Exhibit 1.1
  LAW OF
    PETRÓLEOS MEXICANOS
  Chapter I
    Nature, Objective and Property
  Article 1. 
      Article 2. 
  Article 3.  ,
      Article 4. 
      Article 5. 
   1




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Chapter II
    Organization and Function
  First
    Section
    General Provisions
  Article 6. 
            Article 7. 
  I.
  II.
   2




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Second
    Section
    Board of Directors of Petróleos Mexicanos and its
    Subsidiary Entities
  Article 8. 
  I.
  II.
    Five representatives from the Petroleum Workers Union of
    the Mexican Republic, who must be active members therein and
    permanent employees of Petróleos Mexicanos; andIII.
    Four professional directors appointed by the Federal Executive,
    who will represent the State and be public officials.            Article 9. 
        Article 10. 
  Article 11. 
  I.
    Be Mexican citizens, with full enjoyment of their civil and
    political rights;II.
    Have a professional degree in the areas of law, economy,
    engineering, public administration, accountancy or disciplines
    related to the energy industry;III.
    Have worked for at least ten years in the professional,
    educational or research sectors, or in activities that provide
    the experience necessary to undertake the duties of the Board of
    Directors; andIV.
    Not have occupied executive positions in any political party,
    nor held elective office, in the three years prior to their date
    of appointment.   3




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Article 12. 
  I.
    Mental or physical incapacity that hinders the proper exercise
    of their duties for more than six months;II.
    Breaching, without justified cause, the resolutions of the Board
    of Directors of Petróleos Mexicanos;III.
    Acting deliberately in excess of the authority, or deliberately
    failing to carry out the responsibilities, established in this
    Law;IV.
    Failing to comply with any requirement set forth in this Law for
    being a member of the Board of Directors, or suffering any
    impediment in respect of compliance with them;V.
    Utilizing, for personal benefit or for the benefit of any third
    party, the information available to them in the exercise of
    their duties or disclosing such information in violation of
    applicable provisions;VI.
    Incurring any of the bases for liability referred to in this Law;VII.
    Deliberately submitting false information for consideration of
    the Board of Directors;VIII.
    Not excusing themselves from discussion of and voting on matters
    in respect of which they have a conflict of interest;IX.
    In the case of professional directors, being absent from their
    duties without motive or cause that is justified in the opinion
    of the Board of Directors;X.
    Having been convicted of an intentional crime resulting in
    imprisonment; andXI.
    Acquiring another nationality.    Article 13. 
      Article 14. 
    Article 15. 
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Article 16. 
    Article 17. 
  Article 18. 
    I.
    The Director General of Petróleos Mexicanos, who will chair
    them;II.
    Representatives from the State, appointed by the Federal
    Executive; andIII.
    At least two professional directors, appointed by the Federal
    Executive, representing the State. The number of these directors
    will always be less than that of the directors appointed in
    accordance with the preceding clause II.       5




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Third
    Section
    Duties of the Board of Directors of Petróleos
    Mexicanos
  Article 19. 
  I.
    Providing the central leadership and strategic management of
    Petróleos Mexicanos and its subsidiary entities, for which
    it will:  a)
    Establish, in accordance with the Energy Sector Program, the
    general policies relating to production, marketing,
    technological development, general administration, finances and
    other considerations relating to the matters referred to in this
    article;b)
    Issue the guidelines that regulate the operating relationships
    between and among Petróleos Mexicanos and its subsidiary
    entities in financial, credit, tax, accounting, security,
    budgetary and such other matters as are applicable;c)
    Ensure that the interests of the subsidiary entities and their
    affiliates are in line with those of Petróleos Mexicanos;d)
    Establish the rules for the annual accounting and financial
    consolidation of the subsidiary entities of Petróleos
    Mexicanos;e)
    Guide Petróleos Mexicanos and its subsidiary entities
    according to the best industry, corporate and general practices,
    at all times, in accordance with the mandate set forth by this
    Law; and  f)
    Monitor the operating risk management system of the petroleum
    industry established by the Director General.  II.
    Monitoring and evaluating the performance of Petróleos
    Mexicanos and of its subsidiary entities;III.
    Approving on a yearly basis, according to the national energy
    policy, the business plan of Petróleos Mexicanos and the
    subsidiary entities, which should be prepared based on a
    five-year projection;IV.
    Approving, subject to prior opinion from the relevant committee:  a)
    The transactions that Petróleos Mexicanos or its subsidiary
    entities plan to enter into, directly or indirectly, with those
    entities over whom it exercises control or significant
    influence; provided that no Board of Directors approval
    will be required for the transactions mentioned below, provided
    that they comply with the relevant policies and guidelines
    approved by the Board:  1.
    The transactions that in terms of their size are immaterial for
    Petróleos Mexicanos or its subsidiary entities, and2.
    The transactions that are carried out between or among
    Petróleos Mexicanos and its subsidiary entities, provided
    that these are entered into in the ordinary course of business,
    at market prices and in accordance with guidelines established
    by authorities or are supported by valuations performed by
    outside experts;  b)
    The compensation of the Director General and of the officials
    occupying the three hierarchical levels below such position;c)
    That the Director General be subject to the agreed maximum
    budgetary allocations for negotiation of the collective
    bargaining agreement;d)
    The salary guidelines, as well as the human resources policies
    of Petróleos Mexicanos and its subsidiary entities;e)
    The proposal for the removal of the Director General, for
    submission thereafter to the consideration of the Federal
    Executive; 6




