 67,429

TERMINALS 0.3 4.1 0.4 0.1 37.8 42.7 0.106 0.329 0.029 0.005 0.470 0.741 88 - - - - - 0.0 0.1 0.1 - - 27,496

PPQ �,42� 7 ,��8 7�0 2 ,387 � ,7�0 2� ,346 �33 .447 740 .�48 32 .247 �3 .4�7 �20 .�3� 488 .838 35 ,553 � 0 .0�0 � 80 6 ,07� ,703 6 .032 �8 .3 �� .� 0 .00302 0 .003�4 53 ,278 ,�3�

CPQ Camargo - - - 1.7 0.1 1.7 - - 0.000 - 0.000 0.002 16 - - - - - - - - - - 110,610

CPQ Cangrejera 34.8 3,163.3 236.6 846.9 1,061.0 5,342.7 39.175 233.244 14.327 4.664 291.411 175.793 13,996 - - - - 2,958,090 2.8 10.6 10.6 0.00359 0.00359 23,012,921

CPQ Cosoleacaque 22.5 884.7 31.3 20.5 54.9 1,013.9 12.407 28.063 - - 40.469 43.367 96 - - - - 629,864 1.0 1.3 1.3 0.00202 0.00202 7,156,579

CPQ Escolín 0.1 282.9 6.2 19.7 99.6 408.5 0.116 0.247 0.119 0.020 0.502 0.258 443 - - - - 27,745 0.1 0.2 0.2 0.00610 0.00610 73,852

CPQ Independencia 3,150.3 442.8 214.3 185.1 282.4 4,274.8 2.170 11.961 2.413 0.474 17.017 20.804 42 - - - - 88,063 0.2 0.6 0.9 0.00714 0.00975 1,747,823

CPQ Morelos 6,212.7 1,659.0 169.0 1,202.2 158.4 9,401.4 71.934 444.996 12.498 7.971 537.399 192.952 1,573 - - - - 1,787,962 1.5 4.5 4.9 0.00249 0.00276 17,309,660

CPQ Pajaritos 0.7 653.1 37.8 90.7 25.4 807.7 7.561 19.418 - - 26.978 52.451 19,300 - - - - 528,564 0.3 1.0 1.0 0.00195 0.00195 3,016,280

CPQ Tula 0.1 32.0 15.0 20.0 28.1 95.1 0.085 3.020 2.890 0.367 6.362 3.212 84 - - - - 51,416 0.0 0.2 0.2 0.00333 0.00333 850,414

Pipelines - - - - - - - - - - - - - 1 0.010 1 80 - - - - - - -

* These data were issue from other comptability systems of the company


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P ETRÓLEOS MEXICANOS

soc ia l respons ib i l i t ysusta inab le deve lopment

directory

Operations Corporate Management Office

Av. Marina Nacional 329Torre Ejecutiva, piso 35Col. Huasteca,11311Mexico, D.F.

Tel. 55 1944 9071Fax. 55 1944 8946


www.pemex.com

COMMENTS:

[email protected]

Adiabatic distillationProcess in which heat is supplied externally in the distillation tower to reduce the energy degradation and to diminish the environmental impact of the process.

API SystemsDecantation equipments for oil-water separation.

Aromatic hydrocarbons (AH)hydrocarbons with a cyclic structure that have usually a characteristic odor and possess the chemical properties of good solvents.

Carbon dioxide (CO2)Greenhouse gas produced by oxidation of compounds containing carbon.

CatalystA substance that helps and increases a reaction without being involved in the process. It increases the rate of the reaction at lower temperatures, remaining without change up to the end of the reaction. Nevertheless, in industrial processes, the spent catalyst must be replaced periodically to maintain an efficient production.

Cryogenic processesProcesses with an intensive use of energy to produce high pressures and low temperatures.

PitsConstructions to retain solid and liquid waists produced during well drillings.

Drill cuttingsSoil and rocks removed during exploration and production wells drillings. Oils impregnate cuttings through their contact with drilling muds.

Drilling mudsA mixture of clays, water and chemicals used in drilling operations to lubricate and cool the bit, bring drill cuttings to the surface, prevent well wall from collapsing and to control gas or crude oil upward flow.

