VANESSA AGUIRRE HEAD OF EUROPEAN OFFICE . PPI MÜNCHEN

The new procurement model in PEMEX after the Energy Reform

Who are we?

Antecedents Who are we? Energy Reform Who are the new actors in the industry? PEMEX Challenge

The New Pemex Procurement Division

Procurement Context DCPA Structure PPI Services Category Management

Who are we?

Antecedents Who are we? Energy Reform Who are the new actors in the industry? PEMEX Challenge

The New Pemex Procurement Division

Procurement Context DCPA Structure PPI Services Category Management

The most important source of government income and the largest company in Mexico

One of the top ten world crude oil producers

The sole producer of crude oil, natural and shale gas, and refined products in Mexico

Who are we?

(1) Statical yearbook 2013 (2) DCO PEMEX

• More than 150,000 employees1

• 6 Refineries 1 • 8 Petrochemical Complexes1

• 9 Gas Processing Complexes 1

• Pipelines: 67,000 Kms (approximately) 2

Snapshot

Facilities

44.1 55.3 55.7 66.6 69.6

36.1 48.0 55.2

59.4 52.6 0.4

0.4 0.4 0.6 0.8

80.6 103.8 111.4

126.6 123.0

2009 2010 2011 2012 2013

Exports Services Revenues total

PEMEX Context

Total Revenues (USD billion)

Production area

Refinery

Petrochemical Complex

Gas Processing Complex

Storage and Distribution Terminal

Pipeline

Maritime Route

Who are we?

Antecedents Who are we? Energy Reform Who are the new actors in the industry? PEMEX Challenge

The New Pemex Procurement Division

Procurement Context DCPA Structure PPI Services Category Management

The Energy Reform aims to attract investment and modernize the energy sector requiring changes in the industry.

Energy Reform

Creation of new Regulatory Entities

The participation of private companies in the sector

By 2016, domestic and foreign companies will be allowed to install gas stations In 2017, the price of LPG will be allowed to float to market prices Gasoline and diesel will be priced at market value in 2018

Who are we?

Antecedents Who are we? Energy Reform Who are the new actors in the industry? PEMEX Challenge

The New Pemex Procurement Division

Procurement Context DCPA Structure PPI Services Category Management

Who are the new actors in the industry?

Oil and Gas

Industrie

Goverment Authorities

Private Operators

State Operators

Goverment Authorities that manage and regulate the oil and gas activities

Who are the new actors in the industry?

Oil and Gas

Industrie

Goverment Authorities

Private Operators

State Operators

Goverment Authorities that manage and regulate the oil and gas activities

Individuals or corporations incorporated under applicable laws

Who are the new actors in the industry?

Oil and Gas

Industrie

Goverment Authorities

Private Operators

State Operators

Goverment Authorities that manage and regulate the oil and gas activities

PEMEX/ PSE Individuals or corporations incorporated under applicable laws

Who are the new actors in the industry?

Who are we?

Antecedents Who are we? Energy Reform Who are the new actors in the industry? PEMEX Challenge

The New Pemex Procurement Division

Procurement Context DCPA Structure PPI Services Category Management

The Reform implies a new challenge for PEMEX:

COMPETITION

PEMEX Challenge

The Reform implies a new challenge for PEMEX:

COMPETITION

• Experience • Knowledge • Personnel expertise • Cummulative assets • Competitive advantages

REFORM

PEMEX Challenge

The Reform implies a new challenge for PEMEX:

COMPETITION

• Experience • Knowledge • Personnel expertise • Cummulative assets • Competitive advantages

REFORM

Pemex, now as a business, will be able to compete

PEMEX Challenge

New participants, both as partners and competitors of PEMEX, to the energy sector

