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Condensate.

Liquidhydrocarbonsobtainedfromnaturalgasrecoveredincon-ventional surface separators at producing oil and gas fields. In-cludesliquidhydrocarbonscondensedinnaturalgaspipelines.

Crudeoil.

Excludes condensates and natural gas liquids production.Thecrudeoilrecoveredcanbelightorheavyasfollows:

Heavy crude oil.CrudeoilwithAPIgravitylessorequalthan27°.MostofthisoilisproducedintheCampecheBasin.

Light crude oil.CrudeoilwithAPIgravity range from27° to38°.This type is produced in the Campeche Basin and othersareasinthecountry.

Lighter crude oil.CrudeoilwithAPIgravityhigherthan38°.ThistypeofcrudeoilisproducedintheMesozoicareasoftheSouthernRegionRegardingcrudeoilmarketing,

Mexicoexportsthreevarietieswiththefollowingtypicalchar-acteristics:

Maya.Heavycrudeoil,22°APIgravityand3.3weight%sulfur.

Istmo.Lightcrudeoil,33.6°APIgravityand1.3weight%sulfur.

Olmeca.Very lightcrudeoil,39.3°APIgravityand0.8weight%sulfur.

Domesticsales.

InvoicedsalesbyPEMEXtodistributorsandnationalcustomersthroughoutthecountry.

Regionalizationforsalesofrefinedproducts.

Startingfrom2002theregionalizationusedbythePresidencyofMexicanRepublicisadopted.

Centre region:Edo.deMéxico,DistritoFederal,More-los,Tlaxcala,HidalgoandPuebla.

Northeast region:Chihuahua,Durango,Coahuila,Tam-aulipasandNuevoLeón.

Northwest region:BajaCalifornia,BajaCaliforniaSur,SonoraandSinaloa.

Centre-west region:Nayarit,Zacatecas,Aguascalientes,Jalisco,Colima,SanLuisPotosí,Guanajuato,QuerétaroandMichoacán.

South-southeast region: Veracruz, Guerrero, Oaxaca,Chiapas, Tabasco, Campeche, Yucatán and QuintanaRoo.

Publicprices.

Thepublicpricesthatarepresentedcorrespondtodifferentref-erenceplacesandareshowninthefolllowingtable:

Drillingrigsinoperation.

Averagenumberofrigsdailyengagedindrillingwellsandcor-respondingactivitiessuchasdisassembling,transport,andmain-tenance.

Drynaturalgas.

Itisnaturalgasfreeofheavierliquidhydrocarbons(naturalgasliq-uids)consistingofethane,propane,butanesandnaturalgasoline.

Field(producing).

Fieldswithproducingwells,whichincludeproducingandwaterinjection wells in operation and productive wells temporarilyshut-off.

Glossary

Product Referenceplace

Jetfuel Mexicocityairport

Heavyfueloil ProducingCenterTula

Acrylonitrile EmbarkingCenterTula

Ammonia ProducingCenterCosoleacaque

Vinylchloride ProducingCenterPajaritos

Styrene ProducingCenterCangrejera

MonoethyleneglycolFG ProducingCenterMorelos

Ethyleneoxide ProducingCenterMorelos

Highdensitypolyethylene ProducingCenterMorelos

Lowdensitypolyethylene ProducingCenterCangrejera

Toluene ProducingCenterCangrejera

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Liquefiedpetroleumgas(LPG).

It isagaseousmixtureofpropaneandbutane indifferentpro-portions.Itisobtainedduringthefractionationofthenaturalgasliquidsorduringthefractionationofthecrudeoilitself.Lighterfractionofcrudeoilusedfordomesticandcarburetionpurposes.

Naturalgas.

Lightparaffinhydrocarbonmixture,meanlymethane,withsmallamountsofethaneandpropane,andinvariableproportionsofnitrogen,carbondioxideandhydrogensulfide.Naturalgascanbeassociatedwithcrudeoilorinindependentforminunassoci-atedgaswells.

Naturalgasoline.

Itisahighlyvolatilemixtureofpentanesandheavierhydrocar-bonsaspartofthenaturalgasliquids.Normallyit isaddedtotheautomotivegasolinetoincreaseitsvaporpressure,aswellasfor starting gasoline engines to low temperatures.The naturalgasoline isalsoused inpetroleumindustryproviding isobutaneandisopentane,whichareusedinthealkylationprocess.

Petrochemicalproducts.

