UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 20-F/A
      AMENDMENT NO. 1 TO ANNUAL REPORT
 PURSUANT TO SECTION 13 OR 15(d) OF
 THE SECURITIES EXCHANGE ACT OF 1934
  For the fiscal year ended
    December 31, 2007
 Commission File Number 0-99
  PETRÓLEOS
    MEXICANOS
 (Exact name of registrant as
    specified in its charter)
  Mexican Petroleum

United Mexican States(Translation of registrants name into English)

(Jurisdiction of incorporation or organization)       Avenida Marina Nacional
    No. 329
 Colonia Huasteca
 México, D.F. 11311
 México
 (Address of principal executive
    offices)
  Celina Torres Uribe
 (5255) 1944 9700
 ri@dcf.pemex.com
 Avenida Marina Nacional No. 329
 Torre Ejecutiva Piso 38 Colonia
    Huasteca
 11311 México, D.F., México
 (Name, telephone,
    e-mail
    and/or facsimile number
 and address of company contact
    person)
      Securities registered or to be
    registered pursuant to Section 12(b) of the Act.
 None
  Securities registered or to be
    registered pursuant to Section 12(g) of the Act.
 None
  Securities for which there is a
    reporting obligation pursuant to Section 15(d) of the Act.
 Title of Each Class
 9.50% Global Guaranteed Bonds due
    2027
 91/4%
    Global Guaranteed Bonds due 2018
 93/8% Notes
    due December 2, 2008
 9.125% Notes due 2010
 8.00% Notes due 2011
 7.875% Notes due 2009
 8.625% Bonds due 2022
 7.375% Notes due 2014
 6.125% Notes due 2008
 93/8%
    Guaranteed Notes due 2008
 5.75% Notes due 2015
 91/4%
    Guaranteed Bonds due 2018
 8.625% Guaranteed Bonds due 2023
 9.50% Guaranteed Bonds due 2027
 6.625% Bonds due 2035
  Indicate by check mark if the
    registrant is a well-known seasoned issuer, as defined in
    Rule 405 of the Securities Act.
 o Yes     þ No
  If this report is an annual or
    transition report, indicate by check mark if the registrant is
    not required to file reports pursuant to Section 13 or 15
    (d) of the Securities Exchange Act of 1934.
 o Yes     þ No
  Indicate by check mark whether the
    registrant (1) has filed all reports required to be filed
    by Section 13 or 15(d) of the Securities Exchange Act of
    1934 during the preceding 12 months (or for such shorter
    period that the registrant was required to file such reports),
    and (2) has been subject to such filing requirements for
    the past 90 days.
 þ Yes     o No
  Indicate by check mark whether the
    registrant is a large accelerated filer, an accelerated filer,
    or a non-accelerated filer. See definition of accelerated filer
    and large accelerated filer in
    Rule 12b-2
    of the Exchange Act, (Check one):
 Large accelerated
    filer o          Accelerated
    filer o          Non-accelerated
    filer þ
  Indicate by check mark which basis
    of accounting the registrant has used to prepare the financial
    statements included in this filing:
 o U.S.
    GAAP          o IFRS          þ Other
  If Other has been
    checked in response to the previous question, indicate by check
    mark which financial statement item the registrant has elected
    to follow.
 o Item 17     þ Item 18
  If this is an annual report,
    indicate by check mark whether the registrant is a shell company
    (as defined in
    Rule 12b-2
    of the Exchange Act).
 o Yes     þ No




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##### 





TABLE OF
    CONTENTS
  Explanatory Note


1Item 18.


Financial Statements


2  i




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##### 



EXPLANATORY
    NOTE
  Form 20-F Form 20-F) Form 20-F
  Form 20-F. Form 20-F Form 20-F.
 1




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##### 



Item 18.
    Financial
    Statements.    2




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##### 



SIGNATURE
  Form 20-F/A
    By:
    /s/  Esteban
    Levin BalcellsName:
    Esteban Levin Balcells
    Title: Chief Financial Officer   3




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##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES
    AND SUBSIDIARY COMPANIES
  CONSOLIDATED
    FINANCIAL STATEMENTS
  DECEMBER 31, 2007, 2006 AND 2005
  INDEX
  Contents

PageReport of KPMG Cárdenas Dosal, S.C., Registered Public
    Accounting Firm

F-2Report of PricewaterhouseCoopers, Registered Public Accounting
    Firm

F-3Consolidated financial statementsConsolidated balance sheets

F-4Consolidated statement of operations

F-5Consolidated statements of changes in equity

F-6Consolidated statements of changes in financial position

F-7Notes to the consolidated financial statements

F-8 through F-100  F-1




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##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  
              /s/  Eduardo
    Palomino      F-2




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##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     
      Bulletin D-3,
  Bulletin C-10,
          
    F-3




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##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES
    AND SUBSIDIARY COMPANIES
  CONSOLIDATED BALANCE SHEETS
 (In thousands of Mexican pesos as of December 31,
    2007, purchasing power and in thousands of U.S. dollars)
  2007


2007


2006(Unaudited)ASSETS:Current assets:Cash and cash equivalents (Note 5)

U.S. $
15,736,617


Ps.
170,997,240


Ps.
195,776,457Accounts, notes receivable and other  Net
    (Note 6)


13,943,286



151,510,543



137,163,105Inventories  Net (Note 7)


8,571,822



93,143,136



62,063,798Derivative financial instruments (Note 11)


1,188,075



12,909,868



4,389,83623,703,183



257,563,547



203,616,739Total current assets


39,439,800



428,560,787



399,393,196Investments in shares of non consolidated subsidiaries and
    affiliates (Note 8)


3,042,770



33,063,354



32,760,946Properties, plant and equipment  Net (Note 9)


73,056,399



793,845,453



737,195,457Intangible asset derived from the actuarial computation of labor
    obligations (Note 12)


6,626,864



72,008,835



76,495,133Other assets  Net


257,880



2,802,177



4,175,692Total assets

U.S. $
122,423,713


Ps.
1,330,280,606


Ps.
1,250,020,424LIABILITIES:Current liabilities:Current portion of long-term debt (Note 10)

U.S. $
6,998,778


Ps.
76,050,128


Ps.
66,240,278Suppliers


3,233,728



35,138,344



37,102,983Accounts and accrued expenses payable


1,665,488



18,097,530



14,592,081Taxes payable


13,490,765



146,593,355



45,006,644Derivative financial instruments (Note 11)


1,250,160



13,584,495



13,372,143Total current liabilities


26,638,919



289,463,852



176,314,129Long-term liabilities:Long-term debt (Note 10)


39,096,323



424,828,472



524,475,242Reserve for sundry creditors and others


2,895,883



31,467,252



31,513,072Reserve for labor obligations (Note 12)


48,609,566



528,201,272



471,665,183Deferred taxes (Note 18i.)


590,077



6,411,897



4,597,172Total liabilities


117,830,768



1,280,372,745



1,208,564,798EQUITY (Note 14):Certificates of Contribution A


8,922,897



96,957,993



96,957,993Mexican Government increase in equity of Subsidiary Entities


13,294,217



144,457,629



133,296,805Surplus in the restatement of equity


16,430,011



178,531,795



159,893,393Effect on equity from labor obligations (Note 12)


(4,763,352
)


(51,759,539
)


(48,326,747
)Derivative financial instruments (Note 11)


(101,749
)


(1,105,629
)


(1,762,328
)33,782,024



367,082,249



340,059,116Accumulated losses:From prior years


(27,504,262
)


(298,866,819
)


(345,556,695
)Net income (loss) for the year


(1,684,817
)


(18,307,569
)


46,953,205(29,189,079
)


(317,174,388
)


(298,603,490
)Total equity


4,592,945



49,907,861



41,455,626Commitments and contingencies (Notes 15 and 16)










Total liabilities and equity

U.S. $
122,423,713


Ps.
1,330,280,606


Ps.
1,250,020,424    F-4




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##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES
    AND SUBSIDIARY COMPANIES
  CONSOLIDATED STATEMENT OF OPERATIONS
 (In thousands of Mexican pesos as of December 31,
    2007, purchasing power and in thousands of U.S. dollars)
  2007


2007


2006


2005(Unaudited)Net sales:Domestic

U.S. $
54,485,281


Ps.
592,047,961


Ps.
567,289,873


Ps.
545,339,433Export


49,964,740



542,926,858



535,144,048



457,266,832Services income


97,606



1,060,609



1,075,947



1,224,808Total revenues


104,547,627



1,136,035,428



1,103,509,868



1,003,831,073Cost of sales


42,394,374



460,665,742



418,258,210



389,943,899Gross income


62,153,253



675,369,686



685,251,658



613,887,174General expenses:Transportation and distribution expenses


2,282,172



24,798,539



24,921,656



23,655,910Administrative expenses


5,534,636



60,140,465



56,052,773



50,527,884Total general expenses


7,816,808



84,939,004



80,974,429



74,183,794Operating income


54,336,446



590,430,682



604,277,229



539,703,380Other revenues (principally IEPS benefit)  Net
    (Note 18h.)


7,640,114



83,019,010



61,213,533



2,896,394Comprehensive financing result:Interest  Net


(2,896,873
)


(31,478,006
)


(36,195,263
)


(41,500,949
)Exchange (loss) gain  Net


(132,048
)


(1,434,868
)


(2,470,584
)


19,031,585Gain on monetary position


1,184,064



12,866,287



14,819,222



17,633,273(1,844,857
)


(20,046,587
)


(23,846,625
)


(4,836,091
)Profit sharing in non-consolidated subsidiaries and affiliates
    (Note 8)


510,303



5,545,054



10,073,577



8,658,665Income before taxes and duties


60,642,006



658,948,159



651,717,714



546,422,348Hydrocarbon extraction duties and others (Note 18)


61,474,951



667,999,120



587,020,786



538,063,741Excess gain duties (Note 18d.)










8,223,820



60,869,738Hydrocarbon income tax (Note 18i.)


554,965



6,030,367



4,914,859



2,135,245Income tax (Note 18k.)


296,906



3,226,241



4,605,044



3,981,678Special tax on production and services (IEPS Tax)
    (Note 18h.)














21,824,06062,326,822



677,255,728



604,764,509



626,874,462Cumulative effect of adoption of new accounting standards
    (Notes 3l. and 3m.)














(1,905,868
)Net (loss) income for the year

(U.S.$
1,684,816
)

(Ps.
18,307,569
)

Ps.
46,953,205


(Ps.
82,357,982
)    F-5




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##### 






PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
  CONSOLIDATED
    STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS
 ENDED
    DECEMBER 31, 2007, 2006 AND 2005
  (In thousands of Mexican pesos as of December 31, 2007,
    purchasing power and in thousands of U.S. dollars)
  MexicanGovernmentincrease


Surplus





Effect


Retained earningsin equity of


in the


Derivative


on equity


(Accumulated losses)Certificates of


Subsidiary


restatement


financial


from labor


From prior


For theContribution A


Entities


of equity


instruments


obligations


years


year


TotalBalances as of December 31, 2004

Ps.
96,957,993


Ps.
36,411,340


Ps.
147,644,457


Ps.



(Ps.
7,782,166
)


(Ps. 207,589,715
)

(Ps.
28,443,617
)

Ps.
37,198,292Transfer to prior years accumulated losses






















(28,443,617
)


28,443,617



Minimum guaranteed dividends paid to the Mexican Government
    approved by the Board of Directors on June 10, 2006
    (Note 14)






















(11,482,869
)






(11,482,869
)Increase in equity of the Subsidiary Entities made by the
    Mexican Government (Note 14)






48,157,553























48,157,553Comprehensive loss for the year (Note 13)










8,184,288



(7,036,437
)


(21,672,659
)






(82,357,982
)


(102,882,790
)Balances as of December 31, 2005


96,957,993



84,568,893



155,828,745



(7,036,437
)


(29,454,825
)


(247,516,201
)


(82,357,982
)


(29,009,814
)Transfer to prior years accumulated losses






















(82,357,982
)


82,357,982



Minimum guaranteed dividends paid to the Mexican Government
    approved by the Board of Directors on
    May 18th,
    2005 (Note 14)






















(16,392,606
)






(16,392,606
)Increase in equity of the Subsidiary Entities made by the
    Mexican Government






48,727,912























48,727,912Comprehensive income for the year (Note 13)










4,064,648



5,274,109



(18,871,922
)


710,094



46,953,205



38,130,134Balances as of December 31, 2006


96,957,993



133,296,805



159,893,393



(1,762,328
)


(48,326,747
)


(345,556,695
)


46,953,205



41,455,626Transfer to prior years accumulated losses






















46,953,205



(46,953,205
)


Minimum guaranteed dividends paid to the Mexican Government
    approved by the Board of Directors on August 29, 2007
    (Note 14)






















(263,329
)






(263,329}Increase in equity of the Subsidiary Entities made by the
    Mexican Government (Note 14)






11,160,824























11,160,824Comprehensive loss for the year (Note 13)










18,638,402



656,699



(3,432,792
)






(18,307,569
)


(2,445,260
)Balances as of December 31, 2007

Ps.
96,957,993


Ps.
144,457,629


Ps.
178,531,795


(Ps.
1,105,629
)

(Ps.
51,759,539
)


(Ps. 298,866,819
)

(Ps
18,307,569
)

Ps.
49,907,861Unaudited

U.S.$
8,922,897


U.S.$
13,294,217


U.S.$
16,430,011


(U.S.$
101,749
)

U.S.$
4,763,352


(U.S.$
27,504,262
)

(U.S.$
1,684,817
)

U.S.$
4,592,945


F-6




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##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES
    AND SUBSIDIARY COMPANIES
 CONSOLIDATED
    STATEMENTS OF CHANGES IN FINANCIAL POSITION

(In thousands of Mexican pesos as of December 31,
    2007, purchasing power and in thousands of U.S. dollars) 2007


2007


2006


2005(Unaudited)Operating activities:Net (loss) income for the year

(U.S.$
1,684,817
)

(Ps.
18,307,569
)

Ps.
46,953,205


(Ps.
82,357,982
)Charges to operations not requiring the use of funds:Depreciation and amortization


6,680,506



72,591,718



65,672,189



56,995,357Reserve for labor obligations cost


7,850,662



85,306,866



74,493,349



63,787,616Profit sharing in non-consolidated subsidiaries and affiliates


510,302



5,545,054



10,073,577



8,658,665Deferred taxes


177,417



1,927,847



904,162



2,135,247Impairment on fixed assets










703,247



1,432,69113,534,070



147,063,916



198,799,729



50,651,594Funds generated (used) in operation activities:Accounts, notes receivable and other


(1,320,373
)


(14,347,438
)


(37,177,837
)


9,930,406Inventories


(1,155,331
)


(12,554,059
)


(2,678,038
)


(6,527,714
)Intangible asset derived from the actuarial computation of labor
    obligations










23,316,114



(14,672,035
)Other assets


126,403



1,373,515



(576,898
)


Suppliers


(180,803
)


(1,964,639
)


3,676,529



6,291,447Accounts payable and accrued expenses


365,779



3,974,633



3,382,644



(14,317,686
)Taxes payable


9,348,872



101,586,711



(26,857,283
)


24,181,434Reserve for sundry creditors and others


(4,217
)


(45,820
)


3,744,807



(1,203,805
)Derivative financial instruments


(747,287
)


(8,120,165
)


(2,541,921
)


16,798,338Funds provided by operating activities


19,967,113



216,966,654



163,087,846



71,131,979Financing activities:Minimum guaranteed dividends paid to the Mexican Government


(24,234
)


(263,329
)


(16,392,606
)


(11,482,869
)(Decrease) Increase in Debt  Net


(8,267,556
)


(89,836,920
)


10,202,873



65,892,138Increase in equity of Subsidiary Entities


1,027,114



11,160,824



48,727,912



48,157,553Retirement, seniority premiums and other post-retirement
    benefits payments


(2,550,779
)


(27,717,270
)


(17,042,349
)


Sale of future accounts receivable














(40,871,801
)Funds (used in) provided by financing activities


(9,815,455
)


(106,656,695
)


25,495,830



61,695,021Investing activities:Investment in shares


(538,133
)


(5,847,462
)


(14,153,450
)


(7,485,420
)Increase in fixed assets  Net


(11,893,920
)