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f)
    The policies for the granting of borrowings, guarantees, loans
    or any type of credit to its subsidiary entities and affiliates;
    as well as for the release from such guarantees;  g)
    The guidelines establishing the form in which the information
    requests referred to in article 20 of this Law will be
    effected, as well as their scope;h)
    The guidelines regarding matters of control, internal auditing
    and security of Petróleos Mexicanos and its subsidiary
    entities;  i)
    The accounting policies of Petróleos Mexicanos and its
    subsidiary entities, in accordance with applicable regulations;j)
    The regulations applicable to Petróleos Mexicanos and its
    subsidiary entities for the contracting of works and related
    services, acquisitions, leasing and rendering of services,
    pursuant to the terms set out in article 51 of this Law;  k)
    The investment projects and programs, as well as contracts that
    exceed the amounts established in the applicable regulations;  V.
    Approving the draft budgets of Petróleos Mexicanos and its
    subsidiary entities, as well as the bases, regulations and
    procedures for their formulation;VI.
    Approving, within the terms of this Law, adjustments to the
    budgets of Petróleos Mexicanos and of its subsidiary
    entities, execution timetables and their modification, as well
    as the rules setting forth the types of modifications that will
    not require approval of the Board of Directors;VII.
    Approving and authorizing for publication on a yearly basis,
    with the prior opinions of the Audit and Performance Evaluation
    Committee and of the external auditors, the entitys
    financial statements;VIII.
    Approving the terms and conditions for the contracting of
    obligations that constitute public indebtedness of
    Petróleos Mexicanos, in accordance with the financing
    program approved by the Ministry of Finance and Public Credit
    and the guidelines approved by such Ministry;IX.
    Addressing, through the applicable committees, the main risks to
    which Petróleos Mexicanos and its subsidiary entities are
    exposed, based on the information presented by such committees,
    the Director General, the Commissioner or the external auditor;
    and addressing also the accounting, control, security and
    internal audit systems, as well as the registration, filing and
    public disclosure of information;X.
    Approving, at the request of the Director General, proposals for
    establishing subsidiary entities of Petróleos Mexicanos for
    the undertaking of strategic activities, as well as other
    actions that derive from article 16 of the Federal Law of
    Decentralized Public Entities and its applicable Regulations, in
    order to submit them thereafter for consideration by the Head of
    the Federal Executive;XI.
    Approving, at the request of the Director General, the
    establishment of affiliated companies under the control of
    Petróleos Mexicanos or of its subsidiary entities that will
    be decentralized public entities, as well as other actions set
    forth in article 32 of the Federal Law of Decentralized
    Public Entities, but without being subject for these purposes to
    the procedure for the creation and dissolution of such entities,
    as set forth in such law and its regulations;XII.
    Authorizing, at the request of the Director General, the
    participation of Petróleos Mexicanos and its subsidiary
    entities in the establishment and, as applicable, liquidation,
    merger or spin-off of corporations that do not meet the
    requirements for being considered decentralized public entities;XIII.
    Approving the annual operating and financing plan referred to in
    article 30, section III of this Law, which will be
    disclosed by its Chairman, as well as performing related
    evaluations of the plan, based on objective and quantifiable
    indicators; 7




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XIV.
    Approving the criteria and guidelines for the granting of
    extraordinary payments by Petróleos Mexicanos and its
    subsidiary entities, subject to applicable provisions, and those
    for donations and contributions, in cash or in kind;XV.
    Approving the annual report of Petróleos Mexicanos and its
    subsidiary entities;XVI.
    Approving the dismantling or sale of the industrial
    installations of Petróleos Mexicanos and its subsidiary
    entities when those installations are no longer suitable to
    fulfill their purposes, in accordance with the General Law of
    National Property;XVII.
    Issuing the rules or general guidelines pursuant to which the
    Director General can, when necessary, dispose of the fixed
    assets of Petróleos Mexicanos that are no longer required
    for the operations pertaining to its objective;XVIII.
    Appointing and removing, or granting leave of absence to, at the
    proposal of the Director General, public officials holding
    offices in the two levels of administrative hierarchy below such
    position;XIX.
    Establishing the rules, guidelines and procedures for the
    acquisition, lease and sale of real estate required by
    Petróleos Mexicanos and its subsidiary entities for
    fulfillment of their purposes;XX.
    Approving rules and guidelines for the canceling of debts owed
    by third parties to Petróleos Mexicanos, when the economic
    unfeasibility or practical impossibility of collection is
    apparent, and informing the Ministry of Finance and Public
    Credit of the same;XXI.
    Approving the Organic Statute, which will include the structure,
    bases of organization and functions that correspond to the
    different business units that comprise Petróleos Mexicanos,
    as well as the internal rules of the Board of Directors; andXXII.
    Performing any other responsibilities established by the Organic
    Statute, as well as by other applicable laws and regulations.    Article 20. 
  Article 21. 
  Fourth
    Section
    Committees
  Article 22. 
    I.
    Audit and Performance Evaluation;II.
    Strategy and Investment;III.
    Compensation;IV.
    Acquisitions, Leasing, Works and Services;V.
    Environmental and Sustainability; 8




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VI.
    Transparency and Accountability; andVII.
    Development and Technological Research.      Article 23. 
    I.
    Supervising the management of Petróleos Mexicanos,
    reviewing relevant documentation and evaluating the financial
    and operational performance  generally and by
    segments  of the entity. Moreover, it shall present
    to the Board of Directors reports relating to each of these
    matters;II.
    Evaluating the achievement of the goals, objectives, plans and
    programs of the entity, including compliance with the time
    lines, terms and conditions of the commitments that it assumes,
    as well as performance indicators;III.
    Verifying and certifying the reasonableness and sufficiency of
    accounting and financial information;IV.
    Appointing, supervising and evaluating the external auditor,
    fixing its compensation, and making determinations regarding the
    contracting of other auditors;V.
    Issuing an opinion regarding the contracting of the external
    auditor for activities not related to those of external
    auditing, in order to avoid a conflict of interest that may
    affect the auditors independence;VI.
    Supervising the processes of formulating, compiling and
    disclosing accounting and financial information, as well as the
    performance of audits of the financial statements in accordance
    with applicable accounting principles and audit rules;VII.
    Supervising the preparation of the external auditors
    opinion on the financial statements of Petróleos Mexicanos;VIII.
    Issuing an opinion on the sufficiency and reasonableness of the
    external auditors opinion on the financial statements of
    Petróleos Mexicanos;IX.
    Establishing a system for managing risks that may affect the
    financial condition and operations of the entity, as well as
    reporting periodically to the Board of Directors on related
    compliance;X.
    Proposing to the Board of Directors guidelines in respect of
    internal controls and performance evaluation;XI.
    Notifying the Board of Directors on an ongoing basis of the
    strength of the internal control system and proposing related
    improvements;XII.
    Scheduling and requesting, at any time, the investigations and
    audits that it deems necessary, except for those relating to the
    performance of the Board of Directors. To carry out the above,
    it may rely on external auditors or the Internal Control Body; 9




