Obligation Pemex 6.375% ( XS0197620411 ) en EUR

Pemex

100 % ▲

Mexique

XS0197620411 ( en EUR )

6.375% par an ( paiement annuel )

05/08/2016 - Obligation échue

Prospectus brochure de l'obligation Pemex XS0197620411 en EUR 6.375%, échue

1 000 EUR

850 000 000 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 XS0197620411, paye un coupon de 6.375% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 05/08/2016

Offering Circular

Pemex Project Funding Master Trust
850,000,000 6.375 per cent. Guaranteed Notes due 2016
Unconditionally and irrevocably guaranteed by
Petróleos Mexicanos
(A Decentralized Public Entity of the Federal Government of the United Mexican States)
Issue Price: 99.167 per cent.
The payment of principal of and interest on the 6.375 per cent. Guaranteed Notes due 2016 (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 (collectively, 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 August 5 of each year, beginning on August 5,
2005.
Unless previously redeemed or purchased and cancelled, the Notes will be redeemed at their principal amount on August 5, 2016.
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 8 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 under the Securities Act ("Regulation S") or to qualified institutional buyers pursuant to Rule 144A under the
Securities Act ("Rule 144A"). 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") on or about August 5,
2004 (the "Closing Date"). 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 or about the Closing Date.
Joint Lead Managers
Deutsche Bank
Dresdner Kleinwort Wasserstein

Co-Lead Managers
Barclays Capital

Credit Suisse First Boston

August 3, 2004

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 "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 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 (and not the Managing Trustee) 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 the Managers (as defined under "Subscription and Sale and Transfer Restrictions")
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 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."

2

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
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, Dresdner Bank AG London Branch (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. 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
Available Information..................................................................................................................................5
Currency of Presentation..............................................................................................................................5
Presentation of Financial Information..........................................................................................................5
Forward Looking Statements.......................................................................................................................6
Selected Financial Data................................................................................................................................6
Risk Factors .................................................................................................................................................9
Use of Proceeds..........................................................................................................................................14
Capitalization of PEMEX ..........................................................................................................................14
Recent Developments ................................................................................................................................15
Pemex Project Funding Master Trust.........................................................................................................22
Subsidiary Guarantors................................................................................................................................24
Terms and Conditions of the Notes............................................................................................................26
Form of the Notes ......................................................................................................................................41
Clearing and Settlement.............................................................................................................................43
Taxation .....................................................................................................................................................47
Subscription and Sale and Transfer Restrictions .......................................................................................51
General Information...................................................................................................................................55

Annex A Annual Report on Form 20-F of Petróleos Mexicanos
for its Fiscal Year ended December 31, 2003..................................................................................... A-1

4

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 Paying and Transfer Agent in Luxembourg.
Currency of Presentation
References in this Offering Circular to "Euros" or "" are to the currency introduced on January 1, 1999 pursuant to
the treaty establishing the European Community, as amended. 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. The term "billion" in this Offering
Circular is used 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 represent the
actual U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless indicated 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 Petróleos Mexicanos to use on December
31, 2003.
On August 2, 2004, the U.S. dollar noon buying rate for cable transfers in New York reported by the Federal
Reserve Bank of New York was Ps. 11.4298 = U.S. $1.00 and U.S $1.2034 = 1.00 (which is approximately U.S.
$1.00 = 0.8310).
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 Notes and the Subsidiary Guarantors have, jointly and severally, unconditionally guaranteed
the Guarantor's obligations under the Guarantee and Subsidiary Guaranty Agreement (as defined below).
The audited consolidated financial statements of PEMEX as of December 31, 2003 and 2002 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
Offering Circular 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.

5

Interim summary consolidated financial data of PEMEX as of and for the six months ended June 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 Offering Circular are
stated in constant pesos with purchasing power at June 30, 2004. As a result of Mexican inflation during the first six
months of 2004, the purchasing power of one peso at December 31, 2003 is equivalent to the purchasing power of
Ps. 1.016 at June 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.

