Obligation Pemex 9.25% ( USU70577AQ17 ) en USD

Pemex

100 % ▼

Mexique

USU70577AQ17 ( en USD )

9.25% par an ( paiement semestriel )

30/03/2018 - Obligation échue

Prospectus brochure de l'obligation Pemex USU70577AQ17 en USD 9.25%, échue

1 000 USD

354 055 000 USD

U70577AQ1

Petróleos Mexicanos (PEMEX) est une entreprise publique mexicaine, l'une des plus grandes compagnies pétrolières et gazières au monde, jouant un rôle crucial dans l'économie du Mexique.

L'Obligation émise par Pemex ( Mexique ) , en USD, avec le code ISIN USU70577AQ17, paye un coupon de 9.25% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 30/03/2018

LISTING PARTICULARS

Pemex Project Funding Master Trust
Unconditionally and irrevocably guaranteed by
Petróleos Mexicanos
(A Decentralized Public Entity of the Federal Government of the United Mexican States)
CUSIP Nos. of
ISIN Nos. of
Series of
Issue Price1
New Securities
New Securities
New Securities
706451AR2
US706451AR21 (Rule 144A)
U.S. $158,503,000 9.00% Guaranteed Notes due 2007
U70577AM0
USU70577AM03 (Reg. S)
(the "9.00% New Notes")
100.000%
706451AS0
US706451AS04 (Rule 144A)
U.S. $399,619,000 8.85% Guaranteed Notes due 2007
U70577AN8
USU70577AN85 (Reg. S)
(the "8.85% New Notes")
99.903%
706451AT8
US706451AT86 (Rule 144A)
U.S. $439,011,000 9% Guaranteed Notes due 2008
U70577AP3
USU70577AP34 (Reg. S)
(the "9% New Notes")
100.000%
706451AU5
US706451AU59 (Rule 144A)
U.S. $324,220,000 9¼% Guaranteed Bonds due 2018
U70577AQ1
USU70577AQ17 (Reg. S)
(the "9¼% New Bonds")
99.892%
706451AV3
US706451AV33 (Rule 144A)
U.S. $228,735,000 8.625% Guaranteed Bonds due
2023
99.875%
U70577AR9
USU70577AR99 (Reg. S)
(the "8.625% New Bonds")
706451AW1
US706451AW16 (Rule 144A)
U.S. $354,477,000 9.50% Guaranteed Bonds due 2027
U70577AS7
USU70577AS72 (Reg. S)
(the "9.50% New Bonds")
99.883%
U.S. $403,746,000 9.50% Puttable or Mandatorily
706451AX9
US706451AX98 (Rule 144A)
Exchangeable Securities ("POMESSM") due 2027
99.040%
U70577AT5
USU70577AT55 (Reg. S)
(the "9.50% New POMESSM")
The payment of principal of and interest on each series of securities listed above (the "New Securities") of the Pemex Project Funding Master Trust (the "Issuer")
will be unconditionally and irrevocably guaranteed by Petróleos Mexicanos (the "Guarantor"), a decentralized public entity of the federal government of the United
Mexican States ("Mexico"). The Guarantor's obligations will be unconditionally guaranteed jointly and severally by Pemex-Exploración y Producción (Pemex-
Exploration and Production), Pemex-Refinación (Pemex-Refining) and Pemex-Gas y Petroquímica Básica (Pemex-Gas and Basic Petrochemicals) (collectively the
"Subsidiary Guarantors"). The New Securities are not obligations of, or guaranteed by, the Mexican Government.
The New Securities are being issued pursuant to the Issuer's offers to exchange (the "exchange offers") properly tendered and accepted Old Securities (as defined
herein), which were issued by the Guarantor, for the New Securities of the Issuer. The exchange offers were conducted on the terms and subject to the conditions
set forth in an offering memorandum dated November 17, 2004 (the "Offering Memorandum") and the accompanying letter of transmittal.
Each series of New Securities other than the 9.50% New POMESSM will be redeemed at par on its maturity date, and will not be subject to early repayment or
mandatory exchange, except as described under "--Tax Redemption" and "--Events of Default; Waiver and Notice." The redemption price and procedures for the
9.50% New POMESSM is described under "Description of the New Securities Early Repayment or Mandatory Exchange of 9.50% New POMESSM.
The New Securities will contain provisions regarding acceleration and voting on amendments, modifications and waivers, which are commonly referred to as
"collective action clauses." Under these provisions, certain key terms of any of the series of New Securities may be amended, including the maturity date, interest
rate and other payment terms, without your consent. See "Description of the New Securities--Modification and Waiver."
Investors should consider the risk factors beginning on page 8 of this listing particulars.
We have applied, through our listing agent, to list all of the New Securities on the Luxembourg Stock Exchange. This document constitutes listing particulars in
relation to such application. These listing particulars have been prepared following the exchange offers and should be read in connection with the Offering
Memorandum.
The New Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or any securities laws and
may not be offered and sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act and applicable state securities laws. Accordingly, the New Securities may be offered and sold
only in offshore transactions in reliance on Regulation S under the Securities Act ("Regulation S", such securities the "Regulation S Securities") or to qualified
institutional buyers pursuant to Rule 144A under the Securities Act ("Rule 144A", such securities the "Restricted Securities"). For a description of certain further
restrictions on offers and sales of New Securities and distribution of this document, see "Plan of Distribution and Transfer Restrictions."
All New Securities will be in registered form, without coupons. Restricted Securities of each series initially will be represented by one or more notes or bonds, as
the case may be, in registered, global form without interest coupons (collectively, the "Restricted Global Securities"). Regulation S Securities of each series
initially will be represented by one or more notes or bonds, as the case may be, in registered, global form without interest coupons (collectively, the "Regulation S
Global Securities," and, together with the Restricted Global Securities, the "Global Securities"). The Global Securities will be deposited with Deutsche Bank Trust
Company Americas, as custodian for The Depository Trust Company ("DTC"), and registered in the name of DTC or its nominee, on or about December 30, 2004.
Joint Dealer Managers
Goldman, Sachs & Co.
UBS Investment Bank
December 30, 2004

