Fitch: Pemex's revised crude oil reserves figure shows 'significant' drop

By OGJ editors

HOUSTON, Sept. 12 -- Petroleos Mexicanos this week revised downward its 2000 proved crude oil and natural gas reserve base to comply with US Securities and Exchange Commission filing guidelines. The adjusted totals were calculated to be reduced by 6.755 billion boe of oil, condensate, and natural gas liquids and reduced by 2.334 billion boe of dry gas.

According to Fitch Ratings, the revised volumes—which center in northern Mexico's Chicontepec region—"reflect the SEC's definition of proved hydrocarbon reserves to include the certainty that they will be developed in the short-term assuming existing technology and economic conditions." Formerly, Pemex settled on its proved reserves volume using methodology and criteria from the World Petroleum Congresses and the Society of Petroleum Engineers, which are based on estimates that, with "reasonable certainty," the reserves were "commercially recoverable," Fitch said.

Fitch noted, "Although the adjustments are significant, reflecting reductions of 25% in previous WPC-SPE estimates of Mexico's proved crude oil, condensates, and natural gas liquids reserves and 41% of its dry natural gas reserves, the nation's hydrocarbon reserve base remains significant at 23.6 billion boe, yielding a proved crude oil reserve life of 15.6 years as of July 2002."

Fitch added that the revised figures would not affect the Mexican state oil firm's current upstream production profile or its long-term upstream output growth objectives. "It is important to note that Pemex did not consider the Chicontepec proved undeveloped hydrocarbon reserves in the estimation of its discounted future net cash flows as presented in the Form 20-F. Thus, the above referenced adjustments do not affect those calculations," Fitch said.

The revisions, according to Fitch, also "will not have a material effect on Pemex's financial flexibility and credit profile." Pemex's senior unsecured foreign currency obligations carries a BBB- rating from Fitch. This rating includes Pemex's Project Funding Master Trust, and the firm's rating outlook is stable, Fitch said.

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