Energy intensity rate in refineriesMeasure of energy efficiency in refineries, equivalent to the real energy consumption divided by the international theoretical consumption, taking into account the configuration and use of the refinery.

Floating membranessStorage tank covers that move according to the contained liquid level. They are used to reduce the emissions of hydrocarbons evaporation.

Frequency rateRatio of the number of disabling accidents occurred per million man hours with risk exposure in a given period, without including the accidents occurred on the way to/from work nor those due to third party actions and/or insecure conditions out of PEMEX control reach.

Fugitive emissionsEmissions not caught by a capture system which are often due to equipment leaks, evaporative processes and windblown disturbances. Typically they are considered as those of methane and other non-methane vOCs.

Gravity rateRatio of the number of days lost due to disabling accidents per million risk exposure man work hours in a given period of time, not including the accidents occurred on the way to/from work nor those due to third party actions and/or insecure conditions out of PEMEX control reach.

Greenhouse gases (GHG)Gases contributing to the formation of a thermally insulating layer around the Earth. The main GhG are: water vapor, carbon dioxide, methane, nitrous oxide, and halogenated hydrocarbons.

Heavy chlorinated hydrocarbonshydrocarbon chains in which a varied number of hydrogen atoms has been substituted by chlorine atoms. heavy chlorinated hydrocarbons are those chains containing from four to six chlorine atoms, known as hexachloride compounds.

CONCEPT AND DESIGN

Margara Cortés Chapula

Fernanda Ogarrio Compeán

WRITING AND COPY-EDITING

María Losón de Fábregas

TRANSLATION

Helena Contreras Chacel

PhOTOGRAPhY

PEMEX - Corporate management office of Social Communication

Jorge Contreras Chacel

Eduardo de la Vega

Héctor Elorduy

PRINTED IN MEXICO bY:

Ediciones Gráficas Zeta


www.pemex.com

Luis Ramírez CorzoDIRECTOR GENERAL

Carlos A. Morales GilACTING DIRECTOR GENERAL OF PEMEX

EXPLORATION AND PRODUCTION

Miguel Tame DomínguezACTING DIRECTOR GENERAL OF PEMEX REFINING

Roberto Ramírez SoberónACTING DIRECTOR GENERAL OF PEMEX GAS

AND bASIC PETROChEMICALS

Rafael Beverido LomelínDIRECTOR GENERAL OF PEMEX PETROChEMICALS

Marcos Ramírez SilvaCORPORATE DIRECTOR OF OPERATIONS

Federico Martínez SalasCORPORATE DIRECTOR OF ENGINEERING

AND PROJECTS DEvELOPMENT

Rosendo Villarreal DávilaCORPORATE DIRECTOR OF ADMINISTRATION

Juan José Suárez CoppelCORPORATE DIRECTOR OF FINANCE

José Néstor García RezaGENERAL ATTORNEY

Gregorio Guerrero PozasPEMEX INTERNAL CONTROL bUREAU

Rosendo Zambrano FernándezDIRECTOR GENERAL OF P.M.I. INTERNATIONAL COMMERCE

José Antonio CeballosDIRECTOR GENERAL OF ThE MEXICAN PETROLEUM INSTITUTE

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Heavy metalsMetals that may produce negative effects on flora, fauna or human health, in concentrations above certain limits. Under the Official Mexican Standard, only the following are considered: arsenic, cadmium, copper, chromium, mercury, nickel, lead, zinc, as well as cyanides.

Hexachlorinated residuesSee heavy chlorinated hydrocarbons.

HydrodesulfurizationProcess to eliminate sulfur from the molecules using hydrogen under pressure and a catalyst.

Implementation UnitsGroup of facilities that are defined in the SIASPA implementation framework.

ISO-14001ISO Norm of the International Standardization Organization, referring to environmental management systems.

Liquid recuperatorEquipment installed in pipelines to recover unwanted liquids.

Methane (CH4)It is considered a greenhouse gas. Conventionally it is not included among the gases known as volatile organic compounds.

Nitrogen Oxides (NOx)A generic term for nitrous oxides. These compounds are produced during combustion processes due to oxidation of nitrogen contained in the air. They contribute to the tropospheric ozone formation and that of acid rain.

Oil and grease (O&G)Any solid or viscous substance that can be recuperated to be dissolved in one of the following solvents: n-hexane, trichlorotrifluoroethane, or a blend of 80% n-hexane and 20% methyl tertiary butyl ether.