1 Based on the issue price of the Old Securities tendered in the exchange.

You should rely only on the information contained in this listing particulars or to which this
listing particulars refers you. None of the Issuer, the Guarantor or the Subsidiary Guarantors have
authorized anyone to provide you with any different information. This listing particulars may only
be used where it is legal to sell these securities. You should not assume that the information
contained in this listing particulars is accurate as of any date other than the date on the front of this
listing particulars or that any information contained in any document incorporated by reference is
accurate as of any date other than the date of the document incorporated by reference.
_________________
TABLE OF CONTENTS
Notice to New Hampshire Residents Only .............................................................................................3
Notice to All Investors ............................................................................................................................4
Available Information.............................................................................................................................5
Currency of Presentation.........................................................................................................................6
Presentation of Financial Information.....................................................................................................6
Forward-Looking Statements..................................................................................................................7
Risk Factors ............................................................................................................................................8
Use of Proceeds.....................................................................................................................................14
Capitalization of PEMEX .....................................................................................................................15
Selected Financial Data.........................................................................................................................16
Recent Developments ...........................................................................................................................19
Pemex Project Funding Master Trust....................................................................................................31
Subsidiary Guarantors...........................................................................................................................33
Description of the New Securities ........................................................................................................35
Book Entry; Delivery and Form of New Securities ..............................................................................57
Registration Rights................................................................................................................................62
Plan of Distribution and Transfer Restrictions .....................................................................................65
Taxation ................................................................................................................................................68
Validity of Securities ............................................................................................................................73
Public Official Documents and Statements ..........................................................................................73
Independent Accountants......................................................................................................................73
About this listing particulars.................................................................................................................73
Jurisdictional Restrictions.....................................................................................................................74
General Information..............................................................................................................................79
Annex A............................................................................................................................................. A-1
Annex B ..............................................................................................................................................B-1

