Obligation Pemex 6.625% ( XS0166205053 ) en EUR

Pemex

100 % ▼

Mexique

XS0166205053 ( en EUR )

6.625% par an ( paiement annuel )

04/04/2010 - Obligation échue

Prospectus brochure de l'obligation Pemex XS0166205053 en EUR 6.625%, échue

10 000 EUR

750 000 000 EUR

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 EUR, avec le code ISIN XS0166205053, paye un coupon de 6.625% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 04/04/2010

Offering Circular

Pemex Project Funding Master Trust

750,000,000 6.625 per cent. Guaranteed Notes due 2010
Unconditionally and irrevocably guaranteed by
Petróleos Mexicanos
(A Decentralized Public Entity of the Federal Government of the United Mexican States)

Issue Price: 98.67 per cent.
The payment of principal of and interest on the 6.625 per cent. Guaranteed Notes due 2010 (the "Notes") of the Pemex Project
Funding Master Trust (the "Issuer") will be unconditionally 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-Refinación and Pemex-Gas
y Petroquímica Básica (together, the "Subsidiary Guarantors"), each of which is a decentralized public entity of the Federal
Government of Mexico (the "Mexican Government"). The Notes are not obligations of, or guaranteed by, the Mexican
Government. The Issuer will pay interest on the Notes annually in arrears on April 4 of each year, beginning on April 4, 2004.
Unless previously redeemed or purchased and cancelled, the Notes will be redeemed at their principal amount on April 4, 2010.
The Notes are subject to redemption in whole, at par, at the option of the Issuer, at any time, in the event of certain changes
affecting Mexican taxes as described under "Terms and Conditions of the Notes -- Redemption and Purchase."
Prospective investors should have regard to the considerations described under "Risk Factors" beginning on page 9 of
this document.
Application has been made to list the Notes on the Luxembourg Stock Exchange.
The Notes 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 notes may be offered and sold only in offshore transactions in reliance on
Regulation S ("Regulation S") under the Securities Act or to qualified institutional buyers pursuant to Rule 144A ("Rule 144A")
under the Securities Act. For a description of certain further restrictions on offers and sales of Notes and distribution of this
document, see "Subscription and Sale and Transfer Restrictions."
All Notes will be in registered form, without coupons. Notes which are sold in transactions outside the United States in reliance
on Regulation S will be represented by interests in a definitive global Note (the "Regulation S Global Note") deposited with a
common depositary for, and registered in the name of a common nominee of, Euroclear Bank S.A./N.V. as operator of the
Euroclear System ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream, Luxembourg"). Notes which are
resold pursuant to Rule l44A under the Securities Act, as described under "Subscription and Sale and Transfer Restrictions," will
be represented by interests in a definitive global Note (the "DTC Restricted Global Note" and, together with the Regulation S
Global Note, the "Global Notes"), deposited with a custodian for, and registered in the name of a nominee of, The Depository
Trust Company ("DTC") on April 4, 2003 (the "Closing Date").