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XIII.
    Presenting to the Board of Directors, with the frequency
    requested by such Board, reports on the results of its activity;XIV.
    Evaluating the achievement of goals regarding the replacement of
    hydrocarbon reserves;XV.
    Issuing an opinion on the measurement and evaluation of
    hydrocarbon reserves; andXVI.
    All others that are established in other applicable laws and
    regulations.  Article 24. 
  Article 25. 
  Article 26. 
    I.
    Reviewing, evaluating, administering and formulating pertinent
    recommendations for annual acquisitions, leasing, services and
    public works programs, which shall be adjusted to the objectives
    established in the Business Plan;II.
    Issuing an opinion on the justifiability of not holding public
    bidding processes, pursuant to applicable provisions, and
    determining, based on such justification as is presented by the
    relevant unit, the contracting procedures to be used 
    which may consist of a restricted invitation or direct
    award  giving notice of the same to the Audit and
    Performance Evaluation Committee;III.
    Issuing opinions requested by the Board of Directors on model
    contracts and agreements regarding acquisitions, leasing,
    services and works;IV.
    Authorizing the creation of
    sub-committees,
    their implementation and operation;V.
    Issuing opinions required by the Board of Directors regarding
    the entering into of agreements and contracts, their
    performance, as well as their suspension, cancellation or early
    termination; andVI.
    All others established in this Law, its Regulations, the Organic
    Statute of Petróleos Mexicanos and other applicable
    provisions.   10




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Article 27. 
      I.
    Issuing policies, regulations, guidelines and rules of operation;II.
    Applying the rules issued by the Board of Directors of
    Petróleos Mexicanos, as well as proposing modifications
    thereto; andIII.
    Reviewing the compatibility of programs and budgets for
    acquisitions, leasing, services and public works, with the
    central planning and strategic management of the activities
    comprising the state petroleum industry.  Article 28. 
      I.
    Preparing plans for the prevention of hydrocarbon spills, both
    onshore and offshore;II.
    Ensuring strict compliance with preventive plans;III.
    Preparing both onshore and offshore environmental contingency
    plans, as well as coordinating with the different participants
    at federal, state and municipal levels to contain and limit any
    damage caused by activity or accidents related to the petroleum
    industry;IV.
    Preparing plans for the remediation of soil and bodies of water
    affected by the works and activities related to the petroleum
    industry;V.
    Undertaking periodic evaluation of the plans that it has
    prepared;VI.
    Preparing plans for the progressive substitution of alternative
    energy sources for hydrocarbons, presenting these to the Board
    of Directors; andVII.
    Delivering an annual report to the Board of Directors on the
    actions it has taken.  Article 29. 
  I.
    Proposing to the Board of Directors, in observance of the
    applicable best practices, criteria to determine which
    information will be deemed relevant to Petróleos Mexicanos
    and its subsidiary entities, as well as the rules
    and  where applicable  recommendations for
    its disclosure;II.
    Verifying compliance with the criteria, rules and
    recommendations referred to in the preceding section;III.
    Issuing, within the scope of its authority, an opinion on the
    reports referred to in this Law; 11




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IV.
    Establishing the criteria for organizing, classifying and
    handling the reports referred to in this Law, as well as
    verifying their preparation and disclosure;V.
    Proposing to the Board of Directors the system of accountability
    of the management of Petróleos Mexicanos;VI.
    Preparing an annual opinion on transparency and accountability
    of the entity;VII.
    Proposing mechanisms for responding to requests for access to
    information and related disclosure;VIII.
    Requesting such information from the office of the Director
    General of Petróleos Mexicanos as is necessary for the
    adequate performance of its duties; andIX.
    All others that are established in applicable laws and
    regulations.  Article 30. 
      Fifth
    Section
    Duties of the Director General
  Article 31. 
  I.
    Managing and legally representing the entity;II.
    Conducting the strategic planning and preparing the initial
    drafts of the consolidated revenue and expenditure budget of
    Petróleos Mexicanos and its subsidiary entities, with their
    participation;III.
    Formulating and submitting for the authorization of the Board of
    Directors the business plan as well as the annual operating and
    financing plan, pursuant to which performance goals based on the
    best practices of the petroleum industry are set;IV.
    Defining the bases for the supervision, coordination, control
    and performance evaluation systems of the subsidiary entities,
    in order to optimize their operations and manage the services
    common to them;V.
    Reaching agreement with the Petroleum Workers Union of the
    Mexican Republic on the Collective Bargaining Agreement, and
    issuing labor regulations for non-union workers that will
    regulate the labor relations of Petróleos Mexicanos and its
    subsidiary entities, pursuant to the terms of article 123,
    Part A, of the Political Constitution of the United Mexican
    States and those of the Federal Labor Law;VI.
    Providing to the Ministry of Finance and Public Credit, through
    the Ministry of Energy, the budgetary and financial information
    corresponding to Petróleos Mexicanos and its subsidiary
    entities, for its inclusion in the Annual Account of the Federal
    Public Expenditures;VII.
    Establishing the mechanisms and internal control systems that
    will permit the evaluation, monitoring and verification of
    whether the actions and operations of Petróleos Mexicanos
    and its 12