2

The Issuer is a Delaware statutory trust established by the Guarantor pursuant to the terms of a
trust agreement, as amended, dated as of November 10, 1998, among The Bank of New York, as
Managing Trustee, The Bank of New York (Delaware), as Delaware Trustee and the Guarantor, as sole
beneficiary. The Issuer is a financing vehicle for the long-term productive infrastructure projects of the
Guarantor, which are referred to by the Guarantor and the Mexican Government as "PIDIREGAS." The
Delaware office of the Issuer is The Bank of New York (Delaware), White Clay Center, Newark, DE
19711; the office of the Managing Trustee of the Issuer is The Bank of New York, Corporate Trust,
Global Structured Finance Unit, 101 Barclay Street, 21W, New York, NY 10286.
The Guarantor was established by a decree of the Mexican Congress on June 7, 1938 as a result
of the nationalization of the foreign-owned oil companies then operating in Mexico. The Guarantor and
its four subsidiary entities, Pemex-Exploration and Production, Pemex-Refining, Pemex-Gas and Basic
Petrochemicals and Pemex-Petroquímica (Pemex-Petrochemicals) (collectively, the "Subsidiary
Entities"), comprise Mexico's state oil and gas company. Each is a decentralized public entity of the
Mexican Government and is a legal entity empowered to own property and carry on business in its own
name. In addition, the results of a number of subsidiary companies that are listed in "Consolidated
Structure of PEMEX" in the Form 20-F (as defined below) (the "Subsidiary Companies"), including the
Issuer, are incorporated into the consolidated financial statements of the Guarantor. The Guarantor, the
Subsidiary Entities and the consolidated Subsidiary Companies are collectively referred to as "PEMEX."
PEMEX's executive offices are located at Avenida Marina Nacional No. 329, Colonia Huasteca, Mexico,
D.F. 11311, Mexico. PEMEX's telephone number is (5255) 1944-2500.
The Issuer, the Guarantor and the Subsidiary Guarantors (and not the Managing Trustee), having
made all reasonable inquiries, confirm that (i) this listing particulars contains all information in relation to
the Issuer, the Guarantor, the Subsidiary Guarantors, PEMEX, Mexico and the New Securities which is
material in the context of the issuance of the New Securities, (ii) there are no untrue statements of a
material fact contained in it in relation to the Issuer, the Guarantor, the Subsidiary Guarantors, PEMEX,
Mexico or the New Securities, (iii) there is no omission to state a material fact which is necessary in order
to make the statements made in it in relation to the Issuer, the Guarantor, the Subsidiary Guarantors,
PEMEX, Mexico or the New Securities, in light of the circumstances under which they were made, not
misleading in any material respect, (iv) the opinions and intentions expressed in this listing particulars
with regard to the Issuer, the Guarantor, the Subsidiary Guarantors, PEMEX and Mexico are honestly
held, have been reached after considering all relevant circumstances and are based on reasonable
assumptions, and (v) all reasonable inquiries have been made by the Issuer, the Guarantor and the
Subsidiary Guarantors to ascertain such facts and to verify the accuracy of all such information and
statements. The Issuer, the Guarantor and the Subsidiary Guarantors (and not the Managing Trustee)
accept responsibility accordingly.
Terms such as "we," "us" and "our" generally refer to Petróleos Mexicanos and its consolidated
subsidiaries, unless the context otherwise requires.
NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION
FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE
REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A
SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE
OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF
NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE,
COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT
AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION
MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE

3

MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY
PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE
MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY
REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
_________________
NOTICE TO ALL INVESTORS
In making an investment decision, prospective investors in the New Securities must rely on their
own examination of the Issuer, the Guarantor and the terms of the New Securities, including the merits
and risks involved. Prospective investors in the New Securities should not construe anything in this
listing particulars as legal, business or tax advice. Each prospective investor should consult its own
advisors as needed to make its investment decision and to determine whether it is legally permitted to
purchase the New Securities under applicable legal, investment or similar laws or regulations.
None of the Issuer, the Guarantor, the Subsidiary Guarantors or the Dealer Managers are making
offers to sell securities in any jurisdiction where such offers are not permitted. The distribution of this
listing particulars and the offering of the New Securities in certain jurisdictions may be restricted by law.
The Issuer, the Guarantor, the Subsidiary Guarantors and the Dealer Managers require persons in whose
possession this listing particulars comes to inform themselves about and to observe any such restrictions.
Petróleos Mexicanos, as Guarantor, will file an application to register the New Securities with the
Sección Especial (the Special Section) of the Registro Nacional de Valores (the National Registry of
Securities, or the "Registry") maintained by the Comisión Nacional Bancaria y de Valores (National
Banking and Securities Commission, or the "CNBV") of Mexico, which is a requirement under the Ley
del Mercado de Valores (the Securities Market Law) in connection with an offering outside of Mexico by
a Mexican issuer. Registration of the New Securities with the Special Section of the Registry does not
imply any certification as to the investment quality of the New Securities, the solvency of the Issuer, the
Guarantor or the Subsidiary Guarantors or the accuracy or completeness of the information contained in
this listing particulars. Furthermore, the information included in this listing particulars has not been
reviewed or authorized by the CNBV. The New Securities have not been registered with the Sección de
Valores (Securities Section) of the Registry and, consequently, the New Securities may not be offered or
sold publicly in Mexico.
The New Securities, the Guaranty and the Subsidiary Guaranties have not been registered under
the Securities Act and may not be offered or sold in the United States or to, or for the account or benefit
of, U.S. persons, except in accordance with an applicable exemption from the registration requirements
thereof. Accordingly, the New Securities are being offered and issued only (i) in the United States to
QIBs in a private transaction exempt from the registration requirements of the Securities Act, and
(ii) outside the United States to non-U.S. persons in reliance upon Regulation S. Accordingly, the New
Securities are subject to restrictions on transferability and resale and may not be transferred or resold
except as permitted under the Securities Act and applicable state securities laws, pursuant to registration
or exemption therefrom.
Investors should be aware that they may be required to bear the financial risks of an investment in
the New Securities for an indefinite period of time.
Notwithstanding anything in this listing particulars to the contrary, the Issuer, the Guarantor, the
Subsidiary Guarantors and each prospective investor (and any employee, representative or other agent of
the Issuer, the Guarantor, any Subsidiary Guarantor or any prospective investor) may disclose to any and
all persons, without limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this listing particulars and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax structure. However, any such

4

information relating to the tax treatment or tax structure is required to be kept confidential to the extent
necessary to comply with any applicable federal or state securities laws.
AVAILABLE INFORMATION
Petróleos Mexicanos files periodic reports and other information with the United States Securities
and Exchange Commission (the "SEC"). These reports, including the attached exhibits, and any reports
or other information filed by Petróleos Mexicanos are available at the SEC's public reference room in
Washington, D.C. Copies of these SEC filings may also be obtained at prescribed rates by writing to the
Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549.
Please call the SEC at 1-800-SEC-0330 for further information regarding the operation of the public
reference rooms. In addition, the SEC filings of Petróleos Mexicanos are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. These documents are also available, free of charge,
during usual business hours on any day (except Saturdays and Sundays and legal holidays) at the
specified office of the Exchange Agent in Luxembourg. You may also obtain copies of these documents
at the offices of the Luxembourg listing agent, Kredietbank S.A. Luxembourgeoise.
So long as any of the New Securities are outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, if at any time Petróleos Mexicanos is neither a
reporting company under Section 13 or Section 15(d) of the Exchange Act nor exempt from reporting
pursuant to Rule 12g3-2(b) thereunder, Petróleos Mexicanos will be required under the Indenture referred
to under "Description of New Securities--General" to furnish to a holder of a New Security and a
prospective purchaser designated by such holder, upon the request of such holder in connection with a
transfer or proposed transfer of such New Security pursuant to Rule 144A, the information required to be
delivered under Rule 144A(d)(4)(i) under the Securities Act.