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. 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 Financial Statements. The selected financial data set forth below as of and for the three years ended
December 31, 2003 have been derived from the Financial Statements, which were audited by
PricewaterhouseCoopers, S.C. The selected financial data set forth below as of and for the six months ended June
30, 2003 and 2004 have been derived from PEMEX's condensed consolidated interim financial statements, which
were not audited.
The Financial Statements and the condensed consolidated interim financial data were prepared in accordance with
Mexican GAAP. Beginning January 1, 2003, the effects of inflation were recognized in accordance with NIF-06
BIS "A" Section C, which requires the adoption of Bulletin B-10. 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, in order
to present its results for each of these years 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 recognition of inflation in accordance with the
guidelines established in Bulletin B-10 consists of, among other things, the recognition in the income statement of
comprehensive financing cost (including the determination of gains or losses in monetary position and treatment for
foreign exchange gains or losses), the restatement of the equity accounts and the presentation of the financial
statements for all periods in constant pesos as of the date of the latest financial statement. See Note 2 b) to the
Financial Statements for a summary of the effects of adoption 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. As discussed above, the consolidated interim financial data set forth below is stated in constant pesos
with purchasing power as of June 30, 2004, and not as of December 31, 2003 as is the case with the information
presented for the three years ended December 31, 2003. Accordingly, the consolidated interim financial information
presented below for the six months ended June 30, 2003 and 2004 is not directly comparable to the information
presented for the three years ended December 31, 2003 or the Financial Statements because they are stated in
constant pesos as of different dates. In addition, no reconciliation of the consolidated interim financial information
to U.S. GAAP has been prepared.
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. and Mexican GAAP are the accounting methodologies
for the treatment of exploration and drilling costs, pensions, seniority premiums and post-retirement benefit
obligations, capitalized interest, impairment of fixed assets, depreciation, derivatives, profit in inventory and
PEMEX's investment in shares of Repsol YFP, S.A. ("Repsol"), which are described in Note 19 to the Financial
Statements and "Annex A--Item 5--Operating and Financial Review and Prospects--U.S. GAAP Reconciliation."

6

Selected Financial Data of PEMEX

Year Ended December 31,(1)(2)

2001
2002
2003
2003(3)
(in millions of constant pesos as of December 31, 2003)
(in millions of

U.S. dollars)
Income Statement Data

Amounts in accordance with
Mexican GAAP:

Net
sales(4)....................................... Ps.
500,212 Ps. 514,849 Ps. 625,429 $
55,663

Total
revenues(4)..............................
501,912 514,760
628,390 55,926
Total revenues net of the IEPS
Tax ..................................................
394,981 392,322
534,313 47,554

Operating
income............................
267,782 295,720
367,567 32,713

Comprehensive
financing
cost ....... 2,451
6,239 30,742 2,736

Loss for the period.......................... (30,396) (24,574)
(40,644) (3,617)
Balance Sheet Data (end of period)

Amounts in accordance
with Mexican GAAP:

Cash and cash equivalents ..............
15,872 45,621
73,336
6,527

Total
assets......................................
610,163 767,720
845,472 75,247

Long-term
debt ...............................
135,369 198,645
303,613 27,021

Total
long-term
liabilities ............... 397,928 545,496
662,695 58,980

Equity.............................................. 133,137 103,906 45,861 4,082
Amounts in accordance
with U.S. GAAP:

Total
revenues(5)..............................
394,472 392,322
534,314 47,558

Operating
income(5)......................... 160,569 167,522
246,859 21,973

Comprehensive financing (cost)
benefit .............................................
796 (8,450)
(26,812) (2,386)

Loss for the period.......................... (23,344) (32,667)
(66,309) (5,902)

Total
assets......................................
632,290 760,759
815,472 72,577

Equity
(deficit)................................
63,436 17,131
(44,420) (3,953)
Other Financial Data

Amounts in accordance with
Mexican GAAP:

Depreciation
and

amortization .................................... 31,960 33,815 40,544 3,608

Investments in fixed assets at
cost(6) ............................................... 56,789 94,970
67,864
6,040
Ratio of earnings to fixed
charges:

Mexican
GAAP(7) .............................

U.S.
GAAP(7) ....................................