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subsidiary entities comply with applicable regulations, as well
    as following up on the results and taking any related necessary
    measures;  VIII.
    Proposing measures for technological development that ensure the
    quality of the entitys products;IX.
    Exercising, directly or through those who are determined to have
    authority, necessary actions against those who have allegedly
    caused damage or loss to Petróleos Mexicanos or to its
    subsidiary entities;X.
    Preparing and presenting to the Board of Directors the report
    referred to in article 70 of this Law;XI.
    Notifying the Ministry of Finance and Public Credit of any
    intention to incur a contractual obligation that constitutes
    public indebtedness, with the advance notice provided for in the
    guidelines issued by such Ministry;XII.
    Disclosing material information and events that should be made
    public, pursuant to the terms of the applicable provisions;XIII.
    Implementing and managing the safety systems of Petróleos
    Mexicanos and its subsidiary entities, in coordination with
    relevant ministries at the three government levels;XIV.
    Disclosing to the general public, within the terms established
    by the Board of Directors, the financial statements of the
    subsidiary entities and affiliates controlled by Petróleos
    Mexicanos; andXV.
    All other duties that are set forth in the Organic Statute of
    Petróleos Mexicanos and other applicable laws and
    regulations.    Article 32. 
  Sixth
    Section
    Oversight of Petróleos Mexicanos
  Article 33. 
  I.
    The Audit and Performance Evaluation Committee referred to in
    article 23 of this Law;II.
    A Commissioner;III.
    The Internal Control Body;IV.
    The Superior Audit Office of the Federation; andV.
    The External Auditor.  Article 34. 
  I.
    Rendering to the Federal Executive, through the sectors
    coordinating ministry, an annual report regarding the veracity,
    sufficiency and reasonableness of the information presented and
    processed by the Board of Directors;II.
    Requesting the information necessary to render the report
    referred to in the preceding section;III.
    Attending meetings of the Board of Directors, participating
    verbally, but without a vote; 13




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IV.
    Representing the interests of the holders of instruments
    referred to in article 47 of this Law and, consequently,
    bearing the responsibility of gathering and disclosing in a
    timely manner information that is accurate and complete
    concerning the general state of the entity; andV.
    All others that are set forth in the Organic Statute of
    Petróleos Mexicanos.      Article 35. 
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Chapter III
    Liabilities of the Members of the Board of Directors
  Article 36. 
    Article 37. 
  I.
    Failing to attend meetings of the Board of Directors or of the
    committees of which they are part, without cause justified in
    the opinion of the Board;II.
    Failing to disclose to the Board of Directors, or if applicable,
    the committees of which they are part, relevant information of
    which they are aware and that is necessary for adequate decision
    making in such bodies, unless there is a legal or contractual
    obligation to maintain confidentiality or refrain from
    disclosing such information; orIII.
    Failing to comply with the duties imposed by this Law or any
    other applicable provisions.  Article 38. 
  I.
    Obtaining, without legitimate cause and through their duties as
    directors, economic benefits for themselves or in favor of third
    parties;II.
    Despite the existence of a conflict of interest, voting in the
    meetings of the Board of Directors or making decisions relating
    to the property of Petróleos Mexicanos, its subsidiary
    entities or the entities it controls;III.
    Taking advantage for themselves or in favor of third parties
    through use or enjoyment of the assets of Petróleos
    Mexicanos and its subsidiary entities, in contravention of the
    policies approved by the Board of Directors;IV.
    Generating, disclosing, publishing or providing information
    concerning Petróleos Mexicanos, its subsidiary entities or
    entities that it controls, with knowledge that such information
    is false or misleading, or ordering that such conduct be carried
    out;V.
    Ordering that an entry not be made in the books and records of
    Petróleos Mexicanos and its subsidiary entities, or
    altering or ordering the alteration of such an entry in order to
    hide the true nature of transactions conducted, thereby
    affecting to any extent the financial statements, or ordering or
    accepting the registration of false data in the corresponding
    accounting entries;VI.
    Concealing or omitting to disclose relevant information that,
    under the terms of this law and other applicable provisions,
    must be disclosed to the Federal Executive or to the Congress of
    the Union, unless such omission is permitted under applicable
    provisions;VII.
    Destroying or modifying, directly or through third parties, the
    accounting systems or registries, or the documentation forming
    the basis of the accounting registries of Petróleos
    Mexicanos, its subsidiary entities or the entities that it
    controls, prior to the expiration of the legal term for required
    retention and with the purpose of hiding its registration or
    existence;VIII.
    Destroying, totally or partially, information, documents or
    files, including those in electronic form, whether for the
    purposes of hindering or obstructing oversight, or of
    manipulating or hiding data or relevant information of
    Petróleos Mexicanos, its subsidiary entities or the
    entities that it controls, from persons who have a legal
    interest in knowing it;IX.
    Providing authorities with false or altered documents or
    information; 15