(129,241,714
)


(109,103,789
)


(89,577,399
)Funds used in investing activities


(12,432,053
)


(135,089,176
)


(123,257,239
)


(97,062,819
)Net (decrease) increase in cash and cash equivalents


(2,280,395
)


(24,779,217
)


65,326,437



35,764,181Cash and cash equivalents at beginning of the year


18,017,012



195,776,457



130,450,020



94,685,839Cash and cash equivalents at end of the year

U.S.$
15,736,617


Ps.
170,997,240


Ps.
195,776,457


Ps.
130,450,020    F-7




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##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY
    COMPANIES
 NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS
 FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    NOTE 1 
    APPROVAL:      NOTE 2 
    STRUCTURE AND BUSINESS OPERATIONS OF PETRÓLEOS MEXICANOS,
    SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES:
    Constitución Politica de
    los Estados Unidos Mexicanos Ley Reglamentaria del Artículo 27 Constitucional en
    el Ramo del Petróleo Ley Orgánica de
    Petróleos Mexicanos y Organismos Subsidiarios
          F-8




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##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  and/or
    I.
    Pemex-Exploration and Production explores for and produces crude
    oil and natural gas; additionally, this entity transports,
    stores and markets such products;  II.
    Pemex-Refining refines petroleum products and derivatives
    thereof that may be used as basic industrial raw materials;
    additionally, this entity stores, transports, distributes and
    markets such products and derivatives;  III.
    Pemex-Gas and Basic Petrochemicals processes natural gas,
    natural gas liquids and derivatives thereof that may be used as
    basic industrial raw materials, and stores, transports,
    distributes and markets such products; additionally, this entity
    stores, transports, distributes and markets Basic
    Petrochemicals; and  IV.
    Pemex-Petrochemicals engages in industrial petrochemical
    processing and stores, distributes and markets Secondary
    Petrochemicals.             F-9




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##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    NOTE 3 
    SIGNIFICANT
    ACCOUNTING POLICIES:          a.
    Effects
    of inflation on the financial information  Bulletin B-10 Normas de Información Financiera (Bulletin B-10). Bulletin B-10.
    InflationDecember 31,

NCPI


for the Year2007


125.5640



3.76
%2006


121.0150



4.05
%2005


116.3010



3.33
%   b.
    Consolidation     F-10




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##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    Bulletin B-10.
      c.
    Long-term
    productive infrastructure projects (PIDIREGAS)  Entidades
    Paraestatales de la Administración Pública Federal
      d.
    Exploration
    and drilling costs and specific oil-field exploration and
    depletion reserve     F-11




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##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  e.
    Reserve
    for abandonment cost of wells      f.
    Cash and
    cash equivalents    g.
    Inventory
    and cost of sales    I.
    Crude oil and its derivatives for export: at realizable value,
    determined on the basis of average export prices at year end.II.
    Crude oil, natural gas and their derivatives for domestic sale:
    at realizable value, in accordance with international market
    prices at year end.III.
    The refined products inventories: at their acquisition or
    production cost calculated in accordance with crude oil costs
    and auxiliary materials.IV.
    Gas and petrochemicals: at direct standard cost of such products
    without exceeding their market value.V.
    Materials spare parts fittings: at the last purchase price
    without exceeding their market value.VI.
    Materials in transit: at acquisition cost.      h.
    Investment
    in shares of non-consolidated subsidiary companies affiliates
    companies     F-12




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##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  i.
    Properties,
    plant and equipment        %

YearsBuildings

3

33Plants and drilling equipment

3-5

20-33Furniture and fixtures

10-25

4-10Offshore platforms

4

25Transportation equipment

4-20

5-25Pipelines

4

25Software/computers

10-25

4-10     Reglamento de Trabajos Petroleros
     F-13




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  j.
    Impairment
    of the value of long-lived assets    k.
    Accruals    l.
    Labor
    obligations      Bulletin D-3,
  m.
    Derivative
    financial instruments and hedging operations  Bulletin C-10, (Bulletin C-10)
  Bulletin C-10
 F-14




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  n.
    Financial
    instruments with characteristics of liability, equity or
    both    o.
    Restatement
    of equity, other contributions and retained earnings    p.
    Cumulative
    effect of the Hydrocarbon tax    q.
    Surplus
    in the restatement of equity    r.
    Taxes and
    federal duties  Ley del Impuesto Sobre la Renta Ley del Impuesto al Activo Ley del Impuesto
    Empresarial a Tasa Única
  s.
    Special
    Tax on Production and Services (IEPS Tax)    t.
    Revenue
    recognition    u.
    Comprehensive
    result   F-15




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    v.
    Comprehensive
    financing result        w.
    Contingencies    x.
    Deferred
    taxes    y.
    Accounting
    changes  Statement of Income Consejo Mexicano para la Investigación y
    Desarrollo de Normas de Información Financiera Interpretación a las
    Normas de Información Financiera
   F-16




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  Capitalization of Comprehensive Financial Results
      z.
    Convenience
    translation  Banco de México
 F-17




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  NOTE 4 
    FOREIGN
    CURRENCY EXPOSURE:    Amounts in foreign currency(Thousands)Net liability


Year-end


Amounts inAssets


Liabilities


position


Exchange rate


pesos2007:U.S. dollars


16,950,060



(30,083,877
)


(13,133,817
)


10.8662


(
Ps.142,714,682
)Japanese yen






(142,217,370
)


(142,217,370
)


0.0973



(13,837,750
)Pounds sterling


230



(402,411
)


(402,181
)


21.6074



(8,690,086
)Euros


9,371



(5,932,198
)


(5,922,827
)


15.8766



(94,034,355
)Swiss francs






(260
)


(260
)


9.5957



(2,495
)Currency Danish crowns






(250
)


(250
)


2.0075



(502
)Total liability position, before foreign currency hedging

















(
Ps.259,279,870
)Amounts in foreign currency(Thousands)


Year-endNet liability


Exchange


AmountsAssets


Liabilities


position


rate


in nominal pesos2006:(1)U.S. dollars


20,872,208



(46,944,810
)


(26,072,603
)


10.8810


(
Ps.283,695,982
)Japanese yen






(150,040,948
)


(150,040,948
)


0.0913



(13,698,739
)Pounds sterling


711



(401,812
)


(401,101
)


21.3061



(8,545,898
)Euros


23,635



(4,201,854
)


(4,178,219
)


14.3248



(59,852,152
)Swiss francs


562,443



(443,338
)


119,105



8.9064



1,060,797Total liability position, before foreign currency hedging

















(
Ps.364,731,974
)     (1)
    
    The figures of December 31,
    2006 in pesos are stated in thousands of Mexican pesos as of
    December 31, 2006 purchasing power (nominal value).
    Furthermore, as of December 31, 2007 and 2006, PEMEX had
    foreign exchange hedging instruments, which are discussed in
    Note 11.  NOTE 5 
    CASH AND
    CASH EQUIVALENTS:    2007


2006Cash on hand and in banks

Ps.
64,578,352


Ps.
95,760,432Marketable securities


106,418,888



100,016,025Ps.
170,997,240


Ps.
195,776,457  F-18




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  NOTE 6 
    ACCOUNTS,
    NOTES RECEIVABLE AND OTHER:    2007


2006Domestic customers

Ps.
40,506,098


Ps.
34,729,334Export customers


25,430,178



19,625,463Negative IEPS Tax pending to be credited (Note 18)


32,943,613



13,372,968Advance payments to Mexican Government of minimum guaranteed
    dividends (Note 14)


4,270,225



268,990Specific funds (Note 14)


11,858,575



35,589,790Employees and officers


3,648,372



3,174,902Tax credits


4,035,632



1,505,183Other accounts receivable


30,308,784



31,570,645153,001,477



139,837,275Less allowance for doubtful accounts


(1,490,934
)


(2,674,170
)Ps.
151,510,543


Ps.
137,163,105   NOTE 7 
    INVENTORIES:    2007


2006Crude oil, refined products, derivatives and petrochemical
    products

Ps.
87,971,050


Ps.
56,796,075Materials and supplies in stock


6,370,017



6,673,156Materials and products in transit


148,376



300,12394,489,443



63,769,354Less allowance for slow-moving and obsolete inventory


(1,346,307
)


(1,705,556
)Ps.
93,143,136


Ps.
62,063,798  F-19




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  NOTE 8 
    INVESTMENT
    IN SHARES OF NON-CONSOLIDATED SUBSIDIARIES AND
    ASOCCIATED:    Percentage of


Carrying Value at December 31,Subsidiaries and Affiliates Shares:

Investment


2007


2006Repsol YPF,
    S.A.(1)


5.00
%

Ps.
23,146,258


Ps.
23,192,819Deer Park Refining
    Limited(2)


50.00
%


7,113,824



5,924,890Instalaciones Inmobiliarias para Industrias,
    S.A. de C.V.


100.00
%


1,122,215



1,110,643Servicios Aéreos Especializados Mexicanos, S.A. de
    C.V.


49.00
%


5,147



5,147Other-net






1,675,910



2,527,447Total investments





Ps.
33,063,354


Ps.
32,760,946   For the Year Ended December 31,Profit Sharing in Non-Subsidiaries and Affiliates:

2007


2006


2005Repsol YPF, S.A.(1)

Ps.
588,729


Ps.
3,621,872


Ps.
2,610,657Deer Park Refining Limited(2)


4,944,329



6,419,178



6,004,199Instalaciones Inmobiliarias para Industrias,
    S.A. de C.V.


11,996



32,527



43,809Total profit sharing

Ps.
5,545,054


Ps.
10,073,577


Ps.
8,658,665     (1)
    
    PEMEX owned 59,884,453 and
    59,404,128 shares of Repsol YPF, S.A. at December 31,
    2007 and 2006, respectively.(2)
    
    PMI NASA has a 50% joint venture
    with Shell Oil Company, through which it owns a 50% interest in
    a petroleum refinery located in Deer Park, Texas. The investment
    is accounted for under the equity method. During 2007, 2006 and
    2005, PEMEX recorded Ps. 4,944,329, Ps. 6,419,178 and Ps.
    6,004,199 of profits, respectively, related to its equity in the
    results of the joint venture, which has been recorded under
    profit sharing in non-consolidated subsidiaries and
    affiliates in the statement of operations. In 2006 and
    2005, PEMEX paid the joint venture Ps. 11,078,973 and Ps.
    10,742,295, respectively, for the processing of crude oil. As of
    December 31, 2006 the contract between PMI NASA and
    Pemex-Refining, was concluded and it was not renewed. F-20




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
   NOTE 9 
    PROPERTIES,
    PLANT AND EQUIPMENT:    2007


2006Plants

Ps.
379,268,733


Ps.
357,366,268Pipelines


296,304,941



278,873,434Wells


466,157,259



412,518,087Drilling equipment


22,226,019



22,363,980Buildings


47,681,968



42,210,278Offshore platforms


160,543,843



139,223,391Furniture and equipment


36,440,294



34,809,700Transportation equipment


14,146,501



14,008,2391,422,769,558



1,301,373,377Less:Accumulated depreciation and amortization


(760,177,709
)


(693,295,137
)Net value


662,591,849



608,078,240Land


39,842,669



42,164,885Construction in progress


90,720,481



86,150,194Fixed assets to be disposed of


690,454



802,138Total

Ps.
793,845,453


Ps.
737,195,457   a)
    PEMEX capitalized interest associated with the construction or
    installation of property, plant and equipment, totaling
    Ps. 6,996,305 and Ps. 5,541,036, as of
    December 31, 2007 and 2006, respectively. Starting in 2007,
    as part of the adoption of NIF-6, PEMEX capitalized Ps 5,350,849
    of comprehensive financing costs related to qualified fixed
    assets, as these costs were directly related to investments
    during the acquisition phase of a project.b)
    Total depreciation of fixed assets and amortization of wells for
    the years ended December 31, 2007, 2006 and 2005 were
    Ps. 72,591,718, Ps. 65,672,189 and Ps.56,995,357,
    respectively, which includes amortization costs related to
    dismantlement and abandonment cost for the years ended
    December 31, 2007, 2006 and 2005 of Ps. 2,554,062,
    Ps. 508,361 and Ps. 1,370,730, respectively.c)
    As of December 31, 2007 and 2006, the capitalized portion
    related to dismantlement and abandonment costs, net of
    accumulated amortization, and determined based on the present
    value (discounted) of the project cost, was Ps. 17,148,400
    and Ps. 16,027,307, respectively.d)
    During 2007 PEMEX performed its impairment review of the value
    of long-live assets and concluded that there was no impairment
    for the year. As of December 31, 2006 and 2005, PEMEX
    recognized cumulative impairment charges in the value of the
    long-lived assets amounting to Ps. 14,593,955 and
    Ps. 13,890,780, respectively. (see Note 3j.).  NOTE 10 
    DEBT:  Ley General de Deuda Pública Secretaría de Hacienda y Crédito
    Público
 F-21




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
            a.
    The Master Trust obtained credit lines from export credit
    agencies totaling U.S.$1,002,629.b.
    During the second quarter of 2007, the Master Trust repurchased,
    in the open market certain amount of its outstanding
    U.S. dollar-denominated debt securities with maturities
    between 2008 and 2027. The total principal amount repurchased in
    this program was equal to U.S.$1,139,696. These securities were
    cancelled after their repurchase.c.
    On October 18, 2007, the Master Trust utilized the full
    amount of its syndicated revolving credit facility in the amount
    of U.S.$2,500,000. This credit line was signed on
    September 14, 2007; it may be used either by Petróleos
    Mexicanos or the Master Trust; the credit line consists of two
    tranches, A and B, with terms of three and five years,
    respectively and bears interest at rates of LIBOR plus
    20 basis points for tranche A and 25 basis points
    for tranche B; and matures in 2010 and 2012, respectively;
    and each of the tranches may be extended twice, by one year.
    This credit line replaces the two previously syndicated
    revolving credit lines, each in the amount of U.S.$1,250,000.d.
    On October 22, 2007, the Master Trust issued notes for the
    amount of U.S.$2,000,000, of which U.S.$1,500,000 notes were
    issued at a coupon rate of 5.75% due in 2018 and U.S.$500,000
    bonds at a coupon rate of 6.625%, due in 2035. This issuance was
    a second reopening of an issuance which took place on
    June 8, 2005.  e.
    During the fourth quarter of 2007, the Master Trust repurchased
    in the open market U.S.$5,763,333, of notes, which represent a
    part of its own debt in notes with maturities between 2008 and
    2027, as well as certain amount of its
    U.S. dollar-denominated perpetual notes. These securities
    were cancelled after their repurchase.    a.
    Petróleos Mexicanos obtained credit lines from export
    credit agencies totaling U.S.$56,241. These loans bear interest
    at fixed and variable rates with various maturity dates through
    2012.b.
    Petróleos Mexicanos drew a total amount of U.S.$3,300,000
    of under its revolving credit lines. These credit lines may be
    utilized by Petróleos Mexicanos and the Master Trust.c.
    On February 13, 2006, the Master Trust completed an
    exchange offer pursuant to which the Master Trust issued notes
    with a principal amount totaling U.S.$185,310 in exchange for an
    equal principal amount of notes previously issued by
    Petróleos Mexicanos, through a reopening of an original
    exchange offer made in December 2004. As a result of this second
    exchange, the Master F-22




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  Trust issued new notes and subsequently received cash payments
    from Petróleos Mexicanos upon the cancellation of the
    Petróleos Mexicanos notes acquired by the Master Trust.    June 1, 2006

U.S.$
41,254June 2, 2006


54,011August 3, 2006


90,045Total

U.S.$
185,310     a.
    The Master Trust obtained credit lines from export credit
    agencies totaling U.S.$1,914,184 and U.S.$4,250,000 by
    refinancing a syndicated loan in two tranches of U.S.$1,500,000
    and U.S.$2,750,000 due in five and seven years, respectively.  b.
    On February 2, 2006, the Master Trust reopened two series
    of notes issued on June 8, 2005 under its Medium-Term Notes
    Program Series A in two tranches: U.S.$750,000 of
    5.75% Notes due in 2015, and U.S.$750,000 of
    6.625% Notes due in 2035, both of which are guaranteed by
    Petróleos Mexicanos.c.
    The Master Trust drew a total aggregate amount of U.S.$2,250,000
    of its revolving credit lines guaranteed by Petróleos
    Mexicanos. These credit lines may be utilized by Petróleos
    Mexicanos and the Master Trust.    certificados bursatiles Tasa de Interés
    Interbancaria de Equilibrio
    