Oily sludgesSolid wastes with hydrocarbon content, such as solids associated with crude oil, impregnated in the soil and contention systems hydrocarbons sediments (tanks, pits, dams, etc.).

Oily watersWaters containing oil and grease.

Phenolic watersWaters containing phenol.

PhenolsCompounds formed by benzilic radicals associated with Oh- radicals.

PM10 and PM2.5 particlesParticulate matter (PM). Produced, among others by fuel combustion in vehicles and industries, and are part of atmospheric pollution. They are classified according to their diameter in microns (for example: PM10 = 10 microns diameter). Those with a minor diameter are usually more harmful to health, because they can penetrate deeper into the respiratory system.

Polychlorinated biphenyls (PCBs)Chlorinated hydrocarbons. These compounds are structured by a system of benzenic rings, in which a varied number of hydrogen atoms has been substituted by chlorine atoms. The PCbs are used, less and less, as oils in electric current transformers due to their dielectric properties and their ability to dissipate heat. These compounds are toxic, very stable and, therefore, very persistent in nature, because their destruction or degradation is very difficult. One of the few ways to eliminate these compounds is by high temperature controlled incineration.

Secondary energyThe group of fuels derived from primary energy sources, obtained in the transformation plants, with specific characteristics for their final consumption.

Sour gasNatural gas containing sulfidric acid, requiring treatment to be used as a fuel.

glossarySour watersWaters containing sulfidric acid (h2S).

Specific discharge conditionsA set of physical, chemical and biological parameters and their maximum permitted levels in waist water discharges, as determined by the Comisión Nacional del Agua (National Water Commission) for the responsible party or parties for the waist water discharge or for a specific receiving body, with the aim to preserve and control the water quality accordingly to the Ley de Aguas Nacionales (National Waters Law) and its regulations.

Sulfides (in wastewaters)Sulfur compounds present in wastewaters.

Sulfur Oxides (SOx)A generic term for compounds, generated by fuel combustion processes, with sulfur in their composition. They contribute to acid rain phenomenon.

Total non-methanic volatile organic

compounds (TNMVOC)Organic compounds resulting from incomplete combustion of hydrocarbons and that do not contain methane.

Total suspended particles (TSP)Term used to designate the total of particles and particulate matter in the air.

Total suspended solids (TSS)Particles suspended or present in wastewaters. They are held in a micro-fiberglass filtering mean with a 1.5 microns or equivalent pore diameter.

Total volatile organic compounds

(TVOC)They are the sum of the vOCs and the TMNvOCs.

Vapor recuperatorEquipment installed in tanks and fillers to recover hydrocarbons vapors, in facilities or processes with high rates of evaporation.

Volatile organic compounds (VOC)Organic compounds that easily vaporize at room temperature, including several hydrocarbons, oxygenated compounds and compounds with a sulfur content. They are usually grouped into methane and other non-methane vOCs. All vOCs contribute tropospheric ozone formation through a photochemical reaction with nitrogen oxides.

Abbreviations

ASIPAS Auditorías de Seguridad Industrial y Protección Ambiental (Industrial Security and Environmental Protection Audits)bbCOE billions of barrels of Crude Oil Equivalent bCO barrel of Crude OilbCOE barrel of Crude Oil Equivalent. Normalization of the caloric values of different sources of energy referred to the caloric value of a barrel of crude oil.CPG Centro Procesador de Gas (Gas Processing Center)DCO Dirección Corporativa de Operaciones (Operations Corporate Management Office)EbITDA Earnings before Interests, Taxes, Depreciations and AmortizationGRI Global Reporting Initiativelps Liters per SecondMbCOE Millions of barrels of Crude Oil EquivalentMCF Millions of Cubic FeetMDCF Millions of Daily Cubic Feet MTbE Methyl Tertiary butyl EtherMW Mega WatsPEP PEMEX Exploración y Producción (PEMEX Exploration and Production)PGPb PEMEX Gas y Petroquímica básica (PEMEX Gas and basic Petrochemicals)PPQ PEMEX Petroquímica (PEMEX Petrochemicals)PR PEMEX Refinación (PEMEX Refining)

safety, health and environmental protect ion i v

Verification letterindependent from the interest groupsTO ThE READERS OF ThE SUSTAINAbIL ITY REPORT

