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Petroleum Executive of the Year, Emilio Lozoya Austin presents his keynote
1.
2. Petroleum Executive of the Year
Keynote Address
Emilio Lozoya Austin - Chief Executive Officer Pemex
CHAIR Thomas Wallin - Editor-in-Chief Energy Intelligence
4. Maximize wealth
from
hydrocarbons
Energy
revolution in
North America
Accelerating
technological
change
Energy policy for
competitiveness Transform the oil
Different geology
in the fields of the
future
and gas industry
Transform Pemex
Energy Reform is Mexico’s answer to
the challenges of the 21st century
5. A stronger
Pemex
Energy reform faces challenges through:
New players
Potential
alliances
between
Pemex and
others
6. 65000
45000
25000
5000
Base Case
Potential
25,000
62,000
CAPEX
Annual average 2014-2025 (mmusd)
Energy reform faces challenges through:
Annual average 2014-2025 (mbd)
5000
4000
3000
2000
1000
CRUDE OIL
Base Case
Potential
2,794
4,083
7. Energy reform poses a major challenge to Pemex:
INITIAL ASSETS ENERGY REFORM EXPECTED RESULT
• Experience
• Knowledge
• Skills
• Accumulated assets
• Competitive advantages
Pemex is treated like a firm
Pemex is able to compete
succesfully
COMPETITION
8. WILL PEMEX BE COMPETITIVE?
PEMEX:
A potentially
competitive firm
New fiscal
regime
New
corporate
Managerial
autonomy
New
regime for
internal
control
Strategic
alliances
New
compensation
policy
Budgetary
autonomy
New
procurement
regime
governance
New Legal Framework
Round
zero
Pension fund
restructuring
9. CHANGE IN
CORPORATE
STRUCTURE
CULTURAL
CHANGE
WILL PEMEX BE COMPETITIVE?
CHANGE IN
STRATEGY
10. Transforming Pemex:
strategy
CHANGE IN STRATEGIC
VISION
LEADING COMPETITOR IN EACH
RELEVANT MARKET
- Choice of markets
- Choice of partners
- Choice of business model in each market
11. Transforming Pemex: new corporate structure
•Optimal output
• Sustainable growth of reserves
Exploration and
Production:
•Operational efficiency for competitiveness
Downstream: •Focused growth in selected markets
•Cogeneration
•Drilling services
•Logistics
New SPVs:
13. Transforming Pemex: entrepreneurial governance
Governance
- Best practices in corporate government
- Business process management
- Business like internal control and risk
management
14. Transforming Pemex:
corporate culture CULTURAL CHANGE
Values, attitudes and behavior
for competitiveness
Strengthen leadership and develop human capital
- Meritocratic compensation policy
- Career plans
- Pemex’s Corporate University
- Continuous acquisition of skills and competencies
15. Perspectives for Mexican oil and gas
Competitive after energy reform
Pemex,
operating as a
corporation
New players,
in association
or competing
with Pemex
Substantial
increase in
investment.
Optimal use of
hydrocarbon
resources
16. Round Zero results
Reserves and prospective resources allocated to Pemex
Volume (mmbcoe) Granted
(% of total)
Area granted (km2) Reserves/
Production
(years)
Reserves (2P) 20,589 83 17,010 15.5
Prospective resources 23,447 21 72,897 5.0*
Conventional 18,222 35 64,489
Non-conventional 5,225 9 8,408
PEMEX will be able to produce, at least, 2.5 mmbd
* Estimated on the basis of potential reserves to be incorporated
over the next 20.5 years
17. New Round Zero related investment
1 – Shift from
allocations to
contracts
CAPEX
mmdlls
11,380
32,780
1,083
3,439
569
1,639
Reserve-3P
mmbcoe
Reserve-2P
mmbcoe
Area
Km2
11,440
8,626
2 – “Farm outs”
(High priority)
First stage
(11 contracts)
Second stage
(11 contracts)
612 1,556 2,664 32,295
Total 20,678 3,764 7,186 76,455
18. Investment opportunities/projects
Mega projects
(above $1,000 mm USD)
Projects
(below $1,000 mm
USD)
Energy Infrastructure
• Deep and ultra deep water
• Shale gas/oil*
1. Gas pipes
2. Reconfiguration of refineries
1. Gas Pipes
2. Transport pipes
3. Logistic projects
4. Marine terminals
5. Platforms
1. Co-generation
2. Mature fields
3. Shallow water
(heavy crudes)
1
3 4
Other projects
2
5
*Shale considered as one project; may be divided into smaller projects
19. Gas and oil basins Mm of barrels of oil equivalent
Unconventionals (shale oil and gas)
Basin
Cummu
lative Prod.
Reserves and prospective resources in Mexico
Reserves Prospective resources
1P
(90%)
2P
(50%)
3P
(10%)
Conv. Unconv.
Southeast 46.5 11.8 17.0 23.4 15.8
Tampico
Misantla
6.5 1.1 6.6 15.7 2.3 34.8
Burgos 2.4 0.3 0.5 0.7 3.2 10.8
Veracruz 0.8 0.2 0.2 0.3 1.4 0.6
Sabinas 0.1 0.0 0.0 0.1 0.4 14.0
Deep
0.0 0.1 0.4 2.0 27.8
water
Yucatán
Platform
1.7
Total 56.2 13.4 24.8 42.2 52.6 60.2
Development and Exploration projects
production projects
28.4
20. E & P opportunities more than double Pemex’s present CAPEX
5000
4000
3000
2000
1000
2,794 4,083
Baseline
Full Potential
OIL
Annual average 2014-2025 (mbd)
9000
7000
5000
Baseline
Full Potential
6,081
9,079
GAS
Annual average 2014-2025 (mmcfd)
65000
45000
25000
5000
INVESTMENT
Annual average 2014-2025
Baseline
Full Potential
$24,329
$62,267
(mmusd)
22. Gaspipes: expansion projects
National gaspipes Length (km)
Investment
(MDD)
Los Ramones 842 2,535
1 Ramones Phase I 114 688
2 Ramones Phase II 728 1,847
North-East 1,944 2,411
3
El Encino (Chih.) -
Topolobampo (Sin.)
574 1,008
4 Sásabe - Guaymas 544 569
5 Guaymas - El Oro 364 429
6 El Oro - Mazatlán 462 405
Other projects 1,032 1,304
7 Tamazunchale 229 468
8 Zacatecas 172 70
9 Morelos 172 246
10 Mayakán 76 125
11 Chihuahua** 383 395
Total 3,818 6,250
13
4
5 3
6
International gaspipes Length (km)
11
2
8
Investment
(MDD)
SNG length (2013): 11,342 km
12 Agua Dulce -Frontera 200 828
13 Tucson - Sásabe 97 208
Total 297 1,036
SNG new length : 15,160 km*
Total investment: 7,454 MDD
2013 gaspipes
Comprehensive strategy
gaspipes
12
1
7
9
10
** * Includes projects from the Comprehensive Strategy, and the new 222 km from Jáltipan-Salina Cruz gaspipe. Chihuahua gaspipe started operations on July 2013
23. Oil & gas as an engine for growth
Investment in oil & gas equals 2% of GDP. Energy Reform should push that to 4% in a few years
INCREASED
GROWTH
Cheaper, cleaner and more abundant
energy: increased competitivity
National Content= 25%
Increased opportunities for the private sector
(will rise to 35%)