    The sale of substantial assets essential for the continued
    operations of the business;
    Liens against its assets; and
    Transfers, sales or assignments of rights to payment under
    contracts for the sale of crude oil or gas not yet earned,
    accounts receivable or other negotiable instruments.   F-23




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    December 31, 2007


December 31, 2006Foreign





ForeignPesos


currency


Pesos


currencyRate of
    Interest(2)

Maturity


(Thousands)


(Thousands)


(Thousands)


(Thousands)U.S. dollars:Bonds

Fixed from 4.75% to 9.5% and LIBOR plus 0.425% to 1.8%


Various to
    2035


Ps.
163,225,526



12,119,761


Ps.
238,931,860



21,163,109Financing assigned to PIDIREGAS

Fixed from 3.23% to 7.69% and LIBOR plus 0.02% to 2.25%


Various to
    2017



72,163,251



6,641,075



76,624,927



6,786,963Purchasing loans and project financing

Fixed from 3.32% to 5.04% and LIBOR plus 0.0625% to 2%


Various to
    2014



2,108,662



194,057



3,229,236



286,026Leasing contracts

Fixed from 8.05% to 9.91%


Various to
    2012











793,645



70,296Credit lines

LIBOR plus 0.20% and 0.25%


Various to
    2023



27,165,500



2,500,000







External trade loans

LIBOR plus 0.325% to 0.475%


Various to
    2013



46,181,350



4,250,000



48,659,972



4,310,000Bank loans

Fixed from 5.44% to 5.58% and LIBOR plus 0.7% to 1.9%


Various to
    2013



5,107,114



470,000



7,056,260



625,000Total financing in U.S. dollars








315,951,403



26,174,893



375,295,900



33,241,394Euros:Bonds

Fixed from 5.5% to 6.62%, and floating of 8.21467%


Various to
    2025



50,857,376



3,203,291



60,800,196



4,090,634Unsecured loans, banks and project financing

Fixed from 2%


2016



5,544



349



5,977



402Total financing in Euros








50,862,920



3,203,640



60,806,173



4,091,036Japanese yen:Direct loans

Fixed from 4.2%


2009



468,081



4,810,695



683,590



7,216,043Bonds

Fixed from 3.5%


2023



2,919,000



30,000,000



2,841,959



30,000,000Project financing

Prime 2.9081% and Fixed from 1% to 2.4%


Various to
    2017



10,871,232



111,729,003



9,772,409



103,158,512Total financing in Yen








14,258,313



146,539,698



13,297,958



140,374,555Sterling pound:Bonds

Fixed 7.5%


2013



8,642,960



400,000



8,842,798



VariousPesos:Certificates

TIIE less 0.07% and CETES plus 0.35% to 0.65%


Various to
    2019



81,918,416







98,019,896Syndicated bank loans

TIIE plus 0.35% and fixed from 8.4%


2008



3,500,000







7,263,130Project financing and syndicated bank loans

Fixed from 11% and TIIE plus 0.4% to 0.48%


Various to
    2012



12,333,333







14,872,123Total financing in pesos








97,751,749







120,155,149Total principal in
    pesos(1)








487,467,345







578,397,978Plus: Accrued interest








58,565







1,563,831Notes payable to contractors








13,352,690







10,753,711Total principal and interest








500,878,600







590,715,520Less: Short-term maturities








71,499,353







62,745,288Current portion of notes payable to contractors








4,550,775







3,494,990Total short-term debt








76,050,128







66,240,278Long-term debt







Ps.
424,828,472






Ps.
524,475,242   2013 and2008

2009

2010

2011

2012

Thereafter

TotalMaturity of the principal outstanding for each of the years
    ending December 31,

Ps.
76,050,128


Ps.
67,453,662


Ps.
70,150,790


Ps.
56,261,413


Ps.
38,928,853


Ps.
192,033,754


Ps.
500,878,600    (1)
    
    Includes financing from foreign
    banks of Ps. 355,682,481 and Ps. 418,347,126 as of
    December 31, 2007 and 2006, respectively.(2)
    
    As of December 31, 2007 and
    2006 the rates were as follows: LIBOR, 4.59625% and 5.37%,
    respectively; the Prime rate in Japanese yen, 1.875% and 1.625%,
    respectively; the Cetesrate, 7.62% for 91 days and
    7.71% for 182 days and 7.17% for 91 days and 7.20% for
    182 days, respectively; TIIE 7.37% and 8.95%, respectively. F-24




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    2007


2006Total notes payable to
    contractors(1)(2)(3)(4)

Ps.
13,352,690


Ps.
10,753,711Less: Current portion of notes payable to contractors


4,550,775



3,494,990Notes payable to contractors (long-term)

Ps.
8,801,915


Ps.
7,258,721     (1)
    
    On November 26, 1997,
    Petróleos Mexicanos and Pemex-Refining entered into a
    financed public works contract and a unit-price public works
    contract with Consorcio Proyecto Cadereyta Conproca, S.A. de
    C.V. The related contracts are for the reconfiguration and
    modernization of the Ing. Héctor R. Lara Sosa refinery in
    Cadereyta, N.L. The original amount of the financed public works
    contract was U.S.$1,618,352 , plus a financing cost of
    U.S.$805,648 , due in twenty semi-annual payments of
    U.S.$121,200. The original amount of the unit-price public works
    contract was U.S.$80,000, including a financing cost of
    U.S.$47,600 payable monthly based on the percentage of
    completion. At December 31, 2007 and 2006, the outstanding
    balances of the respective contracts were Ps. 5,854,295 and Ps.
    8,186,797, respectively.(2)
    
    On June 25, 1997, PEMEX
    entered into a
    10-year
    service agreement with a contractor for a daily fee of
    U.S.$82.50 for the storage and loading of stabilized petroleum
    by means of a floating system (FSO). At
    December 31, 2007 and 2006, the outstanding balances were
    Ps. 242,888 and Ps. 531,296, respectively.(3)
    
    PEMEX has Financed Public Works
    Contracts (FPWC) (formerly known as Multiple
    Services Contracts or MSCs) pursuant to which the
    hydrocarbons and construction in progress are property of PEMEX.
    Pursuant to the FPWC, the contractors manage the work in
    progress, classified as development, infrastructure and
    maintenance. As of December 31, 2007 and 2006, PEMEX has an
    outstanding payable amount of Ps. 3,228,735 and Ps. 2,035,618,
    respectively.(4)
    
    During 2007, a Floating Production
    Storage and Offloading (FPSO) vessel was purchased.
    The investment in the vessel totaled U.S.$723,575, of which
    U.S.$352,996 were paid in 2007 and the remaining amount of
    U.S.$370,579 (Ps.4,026,772) as of December 31, 2007, will
    be paid over a period of 15 years.  NOTE 11 
    FINANCIAL
    INSTRUMENTS:            (i)
    Counterparty
    risk from the use of derivative financial instruments   F-25




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
      (ii)
    Interest
    rate risk management      (iii)
    Exchange
    rate risk management      (iv)
    Commodity
    price risk management          (v)
    Fair
    value of derivative financial instruments   F-26




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  
    The fair value for interest rate, exchange rate and hydrocarbon
    derivative instruments is determined by discounting future cash
    flows as of the balance sheet date, using market quotations for
    the instruments remaining life.
    Prices for options are calculated using standard option-pricing
    models commonly used in the international financial market.
    Exchange-traded energy futures contracts are valued individually
    at daily settlement prices quoted on the futures markets.  (vi)
    Embedded
    derivatives    (vii)
    Operations
    with derivative financial instruments           F-27




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    2007


2006Notional Value


Fair Value


Notional Value


Fair ValueInterest rate swaps:Pay fixed/receive variable

Ps.
14,211,489


(Ps.
1,267,432
)

Ps.
17,741,995


(Ps.
1,877,925
)Cross-currency swaps:Pay Mexican Peso/receive UDI

Ps.
11,901,650


Ps.
221,101


Ps.



Ps.
            F-28




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    2007


2006Notional Value


Fair Value


Notional Value


Fair ValueInterest rate swaps pay fixed/receive variable

Ps.
5,000,000


(Ps.
185,719
)

Ps.
5,187,950


(Ps.
381,586
)Cross-currency swaps:Pay U.S. Dollar/receive Euros


44,730,188



3,549,308



59,713,915



1,796,741Pay U.S. Dollar/receive Japanese Yen


13,549,835



(355,956
)


13,310,235



(968,825
)Pay U.S. Dollar/receive Ponds Sterling


7,417,159



1,120,775



7,706,453



1,294,656Natural gas swaps:Pay fixed/receive variable

Ps.
5,163,787


Ps.
202


Ps.
5,683,033


Ps.
11,916,029Pay variable/receive fixed


5,185,476



16,882



6,668,063



(11,883,888
)Pay variable/receive variable


472



470



2,493



(3,747
)Natural gas options:PutPurchase





Ps.
73,261






Ps.
31,953Sale






(74,064
)






384CallPurchase






361,510







117,280Sale






(361,300
)






(116,576
)          F-29




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    2007


2006Carrying Value


Fair Value


Carrying Value


Fair ValueAssets:Cash and cash equivalents

Ps.
170,997,240


Ps.
170,997,240


Ps.
195,776,457


Ps.
195,776,457Accounts receivable, notes and other


151,510,543



151,510,543



137,163,105



137,163,105Derivative financial instruments


12,909,868



12,909,868



4,389,836



4,389,836Liabilities:Suppliers


35,138,344



35,138,344



37,102,983



37,102,983Accounts and accumulated expenses payable


18,097,530



18,097,530



14,592,081



14,592,081Taxes payable


146,593,355



146,593,355



45,006,644



45,006,644Derivative financial instruments


13,584,495



13,584,495



13,372,143



13,372,143Current portion of long-term debt


76,050,128



76,050,128



66,240,278



66,240,278Long-term debt


424,828,472



442,731,344



524,475,242



556,153,282         NOTE 12 
    LABOR
    OBLIGATIONS:  Ley Federal del Trabajo
     F-30




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  Cash
    Flow:
    Retirement remunerations, seniority premiums, pension and
    indemnity


Other post-retirement Benefits2007


2006


2007


2006Contribution to the pension plan assets

Ps.
19,357,177


Ps.
13,221,734


Ps.
5,750,386


Ps.
5,207,690Payments charged to the plan assets


13,449,831



11,839,880



5,750,386



5,207,690         Retirement remunerations, senioritypremiums, pension and indemnity


Other post-retirement benefits2007


2006


2005


2007


2006


2005Net periodic cost:Service cost

Ps.
9,167,594


Ps.
7,507,356


Ps.
6,513,609


Ps.
6,405,902


Ps.
5,881,745


Ps.
4,163,849Financial cost


27,246,555



24,571,208



20,983,951



21,795,906



18,562,492



15,479,140Return on plan assets


(26,007
)


(51,860
)


(185,989
)






Amortization of prior services cost and plan amendments


677,353



663,036



364,519



4,483,931



4,447,357



4,478,314Variances in assumptions and experience adjustments


1,319,028



671,355



(168,555
)


(1,352,970
)


(3,131,317
)


(3,811,680
)Amortization of transition liability


6,133,654



6,114,252



6,157,546



6,407,047



6,357,929



6,402,163Inflation adjustment


1,650,858



1,598,629



1,118,730



1,398,004



1,301,166



889,879Total periodic cost


46,169,035



41,073,976



34,783,811



39,137,820



33,419,372



27,601,665Recognition of severance payments










1,402,142











Net periodic cost

Ps.
46,169,035


Ps.
41,073,976


Ps.
36,185,953


Ps.
39,137,820


Ps.
33,419,372


Ps.
27,601,665  F-31




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    Retirement remunerations, senioritypremiums, pension and indemnity


Other post-retirement benefits2007


2006


2007


2006Vested benefit obligation value:Vested benefit obligation

Ps.
206,364,293


Ps.
191,557,538


Ps.



Ps.
Accumulated benefit obligation (ABO)/ obligation

Ps.
357,768,687


Ps.
330,616,544


Ps.



Ps.
Projected benefit obligation (PBO)/

Ps.
367,485,744


Ps.
336,758,891


Ps.
300,396,198



266,481,493Plan assets at fair value


(7,664,407
)


(2,118,402
)






Projected benefit obligation over plan assets


359,821,337



334,640,489



300,396,198



266,481,493Items to be amortized:Prior services cost and plan amendments


(6,449,919
)


(7,080,185
)


(58,102,534
)


(62,590,753
)Variances in assumptions and experience adjustments


(54,196,339
)


(49,016,755
)


743,034



14,811,311Unamortized transition liability


(66,631,947
)


(72,807,858
)


(71,146,932
)


(77,594,439
)Project liability net


232,543,132



205,735,691



171,889,766



141,107,612Additional liability


123,768,374



124,821,880







Total liability

Ps.
356,311,506


Ps.
330,557,571


Ps.
171,889,766


Ps.
141,107,612     Retirement remunerations, seniority premiums,pension and indemnity

Other post-retirement benefits2007

2006

2007

2006Discount rate

4.25%

4.25%

4.25%

4.25%Rate of compensation increase

0.50%

0.50%

0.50%

0.50%Expected long term rate of the return on plan assets

4.25%

4.25%



Employees average remaining labor life over which pending
    amortization items are amortized

11 years

12 years

11 years

12 years   Plan
    assets
  Fondo Laboral
    Pemex Fideicomiso de Cobertura
    Laboral y de Vivienda
 F-32




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    Retirement remunerations,seniority premiums,pension and indemnity


Other post-retirement benefitsType of Investment

2007


2006


2007


2006Governmental securities


84.2
%


71.0
%


84.2
%


71.0
%Fixed rate securities


15.8
%


29.0
%


15.8
%


29.0
%Total


100.0
%


100.0
%


100.0
%


100.0
%   NOTE 13 
    COMPREHENSIVE
    (LOSS) INCOME:    2007


2006


2005Net (loss) income

(Ps.
18,307,569
)

Ps.
46,953,205


(Ps.
82,357,982
)Surplus in restatement of equity


18,638,402



4,064,648



8,184,288Derivative financial instruments


656,699



5,274,109



(7,036,437
)Effect on equity from labor obligations


(3,432,792
)


(18,871,922
)


(21,672,659
)Other






710,094



Comprehensive (loss) income for the year

(Ps.
2,445,260
)

Ps.
38,130,134


(Ps.
102,882,790
)   NOTE 14 
    EQUITY:    AmountCertificates of Contribution A (nominal value)

Ps.
10,222,463Inflation restatement increase


86,735,530Certificates of Contribution A in Mexican pesos of
    December 31, 2007 purchasing power

Ps.
96,957,993    F-33




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    i.e
      Fondo sobre Ingresos Excedentes Ley de
    Presupuesto y Responsabilidad Hacendaria,
  Ley de
    Ingresos de la Federación
  NOTE 15 
    COMMITMENTS:     F-34




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    2008

U.S. $
25,2672009


25,2672010


25,2672011


25,2672012


25,2672013 and thereafter


244,244Total

U.S. $
370,579   b.
    PEMEX has entered into a nitrogen supply contract for the
    pressure maintenance program at the Cantarell field. During
    2007, an additional contract was incorporated, also with the
    purpose of supplying nitrogen to the Ku-Maloob-Zap field,
    extending the original contract until 2027. At December 31,
    2007 and 2006, the value of the nitrogen to be supplied during
    the term of the contract was approximately Ps. 18,314,382
    and Ps. 13,377,497, respectively. In the event of the
    annulment of the contract and depending on the circumstances,
    PEMEX has the right and obligation to acquiring the
    vendors nitrogen plant, under the terms of the contract.    2008

Ps.
1,969,8052009


1,695,8362010


1,717,4182011


1,721,8662012


1,742,658More than 5 years


9,466,799Total

Ps.
18,314,382   c.
    During 2003, 2004 and 2005, PEMEX entered into Financed Public
    Work Contracts (FPWCs) (formerly known as Multiple
    Services Contracts or MSCs). In connection with
    these contracts, the contractor, at its own cost, has to
    administer and support the execution of the works in connection
    with the FPWCs, which are classified into categories of
    development, infrastructure and maintenance. The estimated value
    of the FPWCs as of December 31, is as follows:  Date of Contract