(1) Includes Petróleos Mexicanos, the Subsidiary Entities and the Subsidiary Companies (including the Issuer). Beginning with the year ended
December 31, 2003, the financial position and results of Fideicomiso F/163 and RepCon Lux S.A. are included. For U.S. GAAP purposes, beginning
with the year ended December 31, 2001, the financial position and results of Pemex Finance, Ltd. are included.
(2) The Financial Statements were prepared in accordance with Mexican GAAP, including the recognition of the effect of inflation in accordance with
Bulletin B-10. Mexican GAAP differs from U.S. GAAP. The most significant differences between U.S. GAAP and Mexican GAAP affecting the
Financial Statements are the accounting treatment of: (1) exploration and drilling costs, (2) pensions, seniority premiums and post-retirement benefit
obligations, (3) capitalized interest, (4) impairment of fixed assets, (5) depreciation, (6) derivatives, (7) profit in inventory and (8) PEMEX's
investment in Repsol shares. For a further discussion of these and other differences, see Note 19 to the Financial Statements included herein.
(3) Translations into U.S. dollars of amounts in pesos have been made at the established exchange rate for accounting purposes of Ps. 11.236 =
U.S. $1.00 at December 31, 2003. Such translations 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.
(4) Includes the Special Tax on Production and Services (the "IEPS Tax") as part of the sales price of the products sold.
(5) Figures are net of the IEPS Tax.
(6) 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."
(7) Under U.S. GAAP, earnings for each of the years ended December 31, 2001, 2002 and 2003 were insufficient to cover fixed charges. The amount by
which fixed charges exceeded earnings was Ps. 29,058 million for 2001, Ps. 38,667 million for 2002 and Ps. 74,264 million for 2003. Under
Mexican GAAP, earnings for each of the years ended December 31, 2001, 2002 and 2003 were insufficient to cover fixed charges. The amount by
which fixed charges exceeded earnings was Ps. 34,645 million for 2001, Ps. 30,092 million for 2002 and Ps. 47,910 million for 2003.
Source: PEMEX's financial statements.

7

Selected Financial Data of PEMEX (continued)

Six Months Ended June 30,(1)(2)(3)

2003
2004
2004(4)
(in millions of constant pesos
(in millions of

as of June 30, 2004)
U.S. dollars)
Income Statement Data

Amounts in accordance with
Mexican GAAP:

Net
sales(5) ....................................... Ps.
318,588 Ps.
351,541 $
30,500

Total
revenues(5)(6)........................... 321,405 343,855 29,833
Total revenues net of the IEPS
Tax(6) ...............................................
275,551 310,390 26,930

Operating
income............................ 189,083 219,324 19,029

Comprehensive
financing cost........
5,774 17,857
1,549

Loss for the period .......................... (4,092) (19,865) (1,723)
Balance Sheet Data (end of period)

Amounts in accordance
with Mexican GAAP:

Cash and cash equivalents .............. 52,254 94,162
8,170

Total
assets......................................
812,886 896,663 77,796

Long-term
debt ...............................
310,166 402,120 34,889

Total
long-term
liabilities ...............
605,520 738,634 64,085

Equity..............................................
103,593 18,107
1,571
Other Financial Data

Amounts in accordance with
Mexican GAAP:

Depreciation
and

amortization .................................... 20,206 19,712
1,710

(1) Unaudited
(2) Includes Petróleos Mexicanos, the Subsidiary Entities and the Subsidiary Companies (including the Issuer).
(3) The consolidated interim financial data were prepared in accordance with Mexican GAAP, including the recognition of the effect of inflation in
accordance with Bulletin B-10.
(4) Convenience translations into U.S. dollars of amounts in pesos have been made at the established exchange rate for accounting purposes of
Ps. 11.5258 = U.S. $1.00 at June 30, 2004. Such translations 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.
(5) Includes the Special Tax on Production and Services (the "IEPS Tax") as part of the sales price of the products sold.
(6) Figures for 2004 reflect a Ps. 13,906 million impairment as the cumulative effect of the adoption in 2004 of a new accounting standard. See
"--Recent Developments--Cumulative Effect of Adoption of New Accounting Standard" below.
Source: PEMEX's interim financial statements.

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 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 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 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 December 31, 2003, the total indebtedness of PEMEX, excluding
accrued interest, was approximately U.S. $31.7 billion, which is a 37.8% increase over its total indebtedness,
excluding accrued interest, of U.S. $23 billion at December 31, 2002. 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.
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.

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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.
The Mexican Government's agreements with international creditors may affect PEMEX's external debt obligations.
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.
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. 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 PEMEX's sales revenues was used to pay taxes to the Mexican Government. The Mexican Government
and PEMEX determine the rates of taxes and duties applicable to PEMEX from year to year depending on a variety
of factors. For further information, see "Annex A--Item 4--Information on the Company--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.

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