Joint Lead Managers
BNP PARIBAS
JPMorgan

April 3, 2003

The Issuer is a Delaware statutory trust established by the Guarantor pursuant to the terms of a trust agreement
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 Mexico
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, 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-Exploración y Producción (Pemex-Exploration and Production), Pemex-Refinación
(Pemex-Refining), Pemex-Gas y Petroquímica Básica (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 Annex A "--Consolidated Structure of PEMEX" (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) 5722-2500.
The Issuer, the Guarantor and the Subsidiary Guarantors, having made all reasonable inquiries, confirm that (i)
this Offering Circular contains all information in relation to the Issuer, the Guarantor, the Subsidiary Guarantors,
PEMEX, Mexico and the Notes which is material in the context of the issue and offering of the Notes, (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 Notes, (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 Notes, in light of the circumstances under which they were made, not misleading in any
material respect, (iv) the opinions and intentions expressed in this Offering Circular 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 accept
responsibility accordingly.
This Offering Circular does not constitute an offer of, or an invitation by or on behalf of the Issuer, the Guarantor,
the Subsidiary Guarantors or BNP Paribas and J.P. Morgan Europe Limited (each, a "Joint Lead Manager" and,
together, the "Joint Lead Managers") to subscribe for or purchase any of the Notes. The distribution of this
Offering Circular and the offering of the Notes in certain jurisdictions may be restricted by law. Persons into whose
possession this Offering Circular comes are required by the Issuer, the Guarantor, the Subsidiary Guarantors and
the Joint Lead Managers to inform themselves about and to observe any such restrictions. This Offering Circular
may only be used for the purposes for which it has been published. For a description of certain further restrictions
on offers and sales of the Notes and distribution of this Offering Circular, see "Subscription and Sale and Transfer
Restrictions."
The Notes have not been and will not be registered under the Securities Act and, subject to certain exceptions, may
not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in
Regulation S).
The Notes are being offered or sold outside the United States to non-U.S. persons in reliance on Regulation S, or
within the United States to "qualified institutional buyers", in reliance on Rule 144A. Prospective purchasers are
hereby notified that sellers of the Notes may be relying on the exemption from the provisions of Section 5 of the
Securities Act provided by Rule 144A. For a description of these and certain further restrictions on offers and sales
of the Notes and distribution of this Offering Circular, see "Subscription and Sale and Transfer Restrictions."
The Guarantor will file an application to register the Notes with the Sección Especial del Registro Nacional de
Valores (the Special Section of the National Registry of Securities or the "Special Section of the Registry")
maintained by the Comisión Nacional Bancaria y de Valores (the National Banking and Securities Commission) of

2

Mexico. Registration of the Notes with the Special Section of the Registry does not imply any certification as to the
investment quality of the Notes, the solvency of the Issuer, the Guarantor or the Subsidiary Guarantors or the
accuracy or completeness of the information contained in this Offering Circular. The Notes may not be publicly
offered or sold in Mexico.
No person has been authorized to give any information or to make any representations other than those contained in
this Offering Circular and, if given or made, such information or representations must not be relied upon as having
been authorized. This Offering Circular does not constitute an offer to sell or the solicitation of an offer to buy any
securities other than the securities to which it relates or an offer to sell or the solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this Offering
Circular nor any sale made hereunder shall, under any circumstances, create any implication that there has been no
change in the affairs of the Issuer or PEMEX since the date hereof or that the information contained herein is
correct as of any time subsequent to its date.
In connection with this issue, J.P. Morgan Europe Limited (the "Stabilizing Manager"), or any person acting
for the Stabilizing Manager, may over-allot or effect transactions with a view to supporting the market price
of the Notes at a level higher than that which might otherwise prevail for a limited period after the issue date.
However, there may be no obligation on the Stabilizing Manager or any agent of the Stabilizing Manager to
do this. Such stabilizing, if commenced, may be discontinued at any time and must be brought to an end after
a limited period.
For 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 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.

3

Table of Contents
Page
Currency of Presentation ............................................................................................................................. 5
Presentation of Financial Information ......................................................................................................... 5
Forward Looking Statements....................................................................................................................... 5
Selected Financial Data ............................................................................................................................... 6
Risk Factors ................................................................................................................................................. 9
Use of Proceeds ......................................................................................................................................... 18
Capitalization of Pemex............................................................................................................................. 19
Operating and Financial Review and Prospects ........................................................................................ 19
Recent Developments ................................................................................................................................ 22
Pemex Project Funding Master Trust ........................................................................................................ 34
Terms and Conditions of the Notes ........................................................................................................... 36
Form of the Notes ...................................................................................................................................... 50
Clearing and Settlement............................................................................................................................. 52
Taxation ..................................................................................................................................................... 56
Subscription and Sale and Transfer Restrictions ....................................................................................... 60
General Information................................................................................................................................... 63

Annex A Annual Report on Form 20-F of Petróleos Mexicanos for its Fiscal Year ended December 31,
2001 ............................................................................................................................................A-1
Annex B Unaudited Condensed Consolidated Financial Statements of Petróleos Mexicanos, Subsidiary
Entities and Subsidiary Companies as of June 30, 2002 and for the six-month periods ended June
30, 2002 and 2001 ...................................................................................................................F/B-1

4

Currency of Presentation
References in this Offering Circular to "Euros" or "" are to the lawful currency of the European Economic and
Monetary Union. References in this Offering Circular to "U.S. dollars", "U.S. $", "dollars" or "$" are to the lawful
currency of the United States of America. References in this Offering Circular to "pesos" or "Ps." are to the lawful
currency of Mexico. We use the term "billion" in this Offering Circular to mean one thousand million.
This Offering Circular 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. 9.1423 to
U.S. $1.00, which is the exchange rate that the Ministry of Finance and Public Credit gave to Petróleos Mexicanos
on December 31, 2001.
On April 2, 2003, the U.S. dollar noon buying rate for cable transfers in New York reported by the Federal Reserve
Bank of New York was Ps. 10.6730 = U.S. $1.00.