Block

2007


2006February 9, 2004

Olmos

U.S. $
343,574


U.S. $
343,574November 21, 2003

Cuervito


260,072



260,072November 28, 2003

Misión


1,035,580



1,035,580November 14, 2003

Reynosa-Monterrey


2,437,196



2,437,196December 8, 2003

Fronterizo


264,977



264,977December 9, 2004

Pandura-Anáhuac


900,392



900,392March 23, 2005

Pirineo


645,295



645,295April 3, 2007

Nejo


911,509



April 20, 2007

Monclava


433,501



Total



U.S. $
7,232,096


U.S. $
5,887,086  F-35




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  d.
    PEMEX, through PMI, enters into sale contracts for crude oil
    with foreign companies in international markets. The terms and
    conditions of these contracts are specific to each customer, and
    the contract durations vary, including evergreen contracts and
    long term contracts.  NOTE 16 
    CONTINGENCIES:    (a)
    PEMEX is subject to the provisions of the Ley General del
    Equilibrio Ecológico y la Protección al Ambiente(General Law on Ecological Equilibrium and
    Environmental Protection). To comply with this law,
    environmental audits of PEMEXs larger operating, storage
    and transportation facilities have been or are being conducted.
    Following the completion of such audits, PEMEX has signed
    various agreements with the Procuraduría Federal de
    Protección al Ambiente (Federal Attorney of
    Environmental Protection, or PROFEPA) to implement
    environmental remediation and improve environmental plans. Such
    plans contemplate remediation for environmental damages, as well
    as related investments for the improvement of equipment,
    maintenance, labor and materials.    (b)
    As of December 31, 2007, PEMEX was involved in various
    civil, commercial, tax, criminal, administrative, labor and
    arbitration lawsuits. Based on the information available, the
    amount claimed in connection with these lawsuits totaled
    approximately Ps. 39,209,855. At December 31, 2007,
    PEMEX had accrued a reserve of Ps. 10,453,830 for these
    contingent liabilities. Among these lawsuits, are the following:  i.
    Pemex-Refining is a party to an arbitration proceeding
    (No. 11760/KGA) filed by CONPROCA, S.A. de C.V.
    (CONPROCA) before the International Chamber of
    Commerce, in which CONPROCA is seeking payment of U.S.$633,100
    related to construction and maintenance services in the
    Cadereyta refinery. Pemex-Refining filed a counterclaim against
    CONPROCA in the amount of U.S.$907,000 (which includes the value
    added tax).    ii.
    In April 2004, Construcciones Industriales del Golfo, S.A. de
    C.V. filed a civil claim against Pemex-Exploration and
    Production, (exp. 40/2004-VII), for a total amount of
    Ps. 15,237 plus U.S.$219,584 for the removal of deposits in
    the Salamanca refinery. On September 28, 2007, a judgment
    was issued in favor of Pemex-Exploration and Production. The
    plaintiff filed an appeal against this judgment, which was
    denied on January 21, 2008. The plaintiff then filed a
    constitutional relief known as amparo, which is still
    pending. F-36




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
   iii.
    In December 2003, Unión de Sistemas Industriales, S. A.
    filed a civil claim against Pemex-Refining (exp. 202/2003),
    seeking Ps. 393,095. The trial is in the evidentiary
    stages; expert evidence is still pending.iv.
    In December 2004, Corporación Mexicana de Mantenimiento
    Integral S. de R. L. de C. V. (COMMISA) filed an
    arbitration claim before the International Court of Arbitration
    of the International Chamber of Commerce (the ICA)
    against Pemex-Exploration and Production (IPC-01) for breach of
    a construction agreement in connection with two platforms in the
    Cantarell complex.      v.
    An arbitration proceeding before the ICA was filed by COMBISA,
    S. de R. L. de C. V. (COMBISA) against
    Pemex-Exploration and Production (IPC-22) seeking U.S.$235,770
    for the alleged breach of a construction agreement in connection
    with three platforms in the Cantarell complex. Pemex-Exploration
    and Production responded to the claim and filed a counterclaim
    against COMBISA. On July 23, 2007, a final award was
    granted, pursuant to which COMBISA was ordered to pay U.S.$4,600
    and Pemex-Exploration and Production was ordered to pay
    U.S.$61,300 as well as financial expenses and the corresponding
    value added tax. Both parties requested an additional decision
    to clarify this final award on November 16, 2007. The FCA
    modified the award such that total amount owed to COMBISA was
    corrected and Pemex-Exploration and Production was ordered to
    pay U.S.$61,600 as well as financial expenses and the
    corresponding value added tax. The total amount owed to
    Pemex-Exploration and Production was ratified.    vi.
    COMMISA filed a claim before the ICA against Pemex-Exploration
    and Production (IPC-28) seeking approximately U.S.$142,400 and
    Ps. 40,199 for, among other things, the alleged breach of a
    contract (PEP-O-IT-136/08) related to two vessels, the Bar
    Protector and Castoro 10, both of which are located in the
    Cantarell complex. Pemex-Exploration and Production filed a
    counterclaim. On February 11, 2008, Pemex-Exploration and
    Production was notified of an award pursuant which
    Pemex-Exploration and Production was ordered to pay
    Ps. 10,928 and U.S.$75,075, plus the value added tax and
    U.S.$200 related to arbitration expenses. F-37




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    vii.
    A civil claim was filed by Asociación de Transportistas al
    Servicio de Petróleos Mexicanos Clientes o Empresas
    Sustitutos, A. C. against Pemex-Refining (exp. 262/2005-II)
    seeking approximately Ps. 1,647,629 for damages in
    connection with the alleged breach of a tank truck
    transportation agreement. On March 7, 2008 a final hearing
    was held in which both parites filed their allegations. A final
    judgement is still pending.  viii.
    A civil claim was filed by Asociación de Transportistas al
    Servicio de Petróleos Mexicanos, Clientes o Empresas
    Sustitutos, A. C. against Pemex-Refining (exp. 271/2005-I)
    asserting that Pemex-Refining should authorize the plaintiff to
    replace tank trucks older than ten years in accordance with the
    tank truck transportation agreement mentioned in paragraph vii
    above. On January 23, 2008, a final hearing was held in
    which both parites filed their allegations. A final judgement is
    still pending.ix.
    A civil claim was filed by Asociación de Transportistas al
    Servicio de Petróleos Mexicanos, Clientes o Empresas
    Sustitutos, A. C. against Pemex-Refining, (295/2007), seeking a
    judicial judgment declaring the breach of a services agreement
    dated March 26, 1993 and damages, among other expenses.  amparo Juzgado
    Quinto de Distrito en Materia Civil
  x.
    A request for Constitutional relief known as an amparowas filed by Minera Carbonífera Río Escondido,
    S.A. de C.V. and Minerales Monclova, S.A. de C.V. for alleged
    violation of its mining concesions and for the excecution of
    development, infrastructure and manteinance works in
    non-associated gas fields under a public works contract
    (No. 414105826) and a modification of the Ley
    Reglamentaria del Artículo 27 Constitucional en el Ramo del
    Petróleo(Regulatory Law to Article 27 of
    the Political Constitution Concerning Petroleum Affairs).
    The purpose of this contract was to explore non-associated gas
    in the same fields where the plaintiffs have their mining
    concessions.    xi.
    An arbitration proceeding before the ICA was filed by Tejas Gas
    de Toluca, S. de R.L. de C.V. against Gas Natural México
    S.A. de C.V. (GNM) and Pemex-Gas and Basic
    Petrochemicals seeking, among other things, compliance with a
    transportation agreement and its amendments as agreed in
    February, 2001 and November, 2001. This agreement was executed
    for the operation of the Palmillas-Toluca pipeline. F-38




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    xii.
    In connection with the claims filed by a group of Congressmen
    from the LIXth Legislature against Pemex-Exploration and
    Production related to the Financed Public Works Contracts
    program (FPWC), as of the date of these financial
    statemets only one claim remains open since Pemex-Exploration
    and Production obtained a favorable judgement in the other
    similar claims filed by these plaintiffs.  Juzgado
    Noveno de Distrito en Materia Civil del Distrito Federal
  xiii.
    In August 2007, a civil claim (12/2007) was filed by Leoba Rueda
    Nava against Petróleos Mexicanos and Pemex-Refining. This
    claim was presented to the Juzgado Decimocuarto de Distrito
    del Décimo Circuito(Fourteenth District Court of
    the Tenth Circuit) in Coatzacoalcos, Veracruz. Plainiffs
    seek, among other things, civil liability and damages resulting
    from the pollution of land used to store oil waste in accordance
    with an agreement entered into by and among Leoba Rueda Nava,
    Petróleos Mexicanos and Pemex-Refining. The trial is in the
    evidenciary stage. Judicial inspection, confesional and
    testimonial evidences have been filed. As of the date of these
    financial statemets expert opinions are still pending.  xiv.
    Administrative proceedings were initiated by the Federal
    Competition Commission (the Commission). On
    December 7, 2007, the Commission issued a resolution
    prohibiting Pemex-Refining from engaging in anti-competitive
    practices in trading and distributing greases and lubricants in
    service stations, without specifically requesting a modification
    or termination of a license agreement. Pemex-Refining filed an
    amparoagainst this resolution, which is still pending.  amparos
  xv.
    Several claims have been filed by Impulsora Jalisciense, S. A.
    de C. V. and Mexicana de Lubricantes, S. A. de C. V.  amparo Juzgado Quinto de Distrito en
    Materia Administrativa
 F-39




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    amparos
  xvi.
    A civil claim (28/2007) was filed by Mexicana de Lubricantes, S.
    A. de C. V. against Pemex-Refining seeking, among other things,
    a judicial judgment declaring null and void any advance
    termination or cancellation of the following agreements executed
    between Mexicana de Lubricantes, S. A. de C. V. and
    Pemex-Refining: 1) License and Trademark contract;
    2) Basic greases supply contract; and 3) Manufacture
    contract of lubricants and greases for Petróleos Mexicanos
    and the Subsidiary Entities. The claim was summoned and
    Pemex-Refining was required to file its response in April.    NOTE 17 
    SEGMENT
    FINANCIAL INFORMATION:      
    Pemex-Exploration and Production earns revenues from domestic
    crude oil sales, as well as from the export of crude oil,
    through PMI Group, to international markets. Export sales are
    made through PMI Group to approximately 25 major customers in
    various foreign markets. Less than half of PEMEX crude oil is
    sold domestically; however, these amounts are in large part
    sufficient to satisfy Mexican domestic demand.
    Pemex-Refining earns revenues from sales of refined petroleum
    products and derivatives. Most of Pemex-Refinings sales
    are to third parties and occur within the domestic market. The
    entity supplies the Comisión Federal de Electricidad(CFE) with a significant portion of its fuel oil
    production. Pemex-Refinings most important products are
    different types of gasoline.
    Pemex-Gas and Basic Petrochemicals earns revenues primarily from
    domestic sources. Pemex-Gas and Basic Petrochemicals also
    consumes high levels of its own natural gas production. Most
    revenues of this entity are obtained from the sale of ethane and
    butane gas.
    Pemex-Petrochemical is engaged in the sale of petrochemical
    products to the domestic market. Pemex-Petrochemicals offers a
    wide range of products that generate large revenues, the
    majority of which come from methane derivatives, ethane
    derivatives and aromatics and derivatives.     F-40




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    Corporate andExploration and





Gas and Basic





Subsidiary


IntersegmentProduction


Refining


Petrochemicals


Petrochemicals


Companies


Eliminations


TotalYear ended December 31, 2007Sales Trade

Ps.
-


Ps.
430,382,930


Ps.
139,963,302


Ps.
21,701,729


Ps.
542,926,858


Ps.
-


Ps.
1,134,974,819Intersegment


912,295,482



42,229,528



82,940,711



35,942,074



247,993,773



(1,321,401,568
)


Services income


















1,880,032



(819,423
)


1,060,609Total net sales


912,295,482



472,612,458



222,904,013



57,643,803



792,800,663



(1,322,220,991
)


1,136,035,428Gross income


740,811,644



(81,024,508
)


15,816,747



(6,559,693
)


41,180,144



(34,854,648
)


675,369,686Operating income (loss)


707,401,828



(114,306,785
)


7,335,910



(14,115,424
)


5,850,043



(1,734,890
)


590,430,682Comprehensive financing cost


(25,561,647
)


(5,764,552
)


1,071,281



(1,181,167
)


10,097,224



1,292,274



(20,046,587
)Net income (loss)


19,966,387



(45,653,619
)


4,958,173



(16,085,945
)


(11,473,248
)


29,980,683



(18,307,569
)Depreciation and amortization


57,262,960



10,159,674



3,437,370



1,091,848



639,866







72,591,718Labor cost reserve


29,124,816



28,579,131



6,491,464



8,215,002



12,896,453







85,306,866Taxes and duties


663,549,438



3,846,738



5,537,391



257,203



4,064,958







677,255,728Acquisition of fixed assets


99,252,970



22,912,301



5,871,320



998,725



324,582







129,359,898Total assets


1,237,968,403



417,393,498



133,970,702



79,872,062



2,331,376,672



(2,870,300,731
)


1,330,280,606Current assets


630,760,334



229,536,695



85,311,492



58,650,943



495,164,854



(1,070,863,531
)


428,560,787Investments in shares


342,538



157,094



1,095,666







612,696,004



(581,227,948
)


33,063,354Fixed assets


565,433,958



162,585,821



42,005,574



15,569,956



8,250,144







793,845,453Current liabilities


191,867,210



148,709,748



33,463,623



8,896,698



929,478,616



(1,022,952,043
)


289,463,852Labor reserve


180,931,471



178,386,606



40,791,915



49,058,100



79,033,180







528,201,272Total liability


998,713,758



377,308,387



85,452,634



59,275,500



2,262,119,197



(2,502,496,731
)


1,280,372,745Equity


239,254,644



40,085,112



48,518,068



20,596,562



69,257,475



(367,804,000
)


49,907,861Year ended December 31, 2006Sales Trade

Ps.
-


Ps.
406,963,236


Ps.
138,687,862


Ps.
21,638,776


Ps.
535,144,047


Ps.
-


Ps.
1,102,433,921Intersegment


890,012,141



46,242,429



83,058,212



9,654,394



171,981,054



(1,200,948,230
)


Services income


















1,707,386



(631,439
)


1,075,947Total net sales


890,012,141



453,205,665



221,746,074



31,293,170



708,832,487



(1,201,579,669
)


1,103,509,868Gross income


718,463,139



(52,193,884
)


18,030,329



(4,925,440
)


31,717,998



(25,840,484
)


685,251,658Operating income (loss)


690,607,335



(82,910,431
)


10,720,768



(11,854,541
)


(1,720,065
)


(565,837
)


604,277,229Comprehensive financing cost


(24,174,018
)


(9,026,219
)


1,134,603



(4,173,330
)


12,659,001



(266,662
)


(23,846,625
)Net income (loss)


75,888,386



(35,325,390
)


6,311,661



(18,029,704
)


54,656,089



(36,547,837
)


46,953,205Depreciation and amortization


51,819,623



8,723,393



3,529,726



902,845



696,602







65,672,189Labor cost reserve


25,562,500



24,775,200



5,637,100



6,972,400



11,546,149







74,493,349Taxes and duties


591,866,238



3,165,413



4,703,707



394,529



4,634,622







604,764,509Acquisition of fixed assets


61,906,641



13,231,096



5,132,529



1,712,598



15,667,903







97,650,767Total assets


1,096,349,650



356,909,402



133,753,202



72,279,723



2,038,713,342



(2,447,984,895
)


1,250,020,424Current assets


533,417,998



173,292,736



84,553,543



50,300,628



457,242,716



(899,414,425
)


399,393,196Investments in shares


330,752



157,094



1,967,913







491,078,954



(460,773,767
)


32,760,946Fixed assets


514,467,528



156,937,920



41,253,162



15,908,016



8,628,831







737,195,457Current liabilities


84,578,731



113,869,248



38,595,497



11,677,253



787,977,256



(860,383,856
)