5

CURRENCY OF PRESENTATION
References in this listing particulars to "U.S. dollars", "U.S. $", "dollars" or "$" are to the lawful
currency of the United States of America. References in this listing particulars to "pesos" or "Ps." are to
the lawful currency of Mexico. We use the term "billion" in this listing particulars to mean one thousand
million.
This listing particulars contains translations of certain peso amounts into U.S. dollars at specified
rates solely for your convenience. You should not construe these translations as representations that the
peso amounts actually represent the actual U.S. dollar amounts or could be converted into U.S. dollars at
the rate indicated. Unless we indicate otherwise, the U.S. dollar amounts have been translated from pesos
at an exchange rate of Ps. 11.236 to U.S. $1.00, which is the exchange rate that the Ministry of Finance
and Public Credit instructed us to use on December 31, 2003.
On December 22, 2004, the noon buying rate for cable transfers in New York reported by the
Federal Reserve Bank of New York was Ps. 11.1800 = U.S. $1.00.
PRESENTATION OF FINANCIAL INFORMATION
The financial position and results of operation of the Issuer are consolidated with those of
PEMEX, which maintains its financial statements and records in pesos. The Issuer does not publish non-
consolidated financial statements. The Issuer, the Guarantor and the Subsidiary Guarantors believe that
separate financial statements of the Issuer would not be material to you because (i) the Guarantor is an
SEC reporting company and controls the Issuer, (ii) the Issuer has no independent operations, and (iii) the
Guarantor has fully and unconditionally guaranteed the Issuer's obligations under the New Securities and
the Subsidiary Guarantors have, jointly and severally, unconditionally guaranteed the Guarantor's
obligations under the Guaranty and the Subsidiary Guaranty Agreement (as defined herein).
The audited consolidated financial statements of PEMEX as of December 31, 2002 and 2003 and
for each of the three years ended December 31, 2003 (the "Financial Statements") are included in Item 18
of Petróleos Mexicanos' annual report on Form 20-F for the year ended December 31, 2003 (the "Form
20-F"), which is included in this listing particulars as Annex A. The Financial Statements were prepared
in accordance with Mexican generally accepted accounting principles ("Mexican GAAP"), including the
recognition of inflation in accordance with Mexican GAAP Bulletin B-10, "Recognition of the Effects of
Inflation on Financial Information" ("Bulletin B-10"), and are presented in constant pesos with
purchasing power at December 31, 2003. See Note 2 b) to the Financial Statements for a discussion of
Bulletin B-10 and Notes 2 h), 2 l), 2 m), 2 n) and 2 o) to the Financial Statements for a discussion of the
inflation accounting rules applied. As a result of the adoption of Bulletin B-10, PEMEX has restated its
consolidated financial statements for the years ended December 31, 2001 and 2002 on the same basis as
the results for the year ended December 31, 2003 with respect to the recognition of the effects of inflation.
The Financial Statements were reconciled to United States generally accepted accounting principles
("U.S. GAAP"). Mexican GAAP differs in certain significant respects from U.S. GAAP; the differences
that are material to the Financial Statements are described in Note 19 to the Financial Statements.
Interim summary consolidated financial data of PEMEX as of and for the nine months ended
September 30, 2003 and 2004, which are not audited and were prepared in accordance with Mexican
GAAP, are also included herein. These unaudited interim consolidated data and all interim financial
information presented in this listing particulars are stated in constant pesos with purchasing power at
September 30, 2004. As a result of Mexican inflation during the first nine months of 2004, the
purchasing power of one peso at December 31, 2003 is equivalent to the purchasing power of Ps. 1.0327
at September 30, 2004. Accordingly, the Financial Statements are not directly comparable to the
unaudited interim consolidated data because they are stated in constant pesos as of different dates. In

6

addition, no reconciliation of the consolidated interim financial information to U.S. GAAP has been
prepared.
FORWARD-LOOKING STATEMENTS
This listing particulars contains forward-looking statements. Statements that are not historical
facts, including statements about our beliefs and expectations, are forward-looking statements. We have
based these statements on current plans, estimates and projections and you should therefore not place
undue reliance on them. Forward-looking statements speak only as of the date they are made, and we
undertake no obligation to update publicly any of them in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties. For a discussion of important
factors that could cause actual results to differ materially from those contained in any forward-looking
statement, you should read "Risk Factors" below.