Presentation of Financial Information
The Issuer does not prepare separate financial statements; its results are consolidated with those of PEMEX, which
maintains its financial statements and records in nominal pesos. 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 Notes and the
Subsidiary Guarantors have, jointly and severally, unconditionally guaranteed the Guarantor's obligations under the
Guarantee and Subsidiary Guaranties (as defined below).
The audited consolidated financial statements of PEMEX as of December 31, 2001 and 2000 and for each of the
three years in the period ended December 31, 2001 (the "2001 Financial Statements") are included in Item 18 of the
2001 Form 20-F of Petróleos Mexicanos, which is included in this Offering Circular at Annex A. We also include
unaudited condensed consolidated financial statements of PEMEX as of June 30, 2002 and for the six-month periods
ended June 30, 2001 and 2002 (the "Interim Financial Statements"), which is included in this Offering Circular at
Annex B. The 2001 Financial Statements and the Interim Financial Statements were prepared in accordance with
accounting principles generally accepted in Mexico, or "Mexican GAAP," and as to the recognition of inflation, in
accordance with the guidelines established in Financial Reporting Standard NIF-06 BIS "A," section A. Notes 2 b)
and 15 to the 2001 Financial Statements describe the inflation accounting rules that apply to PEMEX. Mexican
GAAP differs in certain significant respects from United States generally accepted accounting principles ("U.S.
GAAP"). The differences that are material to the 2001 Financial Statements and to the Interim Financial Statements
are described in Note 19 to the 2001 Financial Statements and Note 12 to the Interim Financial Statements. We also
include summary financial data for the eleven months ended November 30, 2002 of Petróleos Mexicanos, the
Subsidiary Entities and the Pemex Project Funding Master Trust, but excluding the Subsidiary Companies, which is
not audited and was prepared in accordance with Mexican GAAP, except as to the recognition of inflation, which is
in accordance with the guidelines established in NIF-06 BIS "A," section A.

Forward-Looking Statements
This Offering Circular 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.

5

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.

Selected Financial Data
The selected financial data set forth below should be read in conjunction with, and are qualified in their entirety by
reference to, the audited 2001 Financial Statements and the unaudited Interim Financial Statements of PEMEX,
included in this Offering Circular as Annexes A and B, respectively. The selected financial data set forth below as
of the five years ended December 31, 2001 and as of June 30, 2002 have been derived from the consolidated
financial statements of PEMEX for the years ended December 31, 1997 and 1998 (which are not included herein),
the consolidated financial statements of PEMEX for the years ended December 31, 1999, 2000 and 2001 and the
Interim Financial Statements of PEMEX for the six-month periods ended June 30, 2001 and 2002. The consolidated
financial statements of PEMEX for the years ended December 31, 1999 and 2000 were audited by Mancera, S.C. (A
Member Practice of Ernst & Young Global), and the consolidated financial statements of PEMEX for the year ended
December 31, 2001 were audited by PricewaterhouseCoopers, S.C. See Annex A "Item 5Operating and Financial
Review and ProspectsChange in Independent Auditors." The Interim Financial Statements of PEMEX as of June
30, 2002 and for the six-month periods ended June 30, 2001 and 2002 have not been audited.
The consolidated financial statements are prepared in accordance with Mexican GAAP and, as to the recognition of
inflation, in accordance with the guidelines established in Financial Reporting Standard NIF-06 BIS "A," section A.
See Notes 2 b) and 15 to the 2001 Financial Statements for a discussion of the inflation accounting rules applicable
to PEMEX. Mexican GAAP differs in certain significant respects from U.S. GAAP. The most important of the
material items generating a difference between operating results under U.S. GAAP and Mexican GAAP are the
accounting methodologies for the treatment of exploration and drilling costs, pension premiums and post-retirement
benefit obligations, financial instruments, inflation, foreign exchange losses, capitalized interest and depreciation
and impairment of fixed assets, which are described in Note 19 to the 2001 Financial Statements included in Annex
A and Note 12 to the Interim Financial Statements included in Annex B.
For a further discussion of the accounting principles applicable to PEMEX, see Annex A "Item 3--Key
InformationSelected Financial Data," Annex A "Item 5--Operating and Financial Review and Prospects--U.S.
GAAP Reconciliation," and Note 12 to the Interim Financial Statements included in Annex B.