176,314,129Labor reserve


162,516,165



160,501,772



36,305,067



43,602,148



68,740,031







471,665,183Total liability


805,563,141



322,204,631



84,445,277



55,768,854



1,984,483,183



(2,043,900,288
)


1,208,564,798Equity


290,786,509



34,704,770



49,307,958



16,510,869



54,230,161



(404,084,641
)


41,455,626Year ended December 31, 2005Sales Trade

Ps.
-


Ps.
381,355,382


Ps.
144,987,328


Ps.
21,826,900


Ps.
454,436,655


Ps.
-


Ps.
1,002,606,265Intersegment


773,336,701



41,307,675



89,170,404



9,518,438



131,997,076



(1,045,330,294
)


Services income


















1,875,001



(650,193
)


1,224,808Total net sales


773,336,701



422,663,057



234,157,732



31,345,338



588,308,732



(1,045,980,487
)


1,003,831,073Gross income


594,226,368



3,088,433



20,740,515



(5,601,679
)


7,885,280



(6,451,743
)


613,887,174Operating income (loss)


567,556,903



(28,902,246
)


10,678,648



(9,781,605
)


(20,166,208
)


20,317,888



539,703,380Comprehensive financing cost


8,683,177



(3,859,422
)


2,598,710



(3,550,361
)


(13,145,650
)


4,437,455



(4,836,091
)Net income (loss)


(19,701,797
)


(57,508,914
)


7,213,898



(17,851,654
)


(76,533,529
)


82,024,014



(82,357,982
)Depreciation and amortization


42,648,709



8,662,918



3,857,966



1,075,044



750,720







56,995,357Labor cost reserve


22,739,043



21,067,212



4,782,355



5,742,055



9,336,373







63,667,038Taxes and duties


595,838,203



24,443,717



2,412,419



262,157



3,917,966







626,874,462Acquisition of fixed assets


29,498,613



6,537,813



1,936,748



2,511,707



43,829,686







84,314,567Total assets


910,762,474



320,419,181



104,721,683



55,842,991



1,624,736,468



(1,890,886,536
)


1,125,596,261Current assets


379,304,272



138,951,636



56,041,394



33,282,845



429,691,461



(721,191,173
)


316,080,435Investments in shares


227,313



157,094



1,276,801







231,359,791



(204,339,923
)


28,681,076Fixed assets


475,493,308



152,858,631



40,924,037



15,850,726



9,340,494







694,467,196Current liabilities


123,657,961



114,490,526



21,971,433



53,748,694



554,475,788



(690,761,619
)


177,582,783Labor reserve


142,000,010



137,607,036



30,508,286



36,672,374



58,796,102







405,583,808Total liability


747,717,710



303,672,915



59,003,711



90,957,975



1,639,794,045



(1,686,540,129
)


1,154,606,227Equity


163,044,885



16,746,308



45,717,987



(35,114,975
)


(15,057,361
)


(204,346,661
)


(29,009,817
)  F-41




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  NOTE 18 
    FISCAL
    REGIME:    Ley Federal de Derechos
  a. The Ordinary Hydrocarbons Duty
    b. Hydrocarbon Duty for the Oil Revenues Stabilization
    Fund
  c. Extraordinary Duty on Crude Oil
    Exports
  d. Excess Gains Renevue Duty
  e. Duty for the Fund for Scientific and Technological
    Research on Energy Instituto Mexicano del Petróleo Presupuesto de Egresos de la
  f. Duty for the Fiscal Monitoring of Oil
    Activities Auditoria Superior de la Federación
  g. Additional Duty
  h. Special Tax on Production and
    Services
 F-42




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
      i. Hydrocarbon Income Tax
    (IRP)
    2007


2006Current IRP

Ps.
4,070,364


Ps.
3,705,184Deferred IRP


1,867,292



1,031,6195,937,656



4,736,803Inflation effect


92,711



178,056Total IRP

Ps.
6,030,367


Ps.
4,914,859       2007


2006Deferred asset IRP:Advance from customers

Ps.
491,424


Ps.
518,388Provision for insurance


94,892



115,176Provision for contingencies


19,918



11,831Environmental reserve


63,508



85,255Allowance for uncollectible


8,899



9,870678,641



740,520Deferred liability IRP:Advance insurance


(2,692
)


(7,314
)Properties, plants and properties


(5,552,588
)


(3,855,675
)(5,555,280
)


(3,862,989
)Long term liability

(Ps.
4,876,639
)

(Ps.
3,122,469
)  F-43




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  j. Value Added Tax
  k. Income and Assets Taxes
    2007


2006


2005Current income tax

Ps.
3,253,655


Ps.
4,771,281


Ps.
3,487,273Deferred income tax


(27,414
)


(166,237
)


494,405Ps.
3,226,241


Ps.
4,605,044


Ps.
3,981,678     2007


2006Deferred asset income taxes:Losses of prior years

Ps.
653


Ps.
8,359Deferred liability income taxes:Properties, plants and equipment


(1,535,911
)


(1,483,062
)Long term liability

(Ps.
1,535,258
)

(Ps.
1,474,703
)     NOTE 19 
    NEW
    ACCOUNTING PRONOUNCEMENTS    (a)
    FRS B-10 Effects of
    inflation  FRS B-10 supersedes
    Bulletin B-10
    and its five amendments, as well as the related circulars and
    INIF. The principal guidelines established by this FRS are:
    (i) The use of unidades de inversión(UDIs) to determine the inflation for a given
    period; (ii) the elimination of inventory replacement costs
    as well as specific indexation for fixed assets, (iii) the
    requirement to recognize the effects of inflation only when
    operating in an inflationary economic environment (accumulated
    inflation equal to or higher than 26% in the most recent
    three-year period); and (iv) reclassification of the
    accounts of gain or loss from holding non-monetary assets
    (RETANM), monetary position gains or losses
    (REPOMO), and deficit/excess in equity restatement,
    to retained earnings, when the unrealized portion is not
    identified.    (b)
    FRS D-3 Employee benefits 
    FRS supersedes
    Bulletin D-3,
    the portion applicable to Employee Statutory Profit Sharing
    (ESPS) of
    Bulletin D-4
    and INIF The principal guidelines F-44




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  established by this FRS are: (i) a maximum of five years
    for amortizing unrecognized/unamortized items, with the option
    to recognize immediately actuarial gains or losses in results of
    operations; (ii) the elimination of the recognition of an
    additional liability and related intangible asset and any
    related item as a separate element of equity; (iii) the
    inclusion severance benefits in results of operations; and
    (iv) the presentation of ESPS, including deferred ESPS, in
    the statement of income as ordinary operations. Additionally,
    FRS D-3 establishes that the asset and liability method required
    by FRS D-4 should be used for determining deferred ESPS, and
    that any effects arising from the change are to be recognized in
    retained earnings, with no restatement of prior years
    financial statements.    (c)
    FRS D-4 Tax on earnings 
    FRS supersedes
    Bulletin D-4
    and Circulars 53 and 54. The principal guidelines established by
    this FRS are: (i) the reclassification of the cumulative
    income taxes effects resulting from the initial adoption of
    Bulletin D-4
    in 2000 to retained earnings; (ii) the recognition of the
    Impuesto al Activo(IMPAC) as a tax credit
    (benefit), rather than as a tax prepayment; and (iii) the
    transfer of accounting treatment of ESPS incurred and deferred
    to FRS D-3, as discussed in paragraph (b) above.    (d)
    FRS B-2 Statement of cash
    flows  FRS supersedes
    Bulletin B-12
    and paragraph 33 of
    Bulletin B-16.
    The principal guidelines established by this FRS are:
    (i) the replacement of the statement of changes in
    financial position with the statement of cash flows;
    (ii) the reporting of cash inflows and cash outflows in
    nominal currency units i.e.the effects of inflation are
    not included; (iii) the establishment of two alternative
    preparation methods (direct and indirect), without stating
    preference for either method. In addition, cash flows from
    operating activities are to be reported first, followed by cash
    flows from investing activities and finally, cash flows from
    financing activities; (iv) the reporting of captions of
    principal items as gross; and (v) the requirement of
    disclosure of the composition of those items considered cash
    equivalents.  (e)
    FRS B-15 Translation of foreign
    currencies  FRS B-15 supersedes
    Bulletin B-15.
    The principal guidelines established by this FRS are:
    (i) the substitution of the integrated foreign operation
    and foreign entity concepts for determining recording currency,
    functional currency and reporting currency, requiring that
    translation be made based on the economic environment in which
    the entity operates, regardless of its dependency on the holding
    company; and (ii) the inclusion of translation procedures
    for those instances where the reporting currency is different
    from the functional currency.  NOTE 20 
    SUBSEQUENT
    EVENTS:       F-45




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    
    A new Organic Law for Petróleos Mexicanos.
    Modifications to the Organic Law of the Public Federal
    Administration.
    Creation of an oil commission, which would be decentralized
    entity under the Secretaría de Energía(Energy
    Ministry or SENER), with technical and operative
    autonomy.
    Extensive modifications to the Ley Reglamentaria,
    (Regulatory Law).
    Extensive modifications to the Ley de la Comisión
    Reguladora de Energía(Law of the Regulatory
    Commission of Energy).  NOTE 21DIFFERENCES
    BETWEEN MEXICAN FRS AND U.S. GAAP
  Bulletin B-10, Bulletin B-10
 F-46




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    2007


2006


2005Net (loss) income for the year under Mexican FRS

(Ps.
18,307,569
)


Ps. 46,953,205



(Ps. 82,357,982
)U.S. GAAP adjustments:Exploration and drilling costs, net (a)


(1,370,873
)


(1,498,801
)


(1,549,819
)Pensions and seniority premiums (b)


2,328,436



1,939,725



1,012,457Post-retirement benefits (c)


4,025,557



5,042,554



3,375,220Accrued vacation (d)


(45,809
)


(20,549
)


(16,712
)Fixed asset adjustments:Capitalized gains (losses) of derivative financial instruments,
    net (e)


(177,334
)


3,928,429



(8,445,996
)Capitalization of interest, net (f)


3,509,960



2,794,394



1,928,272Impairment, net (g)


3,344,517



3,978,566



6,246,987Depreciation convention (h)


783,144



783,144



783,144Derivative financial instruments (i)


(8,149,706
)


74,673



1,030,873Profit in inventory (j)


(18,919,219
)


(4,156,613
)


(2,776,119
)Available-for-sale investment securities (l)


246,258



(2,995,342
)


(830,179
)Effects of inflation accounting on U.S. GAAP adjustments (m)


159,139



28,627



206,880Deferred income taxes (n)


(62,488
)


(74,777
)


442,668Reclassification of Pemex Finance net income to minority
    interest (o)


(6,089
)


(54,789
)


1,159,233Total U.S. GAAP adjustments, net


(14,334,507
)


9,769,241



2,566,909Net (loss) income for the year under U.S. GAAP

(Ps.
32,642,076
)


Ps. 56,722,446



(Ps. 79,791,073
)Comprehensive (loss) income under U.S. GAAP:Net (loss) income for the year under U.S. GAAP

(Ps.
32,642,076
)


Ps. 56,722,446



(Ps. 79,791,073
)Other comprehensive (loss) income:Additional minimum pension
    liability(b)(1)


(3,793,689
)


(20,311,938
)


(19,692,549
)Derivative financial instruments (i)


656,699



5,274,109



(4,930,806
)Unrealized gains on available-for-sale investment
    securities (l)


(246,258
)


2,995,342



830,179Surplus in restatement of equity


18,539,917



4,108,268



5,571,542Other






710,094



Comprehensive (loss)
    income

(Ps.
17,485,407
)


Ps. 49,498,321



(Ps. 98,012,707
)     (1)
    
    This line item previously reported
the amount of (Ps. 168,399,229), which included
    the amount related to recognition of the initial effect of
    SFAS 158 in 2007 of Ps. 164,605,540. PEMEX corrected
this amount by removing it from Other comprehensive (loss)
incomeAdditional minimum pension liability and presenting it as
a direct entry to Accumulated other
    comprehensive loss.  F-47




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  2007


2006Components of accumulated other comprehensive (loss) income at
    December 31:Derivative financial instruments (i)


(Ps.  1,105,629
)


(Ps.  1,762,328
)Additional minimum pension
    liability (b)(1)


(46,693,813
)


(42,900,124
)Recognition of initial effect of
    SFAS 158 (b)(1)


(164,605,540
)


Unrealized gains on available-for-sale investment
    securities (l)


12,716,759



12,963,017Surplus in restatement of equity


175,864,184



157,324,267Other


710,094



710,094Accumulated other comprehensive (loss) income


(Ps. 23,113,945
)


Ps. 126,334,926   2007


2006Equity is reconciled as follows:Equity under Mexican FRS


Ps.   49,907,861



Ps.  41,455,626U.S. GAAP adjustments:Exploration and drilling costs (a)


12,518,420



13,889,293Pensions and seniority premiums:Pensions and seniority premiums (b)


(5,546,942
)


(7,875,378
)Additional minimum pension liability (b)


(67,715,653
)


5,426,624Post-retirement benefits:Post-retirement benefits (c)


(34,187,352
)


(38,212,908
)Effect in equity of labor obligation (c)


(91,824,161
)


Accrued vacation (d)


(636,092
)


(590,283
)Fixed asset adjustments:Capitalized gains of hedging financial instruments, net (e)


2,883,974



3,061,308Capitalization of interest, net (f)


(4,782,607
)


(8,292,567
)Impairment, net (g)


(26,564,246
)


(29,908,763
)Depreciation convention (h)






(783,144
)Derivative financial instruments (i)






8,149,706Profit in inventory (j)


(26,755,771
)


(7,836,552
)Advanced payments on minimum guaranteed dividend (k)


(4,270,225
)


(268,990
)Deferred income taxes (n)


305,403



367,891Reclassification of Pemex Finance equity to minority
    interest (o)


(1,415,775
)


(1,464,681
)Total U.S. GAAP adjustments, net


(247,991,027
)


(64,338,444
)Deficit under U.S. GAAP


(Ps. 198,083,166
)


(Ps. 22,882,818
)     (1)
    Additional minimum pension liability, which was previously
    reported in the amount of Ps. 211,299,353, was corrected to
separately disclose the Recognition of the initial effect of
    SFAS 158 in the amount of Ps. 164,605,540 and the Additional minimum pension liability in the amount of Ps.
    46,693,813. F-48




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  2007


2006Changes in U.S. GAAP equity for the year ended December 31:Deficit at January 1


(Ps.   22,882,818
)


(Ps. 120,942,611
)Net (loss) income for the period


(32,642,076
)


56,722,446Mexican Government increase in equity of Subsidiary Entities


11,160,824



48,727,913Minimum guaranteed dividends


(4,270,225
)


(166,440
)Accumulated other comprehensive
    loss:(1)Recognition of initial effect of SFAS 158


(164,605,540
)


Other comprehensive (loss) income:Additional minimum pension
    liability (b)(1)


(3,793,689
)


(20,311,936
)Derivative financial instruments (i)


656,699



5,274,109Unrealized gains on available-for-sale investment
    securities (l)


(246,258
)


2,995,342Surplus in restatement of equity


18,539,917



4,108,265Other






710,094Deficit at December 31


(Ps. 198,083,166
)


(Ps.   22,882,818
)     (1)
    
    Other comprehensive (loss)
incomeAdditional minimum pension liability, previously reported
in the amount of Ps. 168,399,299, included the Recognition of
initial effect of SFAS 158 in the amount of Ps. 164,605,540.
PEMEX corrected the presentation of the Recognition of the initial
effect of SFAS 158 as a direct entry to Accumulated other comprehensive loss.  I.
    Explanation
    of reconciling items:  (a)
    Exploration
    and drilling costs        No. SFAS 19-1 (FSP 19-1). FSP 19-1
 F-49




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  FSP 19-1, FSP 19-1
  FSP 19-1.
  (b)
    Pensions
    and seniority premiums  Bulletin D-3, Bulletin D-3
       F-50




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  Bulletin D-3
  Item

Bulletin D-3

SFAS 158Net Periodic Cost

No difference

No differenceMinimum liability to be recognized

Accumulated Benefit Obligations (ABO)

Projected Benefit Obligations (PBO)Items not amortized unrecognized (actuarial gains/losses, prior
    service, plan amendments and transition obligation).