7

RISK FACTORS
Your investment in the New Securities will involve some degree of risk. You should carefully
consider the following factors and the other information we have included or referred to in this listing
particulars.
Risk Factors Related to the Operations of PEMEX
Crude oil prices are volatile, and low oil prices negatively affect PEMEX's income
International crude oil prices are subject to global supply and demand and fluctuate due to many
factors beyond PEMEX's control. These factors include competition within the oil industry and with
other industries in supplying clients with competing commodities, international economic trends,
exchange rate fluctuations, expectations of inflation, domestic and foreign government regulations,
political and other events in major oil producing and consuming nations and actions taken by
Organization of the Petroleum Exporting Countries (OPEC) members and other oil exporting countries.
When international crude oil and natural gas prices are low, PEMEX earns less export sales
revenue, and, therefore, earns less income because its costs remain roughly constant. Conversely, when
crude oil and natural gas prices are high, PEMEX earns more export sales revenue and its income
increases. As a result, future fluctuations in international crude oil and natural gas prices will directly
affect PEMEX's results of operations and financial condition.
PEMEX is an integrated oil and gas company and is exposed to production, equipment and
transportation risks
PEMEX is subject to several risks that are common among oil and gas companies. These risks
include production risks (fluctuations in production due to operational hazards, natural disasters or
weather, accidents, etc.), equipment risks (relating to the adequacy and condition of PEMEX's facilities
and equipment) and transportation risks (relating to the condition and vulnerability of pipelines and other
modes of transportation).
More specifically, PEMEX's business is subject to the risks of explosions in pipelines, refineries,
plants, drilling wells and other facilities, hurricanes in the Gulf of Mexico and other natural or geological
disasters and accidents, fires and mechanical failures. The occurrence of any of these events could result
in personal injuries, loss of life, equipment damage, and environmental damage and the resulting clean-up
and repair expenses.
Although PEMEX has purchased insurance policies covering some of these risks, these policies
may not cover all liabilities, and insurance may not be available for all risks. See "Annex A--Item 4--
Information on the Company--Business Overview--PEMEX Corporate Matters--Insurance."
PEMEX has a substantial amount of debt that could adversely affect its financial health and results of
operations
PEMEX has a substantial amount of debt. At September 30, 2004, the total indebtedness of
PEMEX, excluding accrued interest, was approximately U.S. $42.6 billion, which is a 34.4% increase
over its total indebtedness, excluding accrued interest, of U.S. $31.7 billion at December 31, 2003.
PEMEX's level of debt may not decrease in the near or medium term and may have an adverse effect on
its financial condition and results of operations.

8

To service its debt, PEMEX relies on a combination of cash flows provided by operations,
drawdowns under its available credit facilities and the incurrence of additional indebtedness. Certain
rating agencies have expressed concern regarding both the total amount of debt and the increase in the
indebtedness of PEMEX over the last year. Any lowering of the credit ratings of PEMEX may have
adverse consequences on its ability to access the financial markets and/or its cost of financing. PEMEX
relies primarily on debt to finance its investments in capital expenditures. If PEMEX is unable to obtain
financing on terms that are favorable, this may hamper its ability to obtain further financing, and, as a
result, PEMEX may not be able to make the capital expenditures needed to maintain its current
production levels and increase Mexico's hydrocarbon reserves. See "--PEMEX must make significant
capital expenditures to maintain its current production levels and increase Mexico's hydrocarbon
reserves. Mexican Government budget cuts, reductions in PEMEX's income and inability to obtain
financing may limit PEMEX's ability to make capital investments" below.
PEMEX's compliance with environmental regulations in Mexico could result in material adverse effects
on its results of operations
A wide range of general and industry-specific Mexican federal and state environmental laws and
regulations apply to PEMEX's operations. Numerous Mexican Government agencies and departments
issue rules and regulations which are often difficult and costly to comply with and which carry substantial
penalties for non-compliance. This regulatory burden increases PEMEX's costs because it requires
PEMEX to make significant capital expenditures and limits PEMEX's ability to extract hydrocarbons,
resulting in lower revenues. For an estimate of PEMEX's accrued environmental liabilities, see "Annex
A--Item 4--Information on the Company--Environmental Regulation--Environmental Liabilities."
PEMEX publishes less financial information than U.S. companies are required to file with the SEC
PEMEX prepares its financial statements according to Mexican GAAP. Mexican GAAP differs
in certain significant respects from U.S. GAAP. See "Annex A--Item 3--Key Information--Selected
Financial Data" and Note 19 to the Financial Statements. In addition, PEMEX generally prepares U.S.
GAAP information on a yearly basis only. As a result, there may be less or different publicly available
information about PEMEX than there is about U.S. issuers.
Risk Factors Related to the Relationship between PEMEX and the Mexican Government
The Mexican Government controls PEMEX; it could limit PEMEX's ability to satisfy its external debt
obligations, and it could privatize PEMEX
Petróleos Mexicanos is a decentralized public entity of the Mexican Government, and therefore
the Mexican Government controls PEMEX, as well as its annual budget, which is approved by the
Mexican Congress. The Mexican Government has the power to intervene directly or indirectly in
PEMEX's commercial affairs. Such an intervention could adversely affect PEMEX's ability to make
payments under any securities issued or guaranteed by PEMEX, including the New Securities.
The Mexican Government's agreements with international creditors may affect PEMEX's
external debt obligations, including the Guaranties and the Subsidiary Guaranties. In certain past debt
restructurings of the Mexican Government, Petróleos Mexicanos' external indebtedness was treated on
the same terms as the debt of the Mexican Government and other public sector entities. In addition,
Mexico has entered into agreements with official bilateral creditors to reschedule public sector external
debt. Mexico has not requested restructuring of bonds or debt owed to multilateral agencies.