6

Selected Financial Data of PEMEX

Year Ended December 31,(1)
Six months ended June 30,(1)

1997
1998
1999
2000
2001
2001
2002
2002(2)

(in millions of pesos or U.S. dollars)

Income Statement Data

Amounts in accordance with

Mexican GAAP:

Net sales(3) ......................................
Ps. 264,030
Ps. 256,987 Ps. 334,814
Ps. 468,268 Ps. 445,330
Ps.227,054 Ps.222,645
$22,361

Total revenues(3) .............................
269,507
265,749
344,979
478,688
457,385
236,239
226,485
22,747
Total revenues net of the IEPS

Tax..................................................
231,779
199,894
256,630
409,132
362,187
196,366
166,320
16,704

Operating income ...........................
166,619
140,299
187,669
274,057
230,703
134,082
124,396
12,494

Income (loss) for the period ...........
7,133
(11,588)
(21,157)
(19,710)
(34,091)
(6,025)
(6,361)
(639)
Balance Sheet Data (end of period)

Amounts in accordance

with Mexican GAAP:

Cash and cash equivalents..............
17,429
14,631
23,987
27,827
14,442
N.A.
35,264
3,542

Total assets .....................................
339,452
416,691
482,248
563,468
556,883
N.A.
613,046
61,571

Long-term debt ...............................
56,339
87,615
83,127
104,370
123,170
N.A.
159,458
16,015

Total long-term liabilities...............
132,814
206,728
236,599
317,096
362,069
N.A.
415,148
41,695

Equity .............................................
153,123
167,138
161,469
150,605
122,866
N.A.
121,443
12,197
Amounts in accordance
with U.S. GAAP:

Net sales(4) ......................................
226,302
191,132
246,465
398,711
350,131
187,182
162,481
16,319

Operating Income(4) ........................
129,595
73,583
106,024
208,862
142,803
99,990
72,971
7,329

Income (loss) for the period ...........
9,177
(27,364)
(15,370)
(16,697)
(25,444)
(1,524)
(4,800)
(482)

Total Assets ....................................
257,251
283,540
362,947
434,743
432,687
N.A.
474,462
47,652

Equity (deficit) ...............................
59,951
29,735
12,904
(13,567)
(42,331)
N.A.
(51,928)
(5,215)
Other Financial Data

Amounts in accordance with

Mexican GAAP:

Depreciation and

Amortization...................................
11,482
15,697
23,941
26,061
28,453
13,963
14,262
1,432

Investments at cost(5) ......................
28,109
43,936
40,497
76,233
51,672
17,698
22,029
2,212
Ratio of earnings to fixed

charges:

Mexican GAAP(6) ...........................
1.54

U.S. GAAP(6) ..................................
1.81

Note: N.A. = Not Applicable.
(1)
Includes Petróleos Mexicanos, the Subsidiary Entities and the Subsidiary Companies. Beginning with the year ended December 31, 1998, includes
the financial position and results of the Issuer. Beginning with the year ended December 31, 2000, includes the financial position and results of Mex
Gas International, Ltd. For U.S. GAAP purposes, beginning with the year ended December 31, 2001, includes the financial position and results of
Pemex Finance, Ltd.