We have reviewed the social, environmental and, health and safety information’s reliability of the contents of report, with the realization of the following activities:

• Interviews with those in charge of the systems that provided the information of this report• Review of the system used to generate, add and provide the information• Scope’s analysis of the information provided• Double check by sampling of the calculations• Double check by sampling and recalculation of added data at the corporative level• Analysis of the tendencies’ interpretation• Double check by sampling of the information produced by the following subsidiary companies

Based on the work described, we did not find significant deviations or omissions in the reviewed information, nor did we observe other circumstances that could point to inappropriate procedures for securing information.

Other information comprised in the reportWe have reviewed the rest of the information included in the report by:

• Reviewing the internal documentation, as well as that included in the company’s intranet• Reviewing the company’s public information as well as that of third parties • Interviews with the heads of departments and with members of the personnel• Consultations with third parties participating in activities or programs mentioned in the report

Based on the above described work, we have not found significant deviations or omissions in the reviewed informa-tion, nor have we observed other circumstances that would point to the fact that the information expressed in the 2005 sustainability report, are not appropriately expressed.

KPMG Cárdenas Dosal, S.C.

Roberto Cabrera SilesMexico, D.F. May 24th, 2006

1. Report’s content

In order to present a vision of the company’s

behavior during the period 2001 - 2005, this re-

port has been designed according to an index

of contents, similar to those used in previous

annual reports. One of the company’s goals is

to continue widening and moving forward on

the topics included in this report.

2. Independent verification process

According to the range and conditions estab-

lished in the verification report, included here,

the firm KPMG Cárdenas Dosal, S.C. was re-

sponsible for the verification of the data of this

report. The work was carried out by members

of KPMG’s verification international team, from

Mexico, Spain and Holland.

The verification included visits to 11 plants and

three hospitals, during which the information

generation process that feeds the company’s

systems was reviewed, interviews with per-

sonnel from the corporative units and from the

subsidiary companies, as well as a revision of

the safety and environmental protection data

accounting methods.

The conclusions derived from the revision vis-

its are included in the verification report. The

improvement recommendations are included

in a report to the Director’s office, delivered by

KPMG on May 3, 2006. They are in the study

stage by PEMEX Director’s Office.

3. Information’s integration

The SISPA system that enables to achieve the

industrial safety and environment protection

in-line monthly report from each of the work

centers was established in 2001. The informa-

tion is captured in each center and is pro-

cessed and compiled for all the subsidiaries.

This is the statistic base that forms this report

relative to the data about emissions into the

air and water, greenhouse effect gases and,

production and consumption of energy and

crude water.

The safety data was obtained by hand consoli-

dation of the subsidiaries reported information.

4. Range limits of the information

Emissions into the air: these are estimates

based on the EPA AP-42 emissions factor, year

2000 supplement F, as well as on the stoi-

cheiometric calculations based on the oxidizers

thermal currents composition and the burn and

vent, of the sulfur recuperation plants.

Water consumption: the data is limited to the

hard water consumption.

Spills: The recording of leaks and spills is in

a review phase. In this report, only those of

hydrocarbons in pipelines are accounted for by

the recently created Subdirección de Coordi-

nación de Transporte por Ductos (Pipeline

Transport Coordination Assistant Manager’s

Office), a subdivision of the Dirección Corpora-

tiva de Operaciones (Operations Corporate

Management Office).

Frequency and gravity rate: accidents during

transport to/from work, and those caused by

third parties and/or unsafe conditions out of

PEMEX control. The rates reported do not

include after hours worked by non-union

personnel.

I. IntroductionWe have been appointed by Petróleos Mexicanos (PEMEX) to review the information and data relating to safety, health and environmental protection included in their report SAFETY, HEALTH AND ENVIRONMENT ANNUAL REPORT 2005, (from now on the Report) being the Dirección Corporativa de Operaciones de la Compañía (Company’s Operations Corpo-rate Management Office) responsible for its elaboration.

II. ScopeThe efforts and progress reached by PEMEX for the attainment of a more sustainable development.To review the report has been our responsibility, as well as to present its readers with a limited assurance about the following:

• The social, environmental and health and safety data contained in the report have been obtained from sources consid-ered reliable

• The information is adequately supported by internal documents or from third sources.