Arethosechemicalswhicharederivedinwholeorinpartfromcrude oil or natural gas. Pemex produces petrochemicals andother products that are classifi ed as basic petrochemicals ac-cording to the governmentresolution published on November13,1996inthegovernment´sofficialdailybulletin.Thefollow-ingbasicpetrochemicalscanbemanufacturedonlybythestatethroughPemexorwholly-ownedPemex´ssubsidiaries.

1.-Ethane2.-Propane3.-Butanes4.-Pentanes5.-Hexane6.-Heptane7.-Carbonblack8.-Naphthas9.-Methane,whenitproceedsfromhydrogencarbidesoriginate

inthereservoirslocatedinnationalterritoryandisusedasrawmaterialinindustrialpetrochemicalprocesses.

Aditionally some products manufactured by Pemex are notstrictlypetrochemicals,neverthelesstheyaretraditionallycon-sideredsosincetheyarerawmaterialsorbyproductsofpetro-chemicalplants.

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ProcessesofPemexRefinación.

Alkylation.Processbymeansofwhichanisoparaffin(ofshortchain)combineswithanolefininthepresenceofacatalysttoformotherisoparaffin(oflargebranched-chain)calledalkylatewhichhasahigh-octane.

Cracking. Cracking process of great oil molecules in smallerones.Whenthisprocessisreachedonlybyapplicationofheat,it is known as thermal disintegration. It is known as catalyticdisintegrationifacatalystisused;andashydrocrackingprocessifitismadeinahydrogenatmosphere.

Distillation. Process that consists of heating up a liquid untiltheirmorevolatilecomponentsget theirvaporphase inordertobeseparated,thereforetheyarerecoveredinliquidphaseby-condensation.Themeanlytargetofthedistillationistoseparateamixtureofseveralcomponentstakingadvantageoftheirdif-ferentboilingpoints,ortoseparatethevolatilematerialsfromthenonvolatileones.

Fractionation.Itisadistillationprocessinwhichsmallfractionsareseparatedfromahydrocarbonmixture.

Hydrodesulfurization.Thisprocesseliminatessulfurbyitstrans-formationintohydrogensulfidefromagaseousstream,whichitcanbeeasilyseparatedandtransformedtoelementalsulfur.

Isomerization. Process by means of which the fundamentalstructureofamoleculeisrearrangedbutnothingisaddedtoortakenawayfromtheoriginalmolecule.Butaneisisomerizedintoisobutaneforbeingusedinisobutylenealkylationandotherolefinsforhigh-octanehydrocarbonproduction.

Reforming. It is a process that improves the octane number(anti-detonationquality)of fractionsof gasolinebymodifyingtheirmolecularstructure.Itisknownascatalyticreformingbe-causeacatalystisused.

Refiningcapacity.

Capacityperdayinoperation,notcapacitypercalendarday.Thecapacityper day in operation refers to themaximumvolumeprocessed by a plant working without interruptions. Capacitypercalendardayincludesthenormalinterruptionsduetomain-tenanceandothercauses.

Region.

GeographycalcoverageassumedbyPemexExploraciónyPro-ducciónforadministrativedivision.TheheadquartersarelocatedalongthecoastoftheGulfofMexico:PozaRica,Ver.(NorthernRegion),Villahermosa,Tab.(SouthernRegion)andCiudaddelCarmen,Cam.(NortheasternMarineRegionandSouthwesternMarineRegion).

Integral assets. Administrativesubdivisionofeachregion.Asaresultoftherestructuringoftheregionsaroundtheirmaininte-gralassets,thesearedistributedasfollows:

Northeastern Marine Region:CantarellandKu-Maloob-Zaap.Southwestern Marine Region: Abkatún-Pol-Chuc andLitoraldeTabasco.Southern Region:Bellota-Jujo,CincoPresidentes,Mac-uspana,MuspacandSamaria-Luna.Northern Region:Burgos,PozaRica-AltamiraandVe-racruz.

Reserves.

Proved reserves (1P). Volumeofhydrocarbonsmeasuredatat-mosphericconditionsthatcanbeeconomicallyproducedwiththemethodsandapplicableexploitationsystemsatthemomentoftheevaluation,asmuchprimaryassecondary.

Probable reserves (2P).Amount of hydrocarbons estimated atspecific date, in perforated or not perforated traps, defi ned bygeologicandgeophysicalmethods,locatedinadjacentproducingdepositsareaswhereitisconsideredthatprobabilitiesexistofob-tainingtechnicallyandeconomicallyproductionofhydrocarbons,atthesamestratigraphiclevelwhereprovenreservesexist.