Each of the financial statements for the five years ended December 31, 2001 and for the six-month periods ended June 30, 2001 and 2002 was
prepared according to Mexican GAAP but recognizes the effect of inflation according to Mexican Financial Reporting Standard NIF-06 BIS "A,"
section A, which is different from Mexican GAAP Bulletin B-10. Mexican GAAP differs from U.S. GAAP. The most important of the material
differences between U.S. GAAP and Mexican GAAP affecting PEMEX are the accounting treatment of: (1) exploration and drilling costs, (2)
pensions and post-retirement obligations, (3) financial instruments, (4) inflation, (5) foreign exchange losses, (6) capitalized interest, (7)
depreciation and (8) impairment of fixed assets. For a further discussion of these and other differences, see Note 19 to the 2001 Financial
Statements in Annex A and Note 12 to the Interim Financial Statements in Annex B.
(2)
Conversions into U.S. dollars of amounts in pesos have been made at the established exchange rate for accounting purposes of Ps. 9.9568=
U.S. $1.00 at June 30, 2002. Such conversions should not be construed as a representation that the peso amounts have been or could be converted
into U.S. dollar amounts at the foregoing or any other rate.
(3)
Includes the IEPS Tax as part of the sales price of the products sold.
(4)
Figures do not include IEPS Tax as part of the sales price of the products sold.
(5)
Includes investments in fixed assets and capitalized interest, and excludes certain expenditures charged to the oil field exploration and depletion
reserve. See Annex A "Item 5--Operating and Financial Review and Prospects--Liquidity and Capital Resources."
(6)
Under U.S. GAAP, earnings for the years ended December 31, 1998, 1999, 2000 and 2001, and for the six-month periods ended June 30, 2001 and
2002, were insufficient to cover fixed charges. The amount by which fixed charges exceeded earnings was Ps. 21,076 million for 1998, Ps. 5,253
million for 1999, Ps. 624 million for 2000, Ps. 10,857 million for 2001, Ps. 3,833 million for the six-month period ended June 30, 2001 and
Ps. 8,023 million for the six-month period ended June 30, 2002. Under Mexican GAAP, earnings for the years ended December 31, 1998, 1999,
2000 and 2001, and for the six-month periods ended June 30, 2001 and 2002, were insufficient to cover fixed charges. The amount by which fixed
charges exceeded earnings was Ps. 5,020 million for 1998, Ps. 11,310 million for 1999, Ps. 4,092 million for 2000, Ps. 18,258 million for 2001,
Ps. 8,473 million for the six month period ended June 30, 2001 and Ps. 9,107 million for the six month period ended June 30, 2002.
Source: PEMEX's financial statements.

7

PEMEX does not currently prepare comprehensive price-level adjusted financial statements in accordance with
Bulletin B-10, "Recognition of the Effects of Inflation on Financial Information," under Mexican GAAP. For the
years ended December 31, 1997 and 1998, Mexico was deemed to be a hyperinflationary economy. Pursuant to
Rule 3-20(c) of Regulation S-X promulgated by the U.S. Securities and Exchange Commission, unaudited selected
financial data prepared on the basis of price-level adjusted financial information for these years has been included
reflecting the impact of U.S. GAAP adjustments and reclassifications. For the years ended December 31, 1999,
2000 and 2001, and for the six-month periods ended June 30, 2001 and 2002, Mexico was not considered a
hyperinflationary economy. However, supplemental unaudited price-level adjusted financial information for these
subsequent years has been provided in lieu of a comprehensive price-level adjustment that would result from
PEMEX's adoption of Bulletin B-10. In the opinion of PEMEX management, all adjustments that are necessary for
a fair presentation of the price-level adjusted financial information have been included herein. This unaudited price-
level adjusted financial data is derived from the supplemental price-level adjusted financial information included
elsewhere in this Offering Circular and should also be read in conjunction the 2001 Financial Statements and
Condensed Consolidated Financial Statements for the six-month periods ended June 30, 2001 and 2002.
Selected Financial Data of PEMEX
(continued)

Six months
Years Ended December 31,
ended June 30,

1997
1998
1999
2000
2001
2001
2002
Unaudited Price-level Adjusted
(in millions of constant 2001 pesos)
(in millions of constant
Information
June 30, 2002 pesos)
Income Statement Data

Amounts in accordance with U.S.

GAAP:
Net sales(1) ............................................... Ps. 363,422 Ps. 264,769 Ps. 292,849 Ps. 432,680 Ps. 357,215
Ps. 198,001 Ps. 164,065
Total revenues(1) ......................................
372,747
275,646
301,461
443,037
372,425
208,965
169,374
Net income (loss) ....................................
23,316
(19,843)
(21,069)
(36,573)
(17,251)
7,752
(5,871)
Balance Sheet Data (end of period)

Amounts in accordance with U.S.