III. Criteria for the reviewWe have executed our work in accordance to the Standard for Assurance Engagements (ISAE 3000): Assurance Engage-ments other than Audits or Reviews of Historical Financial Information developed by International Auditing and Assurance Standards Board. Besides other requirements this standard requires that:• The team that carries out the work must have the specific professional knowledge, skill and competence, necessary to

understand and review the information included in the report, and that its members fulfill the requirements of the Pro-fessional Ethics Code of IFAC that ensures their independency.

• When an information’s limited assurance is granted, being of a lower level in deepness than a reasonable assurance, enough evidence in documents and in the company’s systems to back up the stated assertions about the company, must be available.

To this day, there are no existent generally accepted principles to carry out reports that reflect a company’s sustainable behavior. PEMEX uses its own criteria when establishing its indicators and their measurement, derived from the Global Guide Reporting Initiative (2002), as well as the way in which it interacts with its interest groups. At the same time, the fact that social and environmental information is subject to limitations due to their own nature, as well as the methods to measure, calculate and estimate, each indicator, must be taken into account. The utilized criteria is detailed in the section “Principles that govern this report”.

About the data regarding financial information and its results, as well as that of outside assurance offered by third parties, our work was limited to checking that these corresponded to information reviewed by those independent third parties.

IV. Completed work and conclusionsSOCIAL , ENvIRONMENTAL, hEALTh AND SAFETY INFORMATIONIn these areas, we have reviewed the contents of this report according to the principles of the AA1000 standard. To this end we have made an analysis of those contents to identify material information for the interest groups. We have founded our review of contents, on the investors’ expectancies, because they are socially responsible and with the highest influ-ence in the sector, on reports with similar characteristics made in PEMEX’s market, on the ethical, environmental and social behavior of the sector’s companies that have an impact on the written press, and on similar matters for which managerial associations as well as the civil society show interest in the area of influence of PEMEX’s market.

Data about the case studies:

They are based on estimates reached by the

heads of the subsidiary companies, following

their technical criteria. Besides a critical scru-

tiny, there are no more documents concerning

these estimates.

Data from previous years:

The data of previous years may be subject to

corrections through the continuous improvement

process of inventories. These corrections are

mainly due to an improvement in the estimation

factors calculation or to the addition of data from

other sources, that went unrecorded previously.

5. Transparencia Mexicana, A.C.’s participation in the preparation of this report

PEMEX requested Transparencia Mexicana,

A.C.’s support in the elaboration of the


report, therefore contributing to the strengthen-

ing of the Mexican society’s trust regarding the

information disclosed by the company.

With this goal in mind, Transparencia Mexicana,

A.C. set up a work group that created a question-

naire’s first draft of fifteen questions related to

the topics included in this report. The question-

naire was sent to PEMEX who answered it, iden-

tifying in each case the support data’s chapter

and section in the report.

The answers were examined and in a session

called for this purpose, evaluated by the work

group, in terms of their importance and of the

information disclosed on this matter.

6. Commitment for the improvement of future reports

PEMEX makes the commitment of a continued

effort in the widening and improvement of the

information it offers the citizens, about a sustain-

able development model in Mexico.

Five years after initiating the operation of the

SISPA, PEMEX will start designing a new infor-

mation system that will increase it’s indicators

number and reliability.

The company will make a special effort to

widen the report’s contents according to the

principles set by Global Reporting Initiative, in its

latest version.

7. Your opinion is important

For suggestions and clarifications about this re-

port contact PEMEX, through the e-mail address:

[email protected]


PEMEX Gas and Basic Petrochemicals PEMEX Refining PEMEX Petrochemicals Medical Services

Integral Active burgos, Tamaulipas

Gas Processing Centre burgos, Tamaulipas Madero Refinery, Tamaulipas Petrochemical Complex Morelos,

veracruzhospital Regional de Reynosa,Tamaulipas

Drilling Unit Pipeline Sector Offshore terminal Minatitlán Regional hospital, veracruzSeparation and

compression battery Storage and distribution terminal

Pipeline Sector Pipeline Sector

Reporting principles

i i annual report 2005 safety, health and environmental protect ion i i i v annual report 2005 safety, health and environmental protect ion v i

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