Recognized as components of net periodic cost based on the
    employees average working lifetime.

Recognize the total outstanding items as a component of the
    Accumulated other comprehensive loss/income (AOCI); for
    retirement and post-retirement benefits, as an adjustment to
    equityUnfunded ABO

Difference between ABO and plan assets

N/ARecognition of additional minimum liability

Difference between unfunded ABO and net projected liability

N/ARecognition of intangible asset and other comprehensive income

Offsetting account of additional liability

In the year of recognition of actuarial gain/losses and past
    service costs/credits, there is also a write off of an
    equivalent amount in other comprehensive income (OCI) SFAS 158,
    paragraph 4(d)Disclosure in the balance sheet of noncurrent assets, current
    liabilities and noncurrent liabilities

N/A

Required (for retirement and post-retirement benefits)   (c)
    Post-retirement
    benefits      Bulletin D-3
 F-51




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  (d)
    Accrued
    vacation    (e)
    Fixed
    assetsCapitalized gains and losses of derivative financial
    instruments        (f)
    Fixed
    assetsCapitalization of interest          2007


2006


2005Under Mexican FRS:Interest capitalized

Ps.
5,350,849


Ps.
6,996,305



Ps. 5,540,983Interest expense


57,847,569



46,099,472



57,146,232Total interest cost

Ps.
63,198,418


Ps.
53,095,777



Ps. 62,687,215Under U.S. GAAP:Interest capitalized

Ps.
7,797,815


Ps.
8,659,013



Ps. 6,321,963Interest expense


55,400,603



44,436,764



56,365,252Total interest cost

Ps.
63,198,418


Ps.
53,095,777



Ps. 62,687,215  F-52




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    (g)
    Fixed
    assetsImpairment  Bulletin C-15.
  Bulletin C-15,
  field-by-field
        (h)
    Fixed
    assetsDepreciation convention   F-53




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    (i)
    Accounting
    for derivative financial instruments           F-54




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
      Bulletin C-10,
       F-55




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
        (j)
    Profit in
    inventory    (k)
    Advance
    payments on minimum guaranteed dividend          (l)
    Accounting
    for available-for-sale securities (Repsol)   F-56




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
      Cost


Fair Value


Unrealized Gain2007

Ps.
10,429,499


Ps.
23,146,258


Ps.
12,716,7592006

Ps.
10,229,803


Ps.
23,192,820


Ps.
12,963,0172005

Ps.
10,078,636


Ps.
20,046,310


Ps.
9,967,675   (m)
    Effects
    of inflation on the U.S. GAAP adjustments  Bulletin B-10
  (n)
    Deferred
    income taxes    (o)
    Reclassification
    of Pemex Finance equity to minority interest    II.
    Additional
    disclosure requirements:  (a)
    Consolidation
    of Pemex Finance   F-57




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    (b)
    Special
    Tax on Production and Services (IEPS Tax)    i.e. gross-up).
  (c)
    Environmental,
    dismantlement and abandonment liabilities  site-by-site
  Guía para la
    Determinación de las Provisiones y Revelaciones de
    Carácter Ambiental
    i)
    As a result of the activities of PEMEX, an affected area is
    identified in a particular site, and PEMEX undertakes a formal
    commitment to correct the environmental deficiency, in
    accordance with the criteria, guidelines, standards and legal
    framework in force; andii)
    A reasonable estimate of the costs of remediation or
    clean-up of
    the identified affected area has been made, including the costs
    of the assessment studies.  site-by-site
   F-58




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    Procuraduría Federal de
    Protección al Ambiente
      Procedimiento para la
    Determinación de Gastos Asociados a las Actividades de
    Seguridad Industrial y Protección Ambiental
  Ley General del Equilibrio
    Ecológico y Protección al Ambiente
   F-59




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  and/or
      2007


2006PemexExploration and Production

Ps.
371,639


Ps.
716,572PemexRefining(1)


1,507,709



1,341,520PemexGas and Basic Petrochemicals


211,692



284,183PemexPetrochemicals


2,400



55,983Total Environmental Liability Accrual

Ps.
2,093,440


Ps.
2,398,258  ­
    ­
  (1)  The
    increase primarily resulted from revisions to estimates and new
    reserves established for additional remediation plans.
  (d)
    Dismantlement
    and abandonment costs         F-60




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    (e)
    Pensions
    and seniority premiums    2007


2006


2005Service cost

Ps.
9,088,563


Ps.
7,110,082


Ps.
6,513,611Interest cost


27,204,694



23,954,649



20,983,953Return on plan assets


(11,149
)


(32,821
)


(185,989
)Net amortization of gain and losses


431,153



349,640



815,762Amortization of net transition obligation


5,733,629



5,708,786



5,749,251Adjustment to net periodic pension cost due to inflation


866,361



1,521,663



1,098,702Plan amendments


527,348



522,253



198,205Net cost under U.S. GAAP


43,840,599



39,134,252



35,173,495Net cost under Mexican FRS


(46,169,035
)


(41,073,977
)


(36,185,952
)Additional (benefit) expense recognized under U.S. GAAP

(Ps.
2,328,436
)

(Ps.
1,939,725
)

(Ps.
1,012,457
)     2007


2006


2005Discount rate


4.25%



4.25%



4.50%Rates of increase in compensation levels


0.50%



0.50%



0.50%Expected long-term rate of return on assets


4.25%



4.25%



5.00%    F-61




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
      2007


2006Accumulated benefit obligation

Ps.
354,120,653


Ps.
329,198,933Projected benefit obligation


364,687,896



336,758,893Plan assets at fair value


(7,122,630
)


(2,118,402
)Projected benefit obligation in excess of plan assets


357,565,266



334,640,491Unrecognized net loss






(45,560,129
)Unrecognized transition obligation






(69,564,015
)Unrecognized prior service costs






(5,905,290
)Accrued liability under U.S. GAAP


357,565,266



213,611,057Accrued liability recognized under Mexican FRS


(232,543,132
)


(205,735,690
)U.S. GAAP adjustment to seniority premium and pension plan
    liability after recognition of SFAS 158

Ps.
125,022,134


Ps.
7,875,367Accumulated other comprehensive income


119,475,192



Net U.S. GAAP adjustment to seniority premium and pension plan
    liability


5,546,942



7,875,367Additional minimum liability

Ps.



Ps.
115,122,678  F-62




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    2007


2006Before recognition of the funded status provisions of
    SFAS 158Additional liability

Ps.
114,921,322


Ps.
115,122,678Actual intangible assets


68,227,509



72,222,554Accumulated other comprehensive (Income)


46,693,813



42,900,124After recognition of the funded status provision of
    SFAS 158Transition (assets) obligation

Ps.
63,402,660


Ps.
Prior service cost (income)


5,208,308



Net (gain)/loss


50,864,224



Accumulated other comprehensive (Income)


119,475,192



Increase in accumulated other comprehensive loss (income) to
    reflect the recognition of SFAS 158

Ps.
72,781,379


Ps.
Non current assets


(7,122,630
)


Current liabilities


10,719,970



Non current liabilities


346,845,296



Net amount recognized in statement of financial position as of
    December 31, 2007

Ps.
357,565,266


Ps.
328,733,735     Expected BenefitYear

Payments2008

Ps.
17,842,6002009


17,923,4332010


19,624,6672011


21,467,4042012


23,259,4172013


25,232,6302014


26,954,7212015


28,900,7222016


30,446,6222017


32,066,949Total

Ps.
243,719,165    F-63




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  28-day
        Securities

2007


2006Mexican Government Bonds


84.%



71%Bonds issued by financial institutions listed on the Mexican
    Stock Exchange


16%



29%Total


100%



100%   (f)
    Other
    post-retirement benefits     F-64




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    Expected BenefitYear

Payments2008

Ps.
13,257,8292009


14,117,3052010


15,172,4102011


16,350,6952012


17,605,2142013


18,965,3862014


20,307,8142015


21,715,4692016


22,562,9572017


23,634,012Total

Ps.
183,689,091  F-65




---



##### 





PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    2007


2006


2005Supplemental








Supplemental








SupplementalPayments


Health Services


Total


Payments


Health Services


Total


Payments


Health Services


TotalService cost

Ps.
4,103,096


Ps.
2,298,180


Ps.
6,401,276


Ps.
4,687,869


Ps.
1,210,546


Ps.
5,898,415


Ps.
2,715,518


Ps.
1,448,328


Ps.
4,163,846Interest cost


14,283,753



7,508,894



21,792,647



12,170,005



5,543,442



17,713,447



9,689,454



5,572,995



15,262,449Amortization of actuarial (gains) and losses


812,365



(562,453
)


249,912



421,135



(2,697,498
)


(2,276,363
)


(177,395
)


(1,690,144
)


(1,867,539
)Amortization of prior service cost and plan amendments


21,545



55,841



77,386



21,369



58,797



80,166



(15,598
)






(15,598
)Amortization of transition obligation


3,112,566



2,791,828



5,904,394



3,087,178



2,769,056



5,856,234



3,108,667



2,791,742



5,900,409Adjustment to net periodic post-retirement benefit cost due to
    inflation


444,765



241,883



686,648



826,344



278,575



1,104,919



512,410



270,467



782,877Net expense under U.S. GAAP


22,778,090



12,334,173



35,112,263



21,213,900



7,162,918



28,376,818



15,833,056



8,393,386



24,226,444Expense under Mexican FRS


(22,925,973
)


(16,211,847
)


(39,137,820
)


(21,560,040
)


(11,859,332
)


(33,419,372
)


(15,890,329
)


(11,711,335
)


(27,601,664
)Additional expense (benefit) under U.S. GAAP

(Ps.
147,883
)

(Ps.
3,877,674
)

(Ps.
4,025,557
)

(Ps.
346,140
)

(Ps.
4,696,414
)

(Ps.
5,042,554
)

(Ps.
57,273
)

(Ps.
3,317,949
)

(Ps.
3,375,220
)  F-66




---



##### 





PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    2007

2006

2005Discount rate


4.25
%


4.25
%


4.50
%Health care cost trend rate


1.50
%


1.50
%


1.50
%    F-67




---



##### 





PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
 in thousands of U.S. dollars or other currency units,
    except exchange rates and oil prices per barrel)
    2007


2006Supplemental








SupplementalPayments


Health Services


Total


Payments


Health Services


TotalAccumulated unfunded post retirement benefit obligation:Retirees

Ps.
97,348,838


Ps.
53,911,935


Ps.
151,260,773


Ps.
83,090,461


Ps.
52,182,612


Ps.
135,273,073Fully eligible active participants


16,897,125



1,633,991



18,531,116



15,356,194



1,388,752



16,744,946Other active plan participants


84,421,650



43,687,740



128,109,390



75,012,521



39,450,953



114,463,474Total


198,667,613



99,233,666



297,901,279



173,459,176



93,022,317



266,481,493Unrecognized actuarial gains (losses)














(26,829,950
)


11,130,345



(15,699,605
)Prior service cost and plan amendments














(473,680
)


(503,366
)


(977,046
)Unamortized transition obligation














(37,623,004
)


(32,861,317
)


(70,484,321
)Net post-retirement benefit liability:U.S. GAAP


198,667,613



99,233,666



297,901,279



108,532,542



70,787,979



179,320,521Mexican FRS


(132,243,775
)


(39,645,991
)


(171,889,766
)


(115,068,180
)


(26,039,433
)


(141,107,613
)U.S. GAAP adjustment after recognition of SFAS 158


66,423,838



59,587,675



126,011,513



(6,535,638
)


44,748,546



38,212,908Accumulated other comprehensive income


73,107,425



18,716,736



91,824,161











Net U.S. GAAP adjustment

(Ps.
6,683,587
)

Ps.
40,870,939


Ps.
34,187,352


(Ps.
6,535,638
)

Ps.
44,748,546


Ps.
38,212,908  F-68




---



##### 





PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    2007SupplementalPayments


Health Services


TotalAfter recognition of the funded status provision of
    SFAS 158Transition (assets) obligation

Ps.
34,490,623


Ps.
29,986,702


Ps.
64,477,325Prior service cost (income)


452,493



446,770



899,263Net (gain)/loss


38,164,309



(11,716,736
)


26,447,573Accumulated other comprehensive (Income)

Ps.
73,107,425


Ps.
18,716,736


Ps.
91,824,161Increase in accumulated other comprehensive loss (income) to
    reflect the adoption of SFAS 158

Ps.
73,107,425


Ps.
18,716,736


Ps.
91,824,161Current liabilities

Ps.
8,810,348


Ps.
4,447,481


Ps.
13,257,829Noncurrent liabilities


189,857,265



94,786,185



284,643,450Net amount recognized in statement of financial position as of
    December 31, 2007

Ps.
198,667,613


Ps.
99,233,666


Ps.
297,901,279  F-69




---



##### 





PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
 in thousands of U.S. dollars or other currency units,
    except exchange rates and oil prices per barrel)
    Seniority Premiums andPension Benefits


Supplemental Payments


Health Services2007


2006


2007


2006


2007


2006Change in projected benefit obligation (PBO)Projected benefit obligation at beginning of year

Ps.
324,558,730


Ps.
281,522,669


Ps.
167,175,066


Ps.
142,717,327


Ps.
89,652,288


Ps.
65,811,024Effect of inflation on beginning balance


12,200,163



11,410,961



6,284,111



5,784,761



3,370,030



2,667,518Service cost


9,088,563



7,110,078



4,103,096



4,687,869



2,298,180



1,210,546Interest cost


27,204,694



23,954,649



14,283,753



12,170,005



7,508,894



5,543,442Prior service costs and plan amendments


(3,817
)


1,421,199



677,354



683,104



131,165



278,782Actuarial (gains)/losses


5,079,228



23,305,400



11,894,618



12,676,122



(1,121,669
)


19,901,488Benefits paid


(13,439,665
)


(11,966,065
)


(5,750,385
)


(5,260,012
)


(2,605,222
)


(2,390,482
)Projected benefit obligation at end of year

Ps.
364,687,896


Ps.
336,758,891


Ps.
198,667,613


Ps.
173,459,176


Ps.
99,233,666


Ps.
93,022,318Change in plan assetsFair value of plan assets at beginning of year

Ps.
2,041,656


Ps.
1,467,227






Ps.



Ps.



Ps.
Effect of inflation on beginning balance


76,746



59,472















Actual return on plan assets


(758,787
)


(804,844
)














Company contributions


24,953,065



18,304,118















Transfer of funds


(5,750,385
)


(5,207,690
)


5,750,385



5,207,690







Benefits paid


(13,439,665
)


(11,699,880
)


(5,750,385
)


(5,207,690
)






Fair value of plan assets at end of year

Ps.
7,122,630


Ps.
2,118,403


Ps.



Ps.



Ps.