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X.
    Altering accounts pertaining to assets or liabilities or the
    conditions of contracts, registering or giving the order to
    register non-existent operations or expenses, overstating the
    true data or intentionally carrying out any illegal or
    prohibited act or transaction that generates loss or damage in
    relation to the property of Petróleos Mexicanos, its
    subsidiary entities or the entities that it controls; orXI.
    Improperly using information relating to Petróleos
    Mexicanos, its subsidiary entities or the entities that it
    controls or over which it exercises significant influence.  Article 39. 
    Article 40. 
      Article 41. 
      Article 42. 
  I.
    They comply with the requirements for the approval of matters
    within the authority of the Board of Directors or, as
    applicable, of the committees of which they are part;II.
    They adopt decisions or vote in the meetings of the Board of
    Directors or, as applicable, the committees of which they are
    part, based on information provided by executives of
    Petróleos Mexicanos, the external auditor or independent
    experts; orIII.
    To the best of their knowledge and understanding, and based on
    the information available at the time the decision is made, they
    have either selected the best alternative, or the adverse
    effects on the entity could not have been foreseen.  Article 43. 
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Chapter IV
    Special operations regime of Petróleos Mexicanos
  First
    Section
    Part A. Indebtedness
  Article 44. 
  I.
    It will submit its financing proposals to the Ministry of
    Finance and Public Credit for their inclusion in the Financial
    Program prepared in accordance with the General Law of Public
    Debt, and subject to the annual global financing threshold
    approved by the Congress of the Union;II.
    It may engage in, without requiring authorization from the
    Ministry of Finance and Public Credit, official negotiations,
    informal or exploratory efforts concerning the possibility of
    accessing the external money and capital markets, contracting
    for external financings that are denominated or payable in
    foreign currency, as well as contracting for obligations
    constituting indebtedness;III.
    It will be responsible for ensuring that:  a)
    Contracted obligations do not exceed its payment capacity,b)
    Proceeds obtained are used properly, in accordance with
    applicable provisions,c)
    Payments are effected in a timely manner, andd)
    The development of its own financial program is supervised;  IV.
    It will register its financing transactions with the Ministry of
    Finance and Public Credit.        Article 45. 
    Article 46. 
   17




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Part B.
    Citizen bonds
  Article 47. 
        a)
    Investment funds specializing in retirement funds;b)
    Pension funds;c)
    Investment funds for individuals; andd)
    Other financial intermediaries acting as market makers.      I.
    The manner in which Mexican individuals may acquire bonds at the
    time of issuance and initial placement, with the appropriate
    participation of Mexican financial institutions, as well as the
    means of verifying compliance with the requirements referred to
    in this article;II.
    The manner in which investment funds specializing in retirement
    funds, pension funds and investment funds for individuals may
    acquire bonds at the time of issuance and initial placement;III.
    The manner in which only those financial intermediaries that are
    acting as market makers may acquire bonds, as well as the
    maximum amount thereof that they may hold, which will be
    determined by considering only that which is necessary to
    accomplish such purpose. Investment banks may not participate as
    market makers;IV.
    Initial placement mechanisms, with the corresponding
    participation of Mexican financial institutions, that ensure an
    adequate distribution of the citizen bonds among the public and
    facilitate the acquisition of bonds by Mexican individuals;V.
    Measures that facilitate access to the largest number of
    individuals, imposing limits on the total value of citizen bonds
    that may be acquired by the same individual or entity, directly
    or indirectly. Each individual may not acquire more than 0.1% of
    the total value of the bond issuance;VI.
    As a priority, strict measures aiming to prevent cornering of
    the market in the holding of bonds;VII.
    The characteristics, terms and conditions of the issuance of
    citizen bonds; 18




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VIII.
    The mechanics of their operation in the market through
    institutions that comprise the financial system, so that after
    their issuance and initial placement, such market is dynamic,
    efficient and competitive; andIX.
    The manner in which Mexican financial institutions, prior to the
    transfer of the ownership of citizen bonds, will verify that
    only individuals of Mexican nationality and the entities
    mentioned in paragraphs a) to d) of this article
    become holders of citizen bonds, as well as that these holdings
    do not exceed the maximum limit set forth in section V of
    this article.          Article 48. 
    Second
    Section
    Budget
  Article 49. 
  I.
    Petróleos Mexicanos will remit annually to the Ministry of
    Finance and Public Credit, through the Ministry of Energy,
    projections of its financial balance goals for the next five
    years;II.
    The Board of Directors of Petróleos Mexicanos will approve
    adjustments to its own budget and those of the subsidiary
    entities, and in each case no approval from the Ministry of
    Finance and Public Credit will be required, subject to
    compliance with the annual financial balance goal and so long as
    the programmable budget for personal services is not increased;III.
    With the approval of the Board of Directors of Petróleos
    Mexicanos, the entity may increase its own expenditures or those
    of its subsidiary entities based on a surplus in their income,
    in each case without the authorization referred to in
    article 19, section III, of the Federal Law of Budget
    and Fiscal Accountability, subject to compliance with the annual
    financial balance goal and so long as the programmable budget
    for personal services is not increased;IV.
    The Board of Directors of Petróleos Mexicanos shall approve
    its budgetary calendars and those of the subsidiary entities, as
    well as modifications thereto, in both cases without the
    approval of 19




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the Ministry of Finance and Public Credit, subject to compliance
    with the annual financial balance goal of Petróleos
    Mexicanos;  V.
    The Board of Directors of Petróleos Mexicanos will
    authorize the budget, as well as its corresponding application
    to the entitys investment projects and those of its
    subsidiary entities, without the intervention of the Ministry of
    Finance and Public Credit; andVI.
    For purposes of registering the investment portfolio referred to
    in article 34 of the Federal Law of Budget and Fiscal
    Accountability, sections I and IV thereof shall not
    apply. The investment planning of Petróleos Mexicanos and
    its subsidiary entities, will therefore be subject to what is
    set forth in this Law.      Article 50. 
  Third
    Section
    Acquisitions, Leasing, Services and Public Works
  Article 51. 
  Article 52. 
  Article 53. 
  I.
    The contracting to be carried out shall be published on the
    website of the corresponding entity, pursuant to the Federal Law
    of Transparency and Access to Governmental Public Information;II.
    The Acquisitions, Leasing, Works and Services Committee or, as
    applicable, the respective committees of the subsidiary entities
    shall opine, based on the proposal presented to such effect by
    the requesting unit, on the justifiability of using restricted
    invitation or direct award procedures; 20