Possible reserves (3P). Amount of hydrocarbons estimatedatspecificdate,innonperforatedtraps,definedbygeologicandgeophysicalmethods,locatedindistantareasfromtheproduc-ers,butwithinthesameproducinggeologicprovince,withpos-sibilitiesofobtainingtechnicallyandeconomicallyhydrocarbonproduction, at the same stratigraphic level wher e proven re-servesexist.

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SanJoséAgreement.

InAugust3,1980MexicoenteredintoanagreementwithVen-ezuela to provide each one 80,000 barrels of crude oil dailyandrefinedproductstoseveralCentralAmericaandCaribbeancountriesunderfavourablesaleconditions.

Sourgas.

Itisnaturalgascontaininghydrogensulfideandcarbondioxide(theselastoneingreaterconcentrationsupto50ppm).

Specialtaxonproductionandservices(SDPS).

Inthe2005fiscalyear,onlyweremonthlytaxedthegasolinesanddieselforautomotiveusewithataxingformulathatmixinterna-tionalpricesreferences,costofdistributionandotherfactors.

Wells.

Accordingtotheirfunction,wellsareclassifiedinexploratory,which includestratigraphic testwells, anddevelopment,whichincludeinjectionwells.Accordingtothedegreeofcompletion,theyareclassifiedinwellsdrilledandwellscompleted.

Wells drilled.Arethosewhoserotarydrillingoperationhasbeenconcludedandhavecementedcasing,buttheactivitiesofcom-pletionstillhavenotstarted.

Wells completed. Drilled wells whose total depth has beenreached;casinghasbeenrunandcementedandisreadytopro-duceafterbeingperforatedcontiguouslytotheproducingzone;tubing is run; and control and flow valves are installed at thewellhead.

Wetgas.

Itisnaturalgasthatcontainsmorethan3gallonsofliquidhy-drocarbonsperthousandcubicfeetofgas.

Notes:

–Thetotalsmaynotaddduetorounding.–Annualchangesareonaweightbasis.–Theamountsfordomesticsalesandforeigncommercecomefromoperativeareasandtheycannot

coincidewiththefiguresgivenbyfinancialareasduetothetimeelapsedbetweenphysicaldeliveryoftheproductanditsaccountrecord.

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°C Celsiusdegrees

kg/cm2 Kilogrampersquarecentimeter

km Kilometer

m Meter

bd Barrelsdaily

Mbd Thousandbarrelsdaily

MMb Millionbarrels

MMbpce Millionbarrelsofcrudeoilequivalente

Mm3 Thousandcubicmeters

MMMpc Billioncubicfeet

MMpcd Millioncubicfeetdaily

Mt Thousandtonnes

MTBE Methyltertiary-butylether

SDPS Specialtaxonproductionandservices

INPC Nationalpriceindextoconsumer

VAT Valueaddedtax

CPG Gasprocessingcenter

OPEC OrganizationofthePetroleumExportingCountries

PGPB PemexGasyPetroquímicaBásica

PIDIREGAS Projectsofproductiveinfrastructureoflongterm

ppm Partspermillion

MMUS$ MillionofU.S.dollars

MM$ MillionofMexicanpesos

US$/b U.S.dollarsperbarrel

US$/MMBtu U.S.dollarspermillionofBTU

WTI WestTexasIntermediate

$/kg Mexicanpesosperkilogram

$/m3 Mexicanpesospercubicmeter

... Negligiblefigure

- Zerovalue

Nomenclature

Petróleos Mexicanos (PEMEX) es una empresa paraestatal integrada y es responsable de desarrollar los recursos de hidrocarburos del país. Es tam-bién una de las mayores productoras de petróleo crudo y gas natural del mundo, operando a través de un corporativo y cuatro organismos subsidia-rios: PEMEX Exploración y Producción se encarga de explorar y desarrollar las reservas de petróleo crudo y gas natural de México. PEMEX Refinación se ocupa de transformar el petróleo crudo en gasolinas, turbosinas, diesel, combustóleo y gas licuado del petróleo, así como de distribuir y comercializar la mayor parte de dichos productos en el país. PEMEX Gas y Petroquímica

Básica procesa gas natural y líquidos del gas natural; transporta, distribuye y comercializa gas natural y gas licuado en México; y elabora y comercia-liza varios productos petroquímicos básicos. PEMEX Petroquímica produce y comercializa materias primas petroquímicas entre las cuales se incluyen, derivados del metano y del etano como el amoniaco, metanol y polietilenos, además de otras olefinas y aromáticos. PMI Comercio Internacional, empresa subsidiaria de PEMEX, proporcio-na a los cuatro organismos subsidiarios servicios relacionados con el comer-cio exterior.