9

The Mexican Government would have the power, if federal law and the Constitución Política de
los Estados Unidos Mexicanos (the Political Constitution of the United Mexican States) were amended, to
privatize or transfer all or a portion of Petróleos Mexicanos and the Subsidiary Entities or its or their
assets. A privatization could adversely affect production, cause a disruption in PEMEX's workforce and
its operations, and cause PEMEX to default on certain obligations, including the New Securities. See also
"--Considerations Related to Mexico" below.
Petróleos Mexicanos and the Subsidiary Entities pay special taxes, duties and dividends to the Mexican
Government
The Mexican Government taxes Petróleos Mexicanos and the Subsidiary Entities heavily. In
2003, approximately 64.6% of the sales revenues of Petróleos Mexicanos and the Subsidiary Entities was
used to pay taxes to the Mexican Government. The Mexican Congress determines the rates of taxes and
duties applicable to Petróleos Mexicanos and the Subsidiary Entities from year to year depending on a
variety of factors. For further information, see "Annex A--Item 4--Information on the Company--
General--Taxes and Duties" and "Annex A--Item 5--Operating and Financial Review and Prospects--
IEPS Tax, Excess Gains Duty, Hydrocarbon Duties and Other Taxes." In addition, Petróleos Mexicanos
is obligated to pay minimum guaranteed dividends to the Mexican Government. For further information
on how the minimum guaranteed dividend is determined, see "Annex A--Item 5--Operating and
Financial Review and Prospects--Liquidity and Capital Resources--Equity Structure and the Certificates
of Contribution `A,'" "Annex A--Item 8--Financial Information--Dividends" and Note 13 to the
Financial Statements.
The Mexican Government has entered into agreements with other nations to limit production
Although Mexico is not a member of OPEC, in the past it has entered into agreements with OPEC
and non-OPEC countries to reduce global crude oil supply. PEMEX does not control the Mexican
Government's international affairs and the Mexican Government could agree with OPEC or other
countries to reduce PEMEX's crude oil production or exports in the future. A reduction in PEMEX's oil
production or exports could reduce its revenues. For more information, see "Annex A--Item 5--
Operating and Financial Review and Prospects--Export Agreements."
PEMEX does not own the hydrocarbon reserves in Mexico, and information on reserves is based on
estimates
The Political Constitution of the United Mexican States provides that the Mexican nation, not
PEMEX, owns the petroleum and other hydrocarbon reserves located in Mexico. Although Mexican law
gives Petróleos Mexicanos and the Subsidiary Entities the exclusive right to exploit Mexico's
hydrocarbon reserves, it does not preclude the Mexican Congress from changing current law and
assigning some or all of these rights to another company. Such an event would adversely affect
PEMEX's ability to generate income.
The information on oil, gas and other reserves set forth in Annex A is based on estimates.
Reserves valuation is a subjective process of estimating underground accumulations of crude oil and
natural gas that cannot be measured in an exact manner; the accuracy of any reserve estimate depends on
the quality and reliability of available data, engineering and geological interpretation and subjective
judgment. Additionally, estimates may be revised based on subsequent results of drilling, testing and
production. Therefore, proved reserve estimates may differ materially from the ultimately recoverable
quantities of crude oil and natural gas. Pemex-Exploration and Production revises its estimates of
Mexico's hydrocarbon reserves annually, which may result in material revisions to PEMEX's estimates of
Mexico's hydrocarbon reserves.

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