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III.
    The content of the proposal to be prepared by the unit
    requesting restricted invitation or direct award procedures;IV.
    The application of the same requirements and conditions to all
    participants, in the case of public bidding or restricted
    invitation;V.
    The cases in which Petróleos Mexicanos and its subsidiary
    entities shall abstain from, among other actions, receiving
    proposals, acquiring, leasing or entering into service contracts
    or works contracts with persons that:  a)
    Have a conflict of interest with such entities;b)
    Are barred from exercising commercial activities or from
    practicing their profession;c)
    Are barred by the Ministry of Public Function, pursuant to the
    terms of the applicable provisions;d)
    Have pending defaults to be settled with such entities;e)
    Are not authorized to intellectual property or other exclusive
    rights related to the matters referred to in this article;  f)
    Have unduly obtained privileged information; or  g)
    Use of third parties to avoid what is set forth in this section.  VI.
    The mechanisms for determining prices and adjustments thereto,
    including giving consideration to, among other factors, the
    establishment of price catalogues for the petroleum industry;VII.
    The mechanisms for adjustments to execution programs, milestone
    dates and execution time tables;VIII.
    The measures to ensure that economic resources are managed with
    efficiency, effectiveness, transparency and honesty;IX.
    In contracting procedures, the principles of transparency,
    maximum publicity, equality, competitiveness, simplicity and
    timeliness shall be paramount;X.
    In contracting procedures, Petróleos Mexicanos and its
    subsidiary entities shall require minimum thresholds of national
    content, and must also establish preferences in related
    qualification and selection that favor the employment of human
    resources, goods or services of national origin, in accordance
    with the guidelines issued by the Board of Directors.        XI.
    The manner for carrying out the planning, programming and
    budgeting for acquisitions, leasing and contracting of services
    and works, as well as the evaluation of their results based on
    objective indicators;XII.
    The terms in which public biddings, direct awards or restricted
    invitations will be carried out;XIII.
    The general requirements for invitations and bidding guidelines,
    as well as time tables for the bidding stages and bases for
    declaring them failed; 21




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XIV.
    The regulations relating to entering into multi-year contracts
    for public works and services related thereto whose execution
    covers more than one year, considering:  a)
    The incorporation of technological advances,        XV.
    The causes of and procedures for suspension, early termination
    and administrative cancellation of contracts;XVI.
    The regulations pertinent to permitting procedures to be carried
    out through electronic means; andXVII.
    The other aspects set forth in the Regulations to this Law.  Article 54. 
    Article 55. 
  I.
    Biddings may be national or international. In the latter case,
    it shall be indicated whether they will be carried out in an
    open manner or pursuant to the application of an international
    treaty. In the case of open international biddings, the
    participation of nationals of countries that do not grant
    reciprocity may be limited;II.
    The procedure will consist of the following stages:  a)
    Issuance of the invitation, which shall be published in the
    Official Gazette of the Federation;b)
    Issuance of the bidding guidelines;c)
    Meetings to address any needed clarifications;d)
    Presentation and opening of proposals;e)
    Analysis and evaluation of the proposals, to which mechanisms
    may be applied for pre-qualification and subsequent discount
    offers; and  f)
    Awarding and decision, which will be disclosed in a public
    meeting.  III.
    In the bidding guidelines there shall be included, among other
    provisions:  a)
    Elements establishing the necessary experience, technical and
    financial capacities, according to the characteristics,
    complexity and magnitude of the goods, services or works to be
    acquired or contracted for;b)
    The general description of the goods, services and works, as
    well as the location in which the last two of these are to be
    carried out;c)
    The time limit for performance of the contracts; 22




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d)
    The rules in accordance with which contractors or suppliers may
    undertake subcontracting;e)
    Information on compensation and payment conditions;  f)
    The mechanisms for adjusting compensation;  g)
    The requirements for incorporation of national content into the
    acquisitions, services and works, observing the terms of
    international treaties on the subject and in accordance with the
    regulations issued by the Board of Directors of Petróleos
    Mexicanos; andh)
    Indication of the methodology for evaluation of the offers.  IV.
    Stages for negotiating prices may be included, subject to the
    general rules approved by the Board of Directors of
    Petróleos Mexicanos. These rules shall ensure an impartial,
    honest and transparent process, as well as the best results.  Article 56. 
  Article 57. 
  A)
    By direct award:  I.
    Those incidents directly linked with the remediation of spills,
    emission of toxic or dangerous gases, irregular pouring of
    hydrocarbons, or any other incident that puts at risk the
    workers, population, environment or facilities used by
    Petróleos Mexicanos or its subsidiary entities, whether
    they are the consequence of accidents, sabotage, robbery, other
    intentional acts or other events that require immediate
    attention;II.
    Contracting for the services of publicly attesting officials,
    experts and legal representation in judicial or administrative
    proceedings; orIII.
    In the case of refurbishment or services provided in relation to
    the installation, maintenance or preservation of industrial
    equipment by the original manufacturer of the equipment or
    machinery, in order to preserve the technical warranty of the
    same.  B)
    By restricted invitation to at least three persons:  I.
    Contracting for the development of technological innovations
    related to the purposes of Petróleos Mexicanos and its
    subsidiary entities; orII.
    Engineering studies, consulting, advisory, investigation and
    training services.   23