Substantial investment increase in the industry in

order to maximize resource productivity

Positive outlook after the Reform

PEMEX competes and operates as a

business

New participants

maximize resource

productivity

PEMEX competes and operates as a business

New participants, both as partners and

competitors of PEMEX, to the energy sector

Substantial investment increase in the industry in

order to maximize resource productivity

Positive outlook after the Reform

PEMEX competes and operates as a

business

New participants

maximize resource

productivity

PEMEX competes and operates as a business

New participants, both as partners and

competitors of PEMEX, to the energy sector

Substantial investment increase in the industry in

order to maximize resource productivity

Positive outlook after the Reform

PEMEX competes and operates as a

business

New participants

Maximize resource

productivity

PEMEX competes and operates as a business

Proven reserves reported to financial markets

Source: Reports to SEC: 20-F Forms for Petrochina, Royal Dutch/Shell, Petrobras, Total, BP, ENI, Statoil y Ecopetrol; 10K Forms for ExxonMobbil, Chevron, ConocoPhilips and 40-F Form for Encana

PEMEX Reserves are the 5th largest reported reserves worldwide.

Round Zero

Round One (Opportunities)

Who are we?

Antecedents Who are we? Energy Reform Who are the new actors in the industry? PEMEX Challenge

The New Pemex Procurement Division

Procurement Context DCPA Structure PPI Services Category Management

• Between $25 to $30 US Billion spend for equipment, services, leases, and public works procurement procedures

• Around 30,000 awarded contracts per year

• More than 3,000 employees dedicated to procurement

Snapshot

Procurement Context

Implementation of international best practices on three main subjects.

•Alignment with Corporate Strategy • Standardization of Process and Procedures •Process Governance. • Strategic Sourcing and Category Management •Market Intelligence

Strategy

• Strategic Alliances & Joint Ventures • Suppliers Development •National Content • Suppliers Evaluation •Demand Forecast

Suppliers

• Strategic Procurement by Business Units •Procurement Implementation Strategy • National and International Public Tenders • Restricted Bids • Direct Award

•Relationships with final users

Procurement

The New Pemex Procurement Division

Implementation of international best practices on three main subjects.

•Alignment with Corporate Strategy • Standardization of Process and Procedures •Process Governance. • Strategic Sourcing and Category Management •Market Intelligence

Strategy

• Strategic Alliances & Joint Ventures • Suppliers Development •National Content • Suppliers Evaluation •Demand Forecast

Suppliers

• Strategic Procurement by Business Units •Procurement Implementation Strategy • National and International Public Tenders • Restricted Bids • Direct Award

•Relationships with final users

Procurement

The New Pemex Procurement Division

Implementation of international best practices on three main subjects.

•Alignment with Corporate Strategy • Standardization of Process and Procedures •Process Governance. • Strategic Sourcing and Category Management •Market Intelligence

Strategy

• Strategic Alliances & Joint Ventures • Suppliers Development •National Content • Suppliers Evaluation •Demand Forecast

Suppliers

• Strategic Procurement by Business Units •Procurement Implementation Strategy • National and International Public Tenders • Restricted Bids • Direct Award

•Relationships with final users

Procurement

The New Pemex Procurement Division

Implementation of international best practices on three main subjects.

•Alignment with Corporate Strategy • Standardization of Process and Procedures •Process Governance. • Strategic Sourcing and Category Management •Market Intelligence

Strategy

• Strategic Alliances & Joint Ventures • Suppliers Development •National Content • Suppliers Evaluation •Demand Forecast

Suppliers

• Strategic Procurement by Business Units •Procurement Implementation Strategy • National and International Public Tenders • Restricted Bids • Direct Award

•Relationships with final users

Procurement

The New Pemex Procurement Division

Who are we?

Antecedents Who are we? Energy Reform Who are the new actors in the industry? PEMEX Challenge

The New Pemex Procurement Division

Procurement Context DCPA Structure PPI Services Category Management

CPO Procurement and

Supply

Management Strategy and Business

Model Support

Development and Relations with Suppliers and Contractors

Procurement and Supply

DCPA Structure

A U.S.A. Corporation wholly owned by Petroleos Mexicanos (“PEMEX”), with the main purpose of rendering International Procurement Services to PEMEX and its subsidiaries and its affiliates (“PEMEX Group”)

• Incorporated in Delaware

• Authorized to do Business in Texas

• Operating since November 1994

PPI Pemex Procurement International, Inc.