Ps.
  F-70




---



##### 





PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  (g)
    Leases    (h)
    Supplemental
    geographical information    2007


2006


2005Domestic sales

Ps.
592,047,961


Ps.
567,289,873


Ps.
545,339,433Export sales:United States


441,431,866



450,196,550



376,680,788Canada, Central and South America


36,547,306



35,426,621



34,475,634Europe


52,691,863



41,273,059



39,640,832Far East


12,255,823



8,247,818



6,469,578Total export sales

Ps.
542,926,858


Ps.
535,144,048


Ps.
457,266,832Total sales

Ps.
1,134,974,819


Ps.
1,102,433,921


Ps.
1,002,606,265       (i)
    Valuation
    and qualifying accounts    Balance at


Additionsbeginning of


charged to costs





Balance atDescription

period


and expenses


Deductions


end of periodFor the year ended December 31, 2007:Reserves deducted in the balance sheet from the assets to
    which they apply:Allowance for doubtful accounts

Ps.
2,674,170


Ps.
12,242,359


(Ps.
13,425,595
)

Ps.
1,490,934For the year ended December 31, 2006:Reserves deducted in the balance sheet from the assets to which
    they apply:Allowance for doubtful accounts

Ps.
2,709,459


Ps.
153,181


(Ps.
188,470
)

Ps.
2,674,170For the year ended December 31, 2005:Reserves deducted in the balance sheet from the assets to which
    they apply:Allowance for doubtful accounts

Ps.
2,141,949


Ps.
1,670,690


(Ps.
1,103,180
)

Ps.
2,709,459      Note:
 F-71




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
   (j)
    Significant
    risks and uncertainties  Environmental
  clean-up
  clean-up
    Mexican
    Government
    Labor
    Product
    prices
   F-72




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  (k)
    Capitalized
    software costs    (l)
    Supplemental
    condensed information on a U.S. GAAP basis    CONDENSED
    CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2007 AND
    2006
  2007


2006ASSETSTotal current assets

Ps.
397,534,791


Ps.
399,950,872Properties and equipment, net


777,900,994



715,161,586Intangible asset derived from the actuarial computation of labor
    obligations and other assets


35,865,531



109,159,182Total assets

Ps.
1,211,301,316


Ps.
1,224,271,640LIABILITIESOther current liabilities

Ps.
290,099,944


Ps.
176,904,411Reserve for retirement payments, pensions and seniority premiums


23,977,799



Total current liabilities


314,077,743



176,904,411Long-term debt


424,828,472



524,475,242Reserve for dismantlement and abandonment activities, sundry
    creditors and others


31,467,252



31,513,074Reserve for retirement payments, pensions and seniority premiums


631,488,746



508,054,258Non current deferred income tax liabilities


6,106,494



4,742,792Total liabilities


1,407,968,707



1,245,689,777Minority interest


1,415,775



1,464,681TOTAL EQUITY (DEFICIT)


(198,083,166
)


(22,882,818
)Total liabilities and equity

Ps.
1,211,301,316


Ps.
1,224,271,640  F-73




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  CONSOLIDATED
    STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
    DECEMBER 31, 2007, 2006 AND 2005
  2007


2006


2005Total revenues, net of IEPS tax

Ps.
1,136,035,428


Ps.
1,103,509,868


Ps.
982,007,013Cost of sales


469,614,890



413,280,469



382,868,741Gross income


666,420,538



690,229,399



599,138,272General expenses


84,939,004



78,753,185



74,183,794Operating income


581,481,534



611,476,214



524,954,478Other revenues


83,019,010



61,213,533



2,896,394Comprehensive financing result (cost)


(25,609,627
)


(18,151,461
)


(10,116,062
)Profit sharing in non-consolidated subsidiaries and affiliates


5,791,312



7,078,236



7,828,486Income before taxes, duties and other and minority interest


644,682,229



661,616,522



525,563,296Taxes and duties, net of IEPS tax


(677,318,216
)


(604,839,287
)


(604,607,734
)Cumulative effect of adoption of new accounting standards










(1,905,868
)Minority interest


(6,089
)


(54,789
)


1,159,233Net income (loss)

(Ps.
32,642,076
)

Ps.
56,722,446


(Ps.
79,791,073
)  F-74




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
  2007


2006


2005Operating ActivitiesNet (loss) income for the year

(Ps.
32,642,076
)

Ps.
56,722,446


(Ps.
79,791,073
)Adjustments to reconcile net (loss) income to cash provided by
    (used in) operating activities:Depreciation and amortization


68,929,829



61,981,571



52,806,137Reserve for retirement payments, pensions and seniority premiums


78,952,867



67,511,070



59,399,939Loss on disposal of fixed assets


10,051,439



3,240,015



5,382,303Allowance for uncollectible trade accounts


(1,086,357
)


70,256



636,594Minority interest


4,157



67,788



(1,159,233
)Foreign exchange loss (gain)


4,318,464



13,966,773



(30,220,724
)Accrued interest


4,607,397







Profits sharing in subsidiaries


(5,533,058
)


(4,157,818
)


(1,660,060
)Deferred income taxes


1,881,378



(1,861,265
)


1,692,580Dismantlement and abandonment costs in fixed assets






(1,992,048
)


(1,761,581
)Unrealized gains on financial instruments


(8,149,706
)


(74,672
)


(733,513
)Gain from monetary position


(13,413,563
)


(14,819,222
)


(17,633,272
)107,920,771



180,654,894



(13,041,903
)Changes in operating assets and liabilities:Accounts and notes receivable


(10,237,517
)


(19,845,331
)


(55,976,205
)Inventories


3,643,578



(8,630,955
)


(7,263,527
)Other assets


1,219,546



(3,249,700
)


3,675,065Accounts payable and accrued
    liabilities(1)


106,582,975



(9,738,736
)


47,316,130Retirement, seniority premiums and other post-retirement benefit
    contributions and
    payments(1)


(27,717,544
)


(21,003,633
)


(22,897,096
)Cash flow provided by (used in) operating activities


181,411,809



118,186,539



(48,187,536
)Investing ActivitiesAcquisition of fixed assets


(134,133,678
)


(106,659,605
)


(78,426,949
)Investments in Subsidiaries


1,508,668







Specific funds accounts-trade commission






(6,599,909
)


7,497,438Cash flows used in investing activities


(132,625,010
)


(113,259,514
)


(70,929,511
)Financing
    Activities(1)Proceeds from new long term financing


117,557,830



168,709,813



263,049,489Financing payments


(194,928,716
)


(148,281,185
)


(140,741,177
)Increase in Equity of Subsidiary Entities


11,160,824



48,702,873



48,142,543Dividends paid to the Mexican Government


(263,329
)


(268,990
)


(16,500,691
)Cash flows (used in) provided by financing activities


(66,473,391
)


68,862,511



153,950,164Effects of inflation on cash and cash equivalents


(7,092,625
)


(8,463,098
)


(2,017,874
)(Decrease) increase in cash and equivalents


(24,779,217
)


65,326,438



32,815,244Cash and cash equivalents, beginning of period


195,776,457



130,450,019



97,634,776Cash and cash equivalents, end of period

Ps.
170,997,240


Ps.
195,776,457


Ps.
130,450,019Supplemental cash disclosures:Interest paid (net of amounts capitalized)

Ps.
42,784,228


Ps.
53,161,244


Ps.
59,154,710Taxes paid


623,886,506



635,331,409



541,262,289Supplemental non-cash disclosures:Unrealized gains on available for sale securities

(Ps.
240,723
)

Ps.
2,995,342


Ps.
830,179Additional minimum pension liability


(168,399,229
)


(20,311,938
)


(19,692,549
)Derivative financial instruments


656,699



5,274,109



(4,930,806
)     (1)
    
    PEMEX previously reported 2007 Retirement,
    seniority premiums and other post-retirement benefit
    contributions and payments under Financing
    activities in the amount of Ps. (27,717,544). PEMEX has
corrected such amount under Operating activities. PEMEX has also,
    within Operating activities, broken out the line item Accounts
    payable and accrued liabilities to separately disclose the
    amounts of its retirement, seniority premiums and other
    post-retirement benefit contributions and payments during 2006
    and 2005.  These changes to the previously
    reported amounts are summarized in the table below:  2007As Previously Reported


As CorrectedCash flow provided by (used in) operating activities


Ps. 209,129,353


Ps.
181,411,809Cash flow (used in) provided by financing activities


(Ps.   94,190,935
)

(Ps.
66,473,391
)
  F-75




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    (m)
    Recently
    issued accounting standards         F-76




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  (n)
    Accounting
    for Buy/Sell Contracts      No. 04-13, (EITF 04-13). EITF 04-13 EITF 04-13.
  (o)
    Deferred
    income taxes     F-77




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    2007


2006Current deferred tax asset:Accounts and other receivables

Ps.
947,346


Ps.
1,364,303Inventories


3,979,258



1,887,170Accrued liabilities


245,505



383,263Prepaids and other current assets


45,405



218,420Total current deferred tax asset


5,217,514



3,853,156Less: current valuation allowance


(4,799,664
)


(3,339,648
)Net current deferred tax asset

Ps.
417,850


Ps.
513,508Current deferred tax liability:Prepaids and other current assets






Total current deferred tax liability

Ps.



Ps.
Noncurrent deferred tax asset:Contingencies

Ps.
1,304,574


Ps.
1,466,308Derivative financial instruments






Reserve for environmental costs


516,493



503,387Property taxes






Tax loss carryforwards


653



8,370Other assets


182,115



Fixed assets


5,189,973



7,951,927Total noncurrent deferred tax asset


7,193,808



9,929,992Less: noncurrent valuation allowance


(6,617,685
)


(8,606,622
)Net noncurrent deferred tax asset

Ps.
576,123


Ps.
1,323,370Noncurrent deferred tax liability:Derivative financial instruments






(649,728
)Fixed assets


(7,100,465
)


(5,416,431
)Net noncurrent deferred tax liability


(7,100,465
)


(6,066,159
)Total noncurrent deferred tax liability


(6,524,342
)


(4,742,789
)Net deferred tax liability

(Ps.
6,106,493
)

(Ps.
4,229,281
)Net deferred tax liability under U.S. GAAP

(Ps.
6,106,493
)

(Ps.
4,229,281
)Net deferred tax liability under Mexican FRS


6,411,896



4,597,172Net U.S. GAAP adjustments to the net deferred tax
    liability

Ps.
305,403


Ps.
367,891   (p)
    Asset
    retirement obligations   F-78




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  and/or and/or and/or
    2007


2006Balance at January 1

Ps.
16,027,309


Ps.
14,787,131Liabilities incurred


1,338,248



1,789,002Liabilities settled






Accretion expense


118,204



(36,911
)Inflation


(580,643
)


(302,725
)Currency exchange gain


245,272



(72,542
)Revisions in estimated cash flows






(136,646
)Balance at December 31

Ps.
17,148,390


Ps.
16,027,309   NOTE 22SUBSIDIARY
    GUARANTOR INFORMATION, PIDIREGAS LIABILITIES AND THE PEMEX
    PROJECT FUNDING MASTER TRUST (THE MASTER
    TRUST)
    Bulletin B-10,
 F-79




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
        (i)
    the obligation of Petróleos Mexicanos to guarantee the
    repayment of the debt obligations undertaken by the Master Trust
    to finance PIDIREGAS;(ii)
    the obligation of Petróleos Mexicanos and the Subsidiary
    Guarantor which is sponsoring the relevant PIDIREGAS to make
    such payments to the Master Trust as may be necessary for the
    Master Trust to fulfill its payment obligations in respect of
    any financing the Master Trust has entered into in connection
    with such project; and(iii)
    the joint and several obligation of Petróleos Mexicanos and
    each of the aforementioned Subsidiary Guarantors to indemnify
    the Master Trust with respect to any liability incurred by the
    Master Trust in connection with PIDIREGAS.  Bulletin B-8
 F-80




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    Table 1:
    Registered Debt Securities of the Master Trust
  Principal AmountSecurity

Issuer


Guarantor


Outstanding5.75% Notes due 2015


Master Trust



Petróleos Mexicanos


U.S.$
234,3726.125% Notes due 2008


Master Trust



Petróleos Mexicanos



281,4006.625% Guaranteed Bonds due 2035


Master Trust



Petróleos Mexicanos



1,249,0007.375% Notes due 2014


Master Trust



Petróleos Mexicanos



362,9957.875% Notes due 2009


Master Trust



Petróleos Mexicanos



797,7278.00% Notes due 2011


Master Trust



Petróleos Mexicanos



182,1748.625% Bonds due 2022


Master Trust



Petróleos Mexicanos



160,2458.625% Bonds due 2023


Master Trust



Petróleos Mexicanos



106,5079.125% Notes due 2010


Master Trust



Petróleos Mexicanos



552,8559.25% Guaranteed Bonds due 2018


Master Trust



Petróleos Mexicanos



107,1099.375% Guaranteed Notes due 2008


Master Trust



Petróleos Mexicanos



294,7759.50% Guaranteed Bonds due 2027


Master Trust



Petróleos Mexicanos



219,217     Table 2:
    Registered Debt Securities of Petróleos Mexicanos
  Principal AmountSecurity

Issuer

Guarantor

Outstanding9.25% Global Guaranteed Bonds due 2018

Petróleos
    Mexicanos

Pemex Exploration and Production, Pemex Refining and Pemex Gas
    and Basic Petrochemicals

U.S.$
9,2969.375% Guaranteed Notes due 2008

Petróleos
    Mexicanos

Pemex Exploration and Production, Pemex Refining and Pemex Gas
    and Basic Petrochemicals


99,8599.50% Global Guaranteed Bonds due 2027

Petróleos
    Mexicanos

Pemex Exploration and Production, Pemex Refining and Pemex Gas
    and Basic Petrochemicals


102,149      F-81




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
     F-82




---



##### 





PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS(Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
  (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
 in thousands of U.S. dollars or other currency units, except
    exchange rates and oil prices per barrel)
  SUPPLEMENTAL
    CONDENSED CONSOLIDATING FINANCIAL INFORMATION
    BALANCE SHEET
    As of December 31, 2007
 Petróleos





Subsidiary


Non-Guarantor





PEMEXMexicanos(1)


Master
    Trust(1)


Guarantors(1)


Subsidiaries


Eliminations


ConsolidatedASSETSCurrent assets:Cash and cash equivalents

Ps.
121,386,348


Ps.
19,201,904


Ps.
3,672,809


Ps.
26,736,179


Ps.



Ps.
170,997,240Accounts, notes receivable and other,net and derivative financialinstruments


18,262,729



3,883,155



86,304,727



55,969,800







164,420,411Accounts receivable-intercompany


123,671,752



73,310,725



778,048,681



95,832,373



(1,070,863,531
)


Inventories, net


313,283







77,582,304



15,247,549







93,143,136Total current assets


263,634,112



96,395,784



945,608,521



193,785,901



(1,070,863,531
)


428,560,787Long-term receivables  intercompany


633,228,579



470,050,109



16,380,552



98,550,013



(1,218,209,253
)


Investments in shares


368,950,383







1,595,297



30,312,679



(367,795,005
)


33,063,354Other investments


213,432,941















(213,432,941
)


Properties and equipment, net


8,070,672







770,025,355



15,749,426







793,845,453Intangible asset derived from the actuarial computation of
    labor obligations


11,124,683







54,913,164



5,970,988







72,008,835Other assets


954,213







809,713



1,038,251







2,802,177Total assets

Ps.
1,499,395,583


Ps.
566,445,893


Ps.
1,789,332,602


Ps.
345,407,258


(Ps.
2,870,300,730
)

Ps.
1,330,280,606LIABILITIESCurrent liabilities:Current portion of long-term debt

Ps.
6,603,093


Ps.
62,355,642


Ps.
2,337,399


Ps.
4,753,994


Ps.



Ps.
76,050,128Accounts payable  intercompany


728,424,666



6,605,943



219,812,679



68,108,752



(1,022,952,040
)


Other current liabilities


3,816,030



13,457,162



151,890,502



44,250,030







213,413,724Total current liabilities


738,843,789



82,418,747



374,040,580



117,112,776



(1,022,952,040
)


289,463,852Long-term debt


8,676,110



289,721,950



5,160,995



121,269,417







424,828,472Long-term payables-intercompany


623,510,449



194,105,101



648,882,879



13,046,260



(1,479,544,689
)


Reserve for retirement payments, pensions, seniority
    premiums, dismantlement and abandonment activities, sundry
    creditors, and others


79,229,875



200,095



433,390,324



53,260,127







566,080,421Total Liabilities


1,450,260,223



566,445,893



1,461,474,778



304,688,580



(2,502,496,729
)


1,280,372,745EQUITY


49,135,360







327,857,824



40,718,678



(367,804,001
)


49,907,861Total liabilities and equity

Ps.
1,499,395,583


Ps.
566,445,893


Ps.
1,789,332,602


Ps.
345,407,258


(Ps.
2,870,300,730
)

Ps.
1,330,280,606   (1)
    
    Petróleos Mexicanos is the
    issuer of the registered debt securities shown in Table 2 above
    and a full and unconditional guarantor of the registered debt
    securities shown in Table 1 above. The Master Trust is the
    issuer of the registered debt securities shown in Table 1 above,
    but is not an obligor on the registered debt securities shown in
    Table 2 above. The Subsidiary Guarantors are full and
    unconditional guarantors of the registered debt securities
    listed in both Table 1 and Table 2 above. F-83




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS(Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
 (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
 in thousands of U.S. dollars or other currency units, except
    exchange rates and oil prices per barrel)
  SUPPLEMENTAL
    CONDENSED CONSOLIDATING FINANCIAL INFORMATION
    U.S. GAAP RECONCILIATION OF EQUITY
    For the year ended December 31, 2007
 Petróleos





Subsidiary


Non-Guarantor





PEMEXMexicanos(1)


Master
    Trust(1)


Guarantors(1)


Subsidiaries


Eliminations


ConsolidatedEquity under Mexican FRS

Ps.
49,135,360


Ps.