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Article 58. 
  I.
    They may be either national or international. In the latter
    case, it shall be indicated whether they will be carried out in
    an open manner or pursuant to the application of an
    international treaty;II.
    Technical and economic proposals of at least three persons shall
    be compared;III.
    They shall be carried out by means of invitations including
    description of the goods, services and works, the location where
    they will be delivered or carried out, the time limits for
    presentation of proposals, as well as the mechanisms for their
    evaluation  including, among others, the subsequent
    offering of discounts;IV.
    The invitations will be made public, at a minimum through
    electronic means and in the offices of Petróleos Mexicanos
    and its subsidiary entities;V.
    There shall be at least one public stage of presentation and
    opening of proposals, which may carried out without the presence
    of the bidders; andVI.
    The decision will be made public through the same means as the
    invitation.    Article 59. 
  I.
    Bidders who unreasonably, and for reasons attributable to them,
    do not enter into the contract awarded by the entity;II.
    Suppliers or contractors that, for reasons attributable to them,
    have one of their contracts administratively cancelled;III.
    Suppliers or contractors that, for reasons attributable to them,
    do not comply with their contractual obligations and, as a
    consequence, cause damages and losses to Petróleos
    Mexicanos or its subsidiary entities;IV.
    Those who supply false information or act improperly with intent
    or in bad faith in the contracting procedure, in the entering
    into of the contract or during its duration, or during the
    course of a complaint or conciliation proceeding; andV.
    Those who contract advisory, consulting and support services of
    any type in relation to government contracting, if it is proved
    that all or part of the consideration paid to the service
    provider is in turn received by public officials directly or
    through an intermediary, regardless of whether those receiving
    the payment have any relation with the contracting.     24




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Fourth
    Section
    Special Contracting Forms
  Article 60. 
  I.
    The Nation shall maintain at all times direct control over
    hydrocarbons;II.
    No rights will be granted in petroleum reserves; therefore
    suppliers or contractors shall not be able to register them as
    their own assets, but instead the Nation will register them as
    part of its property;III.
    At all times, the control and management of the petroleum
    industry referred to in article 3 of the Regulatory Law to
    Article 27 of the Political Constitution of the United
    Mexican States Concerning Petroleum Affairs shall be maintained;IV.
    The compensation provided for in such contracts shall always be
    in cash, and in no case shall it be agreed that a percentage of
    production or of the value of sales of hydrocarbons or their
    by-products or revenues of the contracting entity, be paid for
    services or works executed, complying to this end with that
    which is stated in the following article;V.
    No preferential rights of any type shall be granted for the
    acquisition of petroleum or its by-products, or to influence in
    sales to third parties; andVI.
    No contracts shall be signed providing for production-sharing
    schemes or associations within the exclusive and strategic areas
    undertaken by the Nation, as set forth in article 3 of the
    Regulatory Law to Article 27 of the Political Constitution
    of the United Mexican States Concerning Petroleum Affairs.      Article 61. 
  I.
    It shall always be agreed in cash, be reasonable in comparison
    with the standards or uses of the industry and be included in
    the authorized Budget of Petróleos Mexicanos and its
    subsidiary entities;II.
    It shall be established by fixed schemes or predetermined
    formulae through which a determined price is obtained, in
    accordance with applicable civil legislation;III.
    Multi-year works contracts may allow for necessary revisions due
    to the incorporation of technological advances or the variation
    of market prices of feedstocks or equipment used in the
    corresponding works or that otherwise contribute to improve the
    efficiency of the project, based on the mechanisms for the
    adjustment of costs and setting of prices that have been
    authorized by the Board of Directors of Petróleos Mexicanos;IV.
    It shall be established at the time of signing the contract; 25




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V.
    Penalty provisions shall be included that apply in the case of
    negative impact caused by activities of the contractor in
    relation to environmental sustainability or breach in terms of
    opportunity, time and quality indicators; andVI.
    Additional compensation may be provided only when:  a)
    The contractor reduces costs by shortening the duration of the
    project,b)
    The contractor appropriates or benefits from new technologies
    that it has introduced, orc)
    Other circumstances occur that are attributable to the
    contractor and that result in a higher profit for Petróleos
    Mexicanos as well as better outcomes in terms of the work or
    service, provided that percentages of the value of sales or
    production of hydrocarbons are not promised. Any possible
    compensation of such type should be expressly set forth at the
    time of signing the contract.    Fifth
    Section
    Provisions relating to the production of fertilizers
  Article 62. 
    Article 63. 
  Article 64. 
  Article 65. 
  Article 66. 
   26




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Article 67. 
  I.
    Using the volumes of ammonia for direct application and
    nitrogenous fertilizers, or such fertilizers themselves, for
    purposes other than those set forth in the preceding article;II.
    Exporting the volumes of ammonia for direct application and
    nitrogenous fertilizers, or such fertilizers themselves, that
    have been produced pursuant to the scheme set forth in
    article 62 of this Law;III.
    Not passing along the benefits obtained from the application of
    the program to the next link in the chain of production,
    including to end-users; andIV.
    Presenting false documentation to authorities for the purpose of
    obtaining the benefits referred to in this section.  Article 68. 
    Article 69. 
    Chapter V
    Specific reports of Petróleos Mexicanos
  Article 70. 
  I.
    A report of the Director General on the advances made by
    Petróleos Mexicanos and its subsidiary entities, as well as
    the policies followed by the administrators and, if applicable,
    the principal outstanding projects. Such report shall be
    prepared by line or branch of business, as well as employ those
    indicators or parameters typically used at the international
    level for accurate and timely measurement of the results of
    Petróleos Mexicanos and its subsidiary entities;II.
    An explanation and statement of the principal policies and
    accounting and information-collecting criteria followed in the
    preparation of financial data;III.
    Statements that show the financial condition of the entity
    during and at the close of the fiscal year, its changes and
    results, as well as the additional information necessary to
    complete or clarify the data provided with such statements;IV.
    A report on the application of resources pursuant to this Law,
    including the deviations in amounts, time and scope of execution
    of the contracts that are carried out; andV.
    The report referred to in this article shall have attached to it
    the opinion of the Board of Directors on the execution of the
    annual and strategic program of the entity, as well as the
    reports prepared by the Commissioner and the opinion of the
    external auditor.   27




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Article 71. 
        Chapter VI
    Final Provisions
  Article 72. 
    Article 73. 
    TRANSITORY
    PROVISIONS
  First. 
  Second. 
  Third. 
 28