GAAP:
Cash and cash equivalents.......................
26,413
18,694
27,287
29,052
14,488
N.A.

36,056
Total assets..............................................
485,938
517,330
555,136
590,540
576,220
N.A.

633,529
Long-term debt........................................
85,380
111,947
94,563
108,966
162,291
N.A.

200,431
Total long-term liabilities........................
202,614
267,281
291,081
357,433
388,095
N.A.

448,584
Total equity .............................................
190,388
180,156
167,970
132,604
110,890
N.A.

102,432

Note: N.A. = Not Applicable.
(1)
Total revenues and net sales figures do not include the IEPS Tax as part of the sales price of the products sold.
Source: Petróleos Mexicanos.

8

Risk Factors

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 fluctuate due to many factors, including:
changes in global supply and demand for crude oil and refined petroleum products;
availability and price of competing commodities;
international economic trends;
currency exchange fluctuations;
expectations of inflation;
actions of commodity markets participants;
domestic and foreign government regulations; and
political events in major oil producing and consuming nations.
PEMEX has no control over these factors. Historically, the weighted average price of the crude oil that PEMEX
exports has fluctuated from a high of U.S. $26.82 per barrel in 1984 to a low of U.S. $15.55 per barrel in 1999. In
2002, the weighted average price of PEMEX's crude oil exports was U.S. $21.58 per barrel, 16% higher than the
weighted average price during 2001. On March 26, 2003, the weighted average spot price of PEMEX crude oil was
U.S. $21.17.
When international crude oil and natural gas prices are low, PEMEX earns less export sales revenue, and, therefore,
lower 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 prices will directly affect PEMEX's results of operations and financial condition.
Decreases in PEMEX's estimates from time to time of Mexico's hydrocarbon reserves could reduce PEMEX's
potential future income.
The reserve data set forth in Annex A and under "Recent Developments" represent only estimates. Estimating
quantities of proved hydrocarbon reserves and projecting future rates of production and timing of development
expenditures is an inexact process and is subject to many factors beyond PEMEX's control. The accuracy of any
reserve estimate depends on the quality of available data and engineering and geological interpretation and
judgment. As a result, estimates of different engineers may vary. Additionally, the results of drilling, testing and
production subsequent to the date of an estimate may justify revision of an estimate. Therefore, proved reserve
estimates may be materially different from the quantities of crude oil and natural gas that PEMEX can ultimately
recover.
Pemex-Exploration and Production revises its estimates of Mexico's hydrocarbon reserves annually. This process
may result in material revisions to PEMEX's estimates of Mexico's hydrocarbon reserves.

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PEMEX is an integrated oil and gas company and is exposed to production, equipment and transportation risks.
PEMEX is subject to production, equipment and transportation risks that are common among oil and gas companies.
For example, PEMEX encounters:
production risk--i.e., risk related to fluctuations in production that may be affected by reserve levels,
accidents, mechanical difficulties, adverse natural conditions, such as bad weather and other acts of
God, as well as the inability to manage unforeseen production costs;
equipment risk--i.e., risk related to adequacy and condition of the production facilities, including
equipment becoming obsolete; and
transportation risk--i.e., risk related to the condition of pipelines and vulnerability of other modes of
transportation.
In particular, PEMEX's business is subject to the risk of:
pipeline explosions (oil or natural gas);
explosions in refineries, petrochemical plants, storage and distribution terminals or buoys and
monobuoys;
hurricanes in the Gulf of Mexico;
unexpected geological formations or pressures;
blow outs, which are sudden, violent explosions of oil, natural gas or water from a drilling well,
followed by an uncontrolled flow from the well;
fires and cratering, which is the caving in and collapse of the earth's structure around a blow out well;
and
mechanical failures and collapsed holes, particularly in horizontal wellbores.
The occurrence of any of these events could result in:
personal injuries or loss of life;
environmental damage and the necessary clean-up costs and expenses; or
other damage to PEMEX's property or the property of others.
In accordance with customary industry practice, PEMEX has purchased insurance policies covering some of these
risks. However, these policies do not cover all potential liabilities that may result from these risks. In addition,
insurance is not available for some of these risks. See Annex A "Item 4--Information on the Company--Business
Overview--PEMEX Corporate Matters--Insurance."

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