A U.S.A. Corporation wholly owned by Petroleos Mexicanos (“PEMEX”), with the main purpose of rendering International Procurement Services to PEMEX and its subsidiaries and its affiliates (“PEMEX Group”)

• Incorporated in Delaware

• Authorized to do Business in Texas

• Operating since November 1994

PPI Pemex Procurement International, Inc.

• Incorporated in München

• Operating since January 2015

Representative Office

Who are we?

Antecedents Who are we? Energy Reform Who are the new actors in the industry? PEMEX Challenge

The New Pemex Procurement Division

Procurement Context DCPA Structure PPI Services Category Management

• PPI provides international procurement services to facilitate the contracting with international companies for the supply of goods and rendering of services

• PPI services allow the ultimate end customer, PEMEX to place orders directly to suppliers

• The process enables a transparent and expedited purchasing procedure for all the parties involved

• HITEC, an IT system owned by PPI, allows PEMEX to remotely access and consult information about orders and suppliers

PEMEX Procurement International

Purchasing

Negotiation of

Framework Agreements

Expediting and

Inspection

Logistics and Customs

Supplier Invoice

Processing

Supply Base Management

PPI Services

Who are we?

Antecedents Who are we? Energy Reform Who are the new actors in the industry? PEMEX Challenge

The New Pemex Procurement Division

Procurement Context DCPA Structure PPI Services Category Management

Category Management

Rigs

• Ground equipment • Modular equipment • Jack-Up Plattforms • Semisubmersibles Plattaforms

Family Categories

Fuente: Análisis A.T. Kearney y Pemex

• Line Pipe • OCTG • Special Alloys • Polyethylene

Pipelines

Ships

• Maritime Transport • Food and lodging services offshore • Transportation conditioning fluids ( Boats Loderos and

Process ) • Stimulators Boats • Product Transport • FPSO’s y FSO’s

1

2

3

• Interventions Wells, Fracturing and stimulation, Shooting, Multiphase measurement, Sensors Fund, Radioactive tracers

• Flexible tubing, Tools and Fittings, Piping Insert, Finishing Equipment, Oil Records

• directional drilling, Cement, drilling fluids, geophysical logs and Control of solids and cuts

Services and Wells Completion

• Electromechanical works, Installing Structures and Systems

• General maintenance and support • Transportation and Installation of Fixed Platforms

Maintenance e Installation

Exploration Services

• Seismic Acquisition and Seismic Processing

Explosives • Supply of Explosives and Accessories

4

5

6

7

Family Categories

Fuente: Análisis A.T. Kearney y Pemex

• Construction and maintenance of offshore pipelines • Construction and maintenance of onshore pipelines

Pipeline Construction and Maintenance (without pipe)

Earth Static Equipment

• Storage tanks • Fumaces, heaters and boilers • Separators

Components Head and Wellhead

• Acquisition and installation of heads • Trees Valves and Parts • Acquisition and Hangers Installation

• Turbo pumps (acquisition and parts) • Turbocharger (acquisition and parts) • Turbo generator (acquisition and parts)

Powered by Turbine Rotating Equipment

11

9

10

8

Family Categories

Fuente: Análisis A.T. Kearney y Pemex

• Electrical Generators • Uninterruptible Power Units (UPS) • Electrical transformers • Other Materials and Electrical Equipment (Batteries,

Switches, etc.) • Electrical panels • Electrical Substations

Electrical Equipment and Systems

• Medical Services • Medical Equipment • Medical Material • Medicines

Health Services

Environmental Protection

• Remediation of Soil and Subsoil (spills) • Management and Disposal of Hazardous and Non

Hazardous

• Process Plants Construction • Offshore Plattforms Construction

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15

13

12

Family Categories

Fuente: Análisis A.T. Kearney y Pemex

Infrastructure Projects to Produce

• Personal Air Transport by Helicopter • Air Load Transport by Helicopter Helicópter Transport

• Oil and Gas Dehydration Service • Water Treatment Chemical Treatments services

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17

Family Categories

Fuente: Análisis A.T. Kearney y Pemex

THANK YOU VANESSA AGUIRRE HEAD OF EUROPEAN OFFICE . PPI MÜNCHEN vaguirre@pemexprocurement.com