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Fourth. 
  Fifth. 
    Sixth. 
  Seventh. 
  I.
    Undertake acquisitions, leasing, works and services related to
    the core activities of a productive character referred to in
    articles 3 and 4 of the Regulatory Law to Article 27
    of the Political Constitution of the United Mexican States
    Concerning Petroleum Affairs, as well as to petrochemicals other
    than basic petrochemicals, pursuant to the provisions of this
    Law, provided that the Board of Directors has first issued the
    guidelines referred to in article 19, section IV,
    subsection j) of this Law. Until such time, the entity will
    continue to be subject to the current regulations in respect of
    acquisitions, leasing, rendering of services, public works and
    related services, without prejudice to the applicability of
    articles 60 and 61 of this Law.    II.
    Prepare and submit its financing proposals to the Ministry of
    Finance and Public Credit, pursuant to section I of
    article 44 of this Law, and register only financing
    transactions before such Ministry;III.
    Undertake, without the authorization of the Ministry of Finance
    and Public Credit, the budgetary adjustments that it considers
    necessary, except those that would increase the global
    expenditure threshold or the programmable budget for personal
    services or pensions.       29




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IV.
    Apply that which is set forth in article 49,
    section VI of this Law, once the Strategy and Investment
    Committee is functioning.  Transitory
    Provisions Regarding Debt
  Eighth. 
  I.
    The amounts to be contracted for are part of the net
    indebtedness authorized by the Congress of the Union;II.
    Such contracting complies, in the opinion of the Federal
    Executive, with the goals set forth in the business plan
    referred to in article 19, section III, of this Law, for
    the first two years following the effectiveness of this Law,
    save for the existence of justification for
    non-compliance; andIII.
    The Audit and Performance Evaluation, Strategy and Investment
    and Compensation Committees are functioning.    Transitory
    Provisions Regarding Budget
  Ninth. 
  I.
    It may employ up to 35% of its surplus income or
    11,000 million pesos, whichever amount is greater, to
    increase its investment, maintenance and operating expenditures;      II.
    Once there has been compliance with that which is stated in the
    last paragraph of the section above, and if and when doing so
    does not affect Petróleos Mexicanos financial balance
    goal during the corresponding year, it may undertake without
    authorization from the Ministry of Finance and Public Credit the
    budgetary adjustments that it considers necessary, except for
    those that would increase the global threshold of expenditures
    or the programmable budget for personal services; it may also at
    such time employ up to 50% of its surplus income or
    12,500 million pesos, whichever amount is greater, to
    increase its investment, maintenance and operating expenditures,
    to the extent that the programmable budget for personal services
    is not increased.    a)
    Complies, in the opinion of the Federal Executive, with the
    goals set forth in the business plan referred to in
    article 19, section III, of this Law, for the first
    two years following its becoming effective, unless there is
    justification for non-compliance;b)
    Issues its organic statute, and the Audit and Performance
    Evaluation, Strategy and Investment and Compensation Committees
    are functioning; and 30




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c)
    Has issued citizen bonds in an amount not less than 3% of the
    total short and long-term debt reported in its latest
    consolidated financial statements.  III.
    In the year following application of that which is set forth in
    the preceding section II, and if and when doing so does not
    affect its financial balance goal during the corresponding year,
    it may employ up to 62.5% of its surplus income or
    14,000 million pesos, whichever amount is greater, to
    increase its investment, maintenance and operation expenditures,
    to the extent that the programmable budget for personal services
    is not increased.    IV.
    Once Petróleos Mexicanos is in compliance with that which
    is set forth in the last paragraph of the preceding section, and
    if and when doing so does not affect its financial balance goal
    during the corresponding year, it may employ up to 75% of its
    surplus income or 15,000 million pesos, whichever amount is
    greater, to increase its investment, maintenance and operating
    expenditures, to the extent that the programmable budget for
    personal services is not increased.    a)
    Complies, in the opinion of the Federal Executive, with the
    goals set forth in the business plan referred to in
    article 19, section III, of this Law, for the year
    following compliance with the terms set forth in the last
    paragraph of the preceding section III, unless there is
    justification for non-compliance; andb)
    Has issued citizen bonds in an amount not less than 5% of the
    total short and long-term debt reported in its latest
    consolidated financial statements.  V.
    In the year following application of that which is set forth in
    the preceding section IV, Petróleos Mexicanos may
    employ up to 87.5% of its surplus income or 15,000 million
    pesos, whichever amount is greater, to increase its investment,
    maintenance and operating expenditures, to the extent that the
    programmable budget for personal services is not increased.        Tenth. 
    Eleventh. 
 31




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Twelfth. 
  Other
    Transitory Provisions
  Thirteenth. 
          I.
    Publishing and promoting the strategy referred to in this
    article;II.
    Identifying opportunities for the development of national
    suppliers and contractors;III.
    Proposing policies and actions for the accomplishment of the
    objectives under this article;IV.
    Assisting Petróleos Mexicanos and its subsidiary entities
    with the actions necessary to achieve the outlined objectives;V.
    Tracking development of the strategy and reporting on progress
    to the Board of Directors;VI.
    Supporting Nacional Financiera S.N.C. in actions undertaken by
    the fund referred to in the following article, as well as in the
    promotion of financing schemes for the development of national
    suppliers and contractors; andVII.
    All others set forth in the applicable regulations.    Fourteenth. 
     32




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Fifteenth. 
  SECOND ARTICLE. ...
  THIRD ARTICLE. ...
  FOURTH ARTICLE. ...
  Gustavo Madero Muñnoz César Horacio Duarte Jáquez Renán Cleominio Zoreda
    Novelo Margarita Arenas
    Guzmán
  Felipe de Jesús Calderón
    Hinojosa. Fernando Francisco Gómez Mont Urueta