2/3/2017 PressRelease

PetroleosMexicanos(Pemex)(/gws/en/esp/issr/80089904)

FitchLatamSpotlight:TaxesDrivePemex'sBorrowingNeeds
FitchRatingsChicago03February2017:TheMexicangovernment'scontinuedtaxationofPemexwillforceindefiniteborrowing
andleadtofinancialdifficulties,accordingtothelatestreportinFitchRatings'Spotlightseries.

OnereportintheserieswillbereleasedeachdaythroughFeb.6,2017,followingthescheduleattheendofthisrelease.

"AlthoughPemexisstrivingtoloweritsproductioncostsandincreaseitsoperationandinvestmentefficiencies,theseeffortsmight
notbesufficientwithoutachangeinthegovernmenttake."saidLucasAristizabal,SeniorDirector."Thecontinuedhightaxeswill
significantlyincreasetheneedforalargegovernmentrescueinthemediumterm.Pemex'staxesmakeitimprobablethatthe
companywouldhavepositivefreecashflowinthefuture."

PemexdebtlikelysurpassedUSD100billionbyyearend2016.Withoutmoreadjustmentstothetaxprogram,debtcouldsurpass
USD125billionintwotothreeyears,whichFitchconsidersunsustainable.

Leveragemayimproveinlinewithoilpricerecoveryexpectations,butthereservelifeof8.1yearsmaynotmateriallyrecoverfrom
thedeclinereportedin2015withoutanincreaseininvestment.

Pemex'scapitalinvestmentshavebeenbelowimpliedreplacementcostandnotenoughtostemaproductiondecrease.The
announcedinvestmentcutswilllikelyrestarttheproductiondeclineandprovedreservesandreservelifecouldalsodecline.

Fitch'sSpotlightSeriesonLatinAmericanIssuerswillbereleasedonereportperdayasfollows:

Jan9thAmericanMovilS.A.B.deC.V.
Jan10thGOLLinhasAereasInteligentesS.A.
Jan11thAviancaHoldingsS.A.
Jan12thCEMEX,S.A.B.deC.V.
Jan13thCompanhiaSiderurgicaNacional
Jan17thMarfrigGlobalFoodsS.A.andMinervaS.A.
Jan18thGrupoIDESA,S.A.deC.V.
Jan19thOdebrechtEngenhariaeConstrucaoS.A.
Jan20thBraskemS.A.
Jan23rdLATAMAirlinesGroupS.A.
Jan24thMexichem,S.A.B.deC.V.
Jan25thJBSS.A.
Jan26thValeS.A.
Jan27thEmpresaNacionaldeTelecomunicacionesS.A.
Jan30thDigicelGroupLimited
Jan31stPetroleosdeVenezuelaS.A
Feb1stEcopetrolS.A.
Feb2ndPetroleoBrasileiroS.A.
Feb3rdPetroleosMexicanos
Feb6thOffshoreDrillingHolding,S.A.

TheSpotlightseriesfocusesonfundamentalcreditconcerns,delvingintotherelativeexposuretothemainriskfactors,aswellas
implications,foreachrating.

Thefullreporttitled'WhatInvestorsWanttoKnow:Pemex'isavailableatwww.fitchratings.com.

Contact:

LucasAristizabal
SeniorDirector
+13123683260
https://www.fitchratings.com/site/pr/1018571 1/3
2/3/2017 PressRelease

FitchRatings,Inc.
70W.MadisonStreet
Chicago,IL60602

AlbertoDeLosSantos
AssociateDirector
+528183999100

MediaRelations:ElizabethFogerty,NewYork,Tel:+1(212)9080526,Email:elizabeth.fogerty@fitchratings.com.

Additionalinformationisavailableat'www.fitchratings.com'.

RelatedResearch
WhatInvestorsWanttoKnow:Pemex(GovernmentDemandsLeadingtoInsolvency)(https://www.fitchratings.com/site/re/893901)

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