Ps.
327,857,824


Ps.
40,718,678


(Ps.
367,804,001
)

Ps.
49,907,861U.S. GAAP adjustments:Exploration and drilling costs










12,518,420











12,518,420Pensions and seniority premiums


(215,898
)






(4,721,584
)


(609,460
)






(5,546,942
)Additional Pension liability


(9,035,148
)






(52,271,893
)


(6,408,612
)






(67,715,653
)Post-retirement benefits


(4,792,303
)






(25,951,048
)


(3,444,001
)






(34,187,352
)Effect in equity of labor obligation


(13,666,071
)






(69,621,670
)


(8,536,420
)






(91,824,161
)Accrued vacation


(88,199
)






(483,805
)


(64,088
)






(636,092
)Fixed asset adjustments:Capitalized gains (losses) of hedging financial instruments,
    net










2,883,974











2,883,974Capitalization of interest, net


39,891







(5,233,589
)


411,091







(4,782,607
)Impairment, net










(22,615,830
)


(3,948,416
)






(26,564,246
)Profit in inventory










(26,755,771
)










(26,755,771
)Deferred income taxes










305,403











305,403Advance payment of minimum guaranteed dividends (APMGD)


(4,270,225
)


















(4,270,225
)Reclassification of Pemex Finance net income to minority
    interest














(1,415,775
)






(1,415,775
)Investments in
    subsidiaries(2)


(215,963,074
)














215,963,074



Total U.S. GAAP adjustments, net


(247,991,027
)






(191,947,393
)


(24,015,681
)


215,963,074



(247,991,027
)Equity (Deficit) under U.S. GAAP

Ps.
(198,855,667
)

Ps.



Ps.
135,910,431


Ps.
16,702,997


(Ps.
151,840,927
)

(Ps.
198,083,166
)     (1)
    
    Petróleos Mexicanos is the
    issuer of the registered debt securities shown in Table 2 above
    and a full and unconditional guarantor of the registered debt
    securities shown in Table 1 above. The Master Trust is the
    issuer of the registered debt securities shown in Table 1 above,
    but is not an obligor on the registered debt securities shown in
    Table 2 above. The Subsidiary Guarantors are full and
    unconditional guarantors of the registered debt securities
    listed in both Table 1 and Table 2 above.(2)
    
    Reflects adjustment to investment
    balances of subsidiaries as a result of applying U.S. GAAP
    adjustments of such subsidiaries. F-84




---



##### 








PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS(Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
 (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
 in thousands of U.S. dollars or other currency units, except
    exchange rates and oil prices per barrel)
  SUPPLEMENTAL
    CONDENSED CONSOLIDATING FINANCIAL INFORMATION
    BALANCE SHEET
    As of December 31, 2006
  Petróleos





Subsidiary


Non-Guarantor





PEMEXMexicanos(1)


Master
    Trust(1)


Guarantors(1)


Subsidiaries


Eliminations


ConsolidatedASSETSCurrent assets:Cash and cash equivalents

Ps.
133,079,873


Ps.
22,681,704


Ps.
2,977,334


Ps.
37,037,546


Ps.



Ps.
195,776,457Accounts, notes receivable and other, netand derivative financial instruments


41,568,203



5,393,950



51,748,849



42,841,939







141,552,941Accounts receivable-intercompany


51,127,882



40,622,344



685,098,180



68,332,370



(845,180,776
)


Inventories, net


437,851



7,942



51,439,914



10,178,091







62,063,798Total current assets


226,213,809



68,705,940



791,264,277



158,389,946



(845,180,776
)


399,393,196Long-term receivables  intercompany


615,065,974



405,184,550



21,331,177



100,448,654



(1,142,030,355
)


Investments in shares


405,264,102







2,455,759



29,117,822



(404,076,737
)


32,760,946Other investments


56,697,030















(56,697,030
)


Properties and equipment, net


8,423,458







712,658,610



16,113,389







737,195,457Intangible asset derived from the actuarial computation of labor
    obligations


11,931,936







58,163,091



6,400,106







76,495,133Other assets


1,282,491







1,139,339



1,753,862







4,175,692Total assets

Ps.
1,324,878,800


Ps.
473,890,490


Ps.
1,587,012,253


Ps.
312,223,779


(Ps.
2,447,984,898
)

Ps.
1,250,020,424LIABILITIESCurrent liabilities:Current portion of long-term debt

Ps.
12,844,824


Ps.
32,662,476


Ps.
1,365,763


Ps.
19,367,215






Ps.
66,240,278Accounts payable  intercompany


634,537,523



4,565,436



180,187,172



25,882,770



(845,172,901
)


Other current liabilities


4,389,487



12,814,454



55,490,541



37,379,369







110,073,851Total current liabilities


651,771,834



50,042,366



237,043,476



82,629,354



(845,172,901
)


176,314,129Long-term debt


15,805,453



373,149,214



1,201,152



134,319,423







524,475,242Long-term payables-intercompany


545,477,446



50,698,910



582,599,564



19,951,468



(1,198,727,388
)


Reserve for retirement payments, pensions, seniority premiums,
    dismantlement and abandonment activities, sundry creditors, and
    others


69,199,554







391,368,856



47,207,017







507,775,427Total Liabilities


1,282,254,287



473,890,490



1,212,213,048



284,107,262



(2,043,900,289
)


1,208,564,798EQUITY


42,624,513







374,799,205



28,116,517



(404,084,609
)


41,455,626Total liabilities and equity

Ps.
1,324,878,800


Ps.
473,890,490


Ps.
1,587,012,253


Ps.
312,223,779


(Ps.
2,447,984,898
)

Ps.
1,250,020,424   (1)
    
    Petróleos Mexicanos is the
    issuer of the registered debt securities shown in Table 2 above
    and a full and unconditional guarantor of the registered debt
    securities shown in Table 1 above. The Master Trust is the
    issuer of the registered debt securities shown in Table 1 above,
    but is not an obligor on the registered debt securities shown in
    Table 2 above. The Subsidiary Guarantors are full and
    unconditional guarantors of the registered debt securities
    listed in both Table 1 and Table 2 above. F-85




---



##### 








PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS(Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
 (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
 in thousands of U.S. dollars or other currency units, except
    exchange rates and oil prices per barrel)
  SUPPLEMENTAL
    CONDENSED CONSOLIDATING FINANCIAL INFORMATION
    U.S. GAAP RECONCILIATION OF EQUITY
    For the year ended December 31, 2006
  Petróleos





Subsidiary


Non-Guarantor





PEMEXMexicanos(1)


Master
    Trust(1)


Guarantors(1)


Subsidiaries


Eliminations


ConsolidatedEquity under Mexican FRS

Ps.
42,624,513


Ps.



Ps.
374,799,205


Ps.
28,116,517


(Ps.
404,084,609
)

Ps.
41,455,626U.S. GAAP adjustments:Exploration and drilling costs










13,889,293











13,889,293Pensions and seniority premiums


(526,576
)






(6,518,979
)


(829,823
)






(7,875,378
)Additional Pension liability


722,398







4,215,207



489,019







5,426,624Post-retirement benefits


(5,391,421
)






(29,003,251
)


(3,818,236
)






(38,212,908
)Accrued vacation


(81,540
)






(449,182
)


(59,561
)






(590,283
)Fixed asset adjustments:Capitalized gains (losses) or derivative financial instruments,
    net










3,061,308











3,061,308Capitalization of interests, net


27,020







(8,493,416
)


173,829







(8,292,567
)Impairment, net










(25,765,627
)


(4,143,136
)






(29,908,763
)Depreciation convention


(17,692
)






(736,698
)


(28,754
)






(783,144
)Derivative financial instruments


613







8,146,456



2,637







8,149,706Profit in inventory










(7,836,552
)










(7,836,552
)Deferred income taxes










367,891











367,891Advance payment of minimum guaranteed dividends


(268,990
)


















(268,990
)Reclassification of Pemex Finance net income to minority interest














(1,464,681
)






(1,464,681
)Investments in
    subsidiaries(2)


(58,802,256
)














58,802,256



Total U.S. GAAP adjustments, net


(64,338,444
)






(49,123,550
)


(9,678,706
)


58,802,256



(64,338,444
)Equity (Deficit) under U.S. GAAP

(Ps.
21,713,931
)

Ps.



Ps.
325,675,655


Ps.
18,437,811


(Ps.
345,282,353
)

(Ps.
22,882,818
)     (1)
    
    Petróleos Mexicanos is the
    issuer of the registered debt securities shown in Table 2 above
    and a full and unconditional guarantor of the registered debt
    securities shown in Table 1 above. The Master Trust is the
    issuer of the registered debt securities shown in Table 1 above,
    but is not an obligor on the registered debt securities shown in
    Table 2 above. The Subsidiary Guarantors are full and
    unconditional guarantors of the registered debt securities
    listed in both Table 1 and Table 2 above(2)
    
    Reflects adjustment to investment
    balances of subsidiaries as a result of applying U.S. GAAP
    adjustments of such subsidiaries F-86




---



##### 








PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS(Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
 (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
 in thousands of U.S. dollars or other currency units, except
    exchange rates and oil prices per barrel)
  SUPPLEMENTAL
    CONDENSED CONSOLIDATING FINANCIAL INFORMATION
    STATEMENT OF INCOME
    For the year ended December 31, 2007
  Petróleos





Subsidiary


Non-Guarantor





PEMEXMexicanos(1)


Master
    Trust(1)


Guarantors(1)


Subsidiaries


Eliminations


ConsolidatedNet sales

Ps.
34,453,424


Ps.



Ps.
1,607,811,952


Ps.
814,111,011


(Ps.
1,321,401,568
)

Ps.
1,134,974,819Services income


27,491











1,852,541



(819,423
)


1,060,609Total sales revenues


34,480,915







1,607,811,952



815,963,552



(1,322,220,991
)


1,136,035,428Costs of sales


235,627







932,208,069



815,588,389



(1,287,366,343
)


460,665,742Gross income


34,245,288







675,603,883



375,163



(34,854,648
)


675,369,686General expenses:Transportation and distribution expenses










23,561,036



1,237,503







24,798,539Administrative expenses


32,982,205



25,934



51,611,895



8,684,722



(33,164,291
)


60,140,465Total general expenses


32,982,205



25,934



75,172,931



9,922,225



(33,164,291
)


84,939,004Operating income


1,263,083



(25,934
)


600,430,952



(9,547,062
)


(1,690,357
)


590,430,682Other (expenses) revenues, net


(321,083
)






82,028,474



(6,439,786
)


7,751,405



83,019,010Comprehensive financing result (cost) income


10,119,811



(25,786,670
)


(30,254,918
)


(4,995,428
)


30,870,618



(20,046,587
)Equity participation in subsidiaries


(29,969,811
)










12,842,972



22,671,893



5,545,054Capitalization of Master Trust operations and others






25,812,604







3,810,272



(29,622,876
)


(Loss) Income before taxes and duties


(18,908,000
)






652,204,508



(4,329,032
)


29,980,683



658,948,159Taxes and duties


662,486







672,933,568



3,659,674







677,255,728Net (loss) income for the year

(Ps.
19,570,486
)

Ps.



(Ps.
20,729,060
)

(Ps.
7,988,706
)

Ps.
29,980,683


(Ps.
18,307,569
)     (1)
    
    Petróleos Mexicanos is the
    issuer of the registered debt securities shown in Table 2 above
    and a full and unconditional guarantor of the registered debt
    securities shown in Table 1 above. The Master Trust is the
    issuer of the registered debt securities shown in Table 1 above,
    but is not an obligor on the registered debt securities shown in
    Table 2 above. The Subsidiary Guarantors are full and
    unconditional guarantors of the registered debt securities
    listed in both Table 1 and Table 2 above. F-87




---



##### 








PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS(Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
 (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
 in thousands of U.S. dollars or other currency units, except
    exchange rates and oil prices per barrel)
  SUPPLEMENTAL
    CONDENSED CONSOLIDATING FINANCIAL INFORMATION
    U.S. GAAP RECONCILIATION OF INCOME
    For the year ended December 31, 2007
 Petróleos


Master


Subsidiary


Non-Guarantor





PEMEXMexicanos(1)


Trust(1)


Guarantors(1)


Subsidiaries


Eliminations


ConsolidatedNet (loss) income under Mexican FRS


(Ps. 19,570,486
)

Ps.




(Ps. 20,729,060
)


(Ps. 7,988,706
)

Ps.
29,980,683


(Ps.
18,307,569
)U.S. GAAP adjustments:Exploration and drilling costs










(1,370,873
)










(1,370,873
)Pension and seniority premiums


310,678







1,797,395



220,363







2,328,436Post-retirement benefits


599,118







3,052,203



374,236







4,025,557Accrued vacation


(6,659
)






(34,623
)


(4,527
)






(45,809
)Fixed asset adjustments:Capitalized gains of hedging financial instruments, net










(177,334
)










(177,334
)Capitalization of interest, net


12,871







3,259,826



237,263







3,509,960Impairment, net










3,149,798



194,719







3,344,517Depreciation convention


17,692







736,700



28,752







783,144Derivative financial instruments


(613
)






(8,146,456
)


(2,637
)






(8,149,706
)Profit in inventory










(18,919,219
)










(18,919,219
)Available-for-sale securities


246,258



















246,258Deferred income taxes










(62,488
)










(62,488
)Effect of inflation accounting on U.S. GAAP adjustment


140,863







16,163



2,113







159,139Reclassification of Pemex Finance net income to minority
    interest














(6,089
)






(6,089
)Investments in Subsidiaries


(15,654,715
)














15,654,715



Total U.S. GAAP adjustments


(14,334,507
)






(16,698,908
)


1,044,193



15,654,715



(14,334,507
)Net (loss) income for the year


(Ps. 33,904,993
)

Ps.




(Ps. 37,427,968
)


(Ps. 6,944,513
)

Ps.
45,635,398


(Ps.
32,642,076
)
     (1)
    Petróleos Mexicanos is the issuer of the registered debt
    securities shown in Table 2 above and a full and unconditional
    guarantor of the registered debt securities shown in Table 1
    above. The Master Trust is the issuer of the registered debt
    securities shown in Table 1 above, but is not an obligor on the
    registered debt securities shown in Table 2 above. The
    Subsidiary Guarantors are full and unconditional guarantors of
    the registered debt securities listed in both Table 1 and Table
    2 above.


F-88




---



##### 





PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS(Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
 in thousands of U.S. dollars or other currency units, except
    exchange rates and oil prices per barrel)
  SUPPLEMENTAL
    CONDENSED CONSOLIDATING FINANCIAL INFORMATION
    STATEMENT OF INCOME 
    For the year ended December 31, 2006
  Petróleos





Subsidiary


Non-Guarantor





PEMEXMexicanos(1)


Master
    Trust(1)


Guarantors(1)


Subsidiaries


Eliminations


ConsolidatedNet sales

Ps.
26,436,747


Ps.



Ps.
1,564,963,881


Ps.
711,981,523


Ps.
(1,200,948,230
)

Ps.
1,102,433,921Services income














1,707,386



(631,439
)


1,075,947Total revenues


26,436,747







1,564,963,881



713,688,909



(1,201,579,669
)


1,103,509,868Costs of sales


209,910







880,664,298



713,123,190



(1,175,739,188
)


418,258,210Gross income


26,226,837







684,299,583



565,719



(25,840,481
)


685,251,658Transportation and distribution expenses










23,785,565



1,136,091







24,921,656Administrative expenses


31,117,062



31,114



42,096,348



8,135,270



(25,327,021
)


56,052,773Total costs and operating expenses


31,117,062



31,114



65,881,913



9,271,361



(25,327,021
)


80,974,429Operating income


(4,890,225
)


(31,114
)


618,417,670



(8,705,642
)


(513,460
)


604,277,229Other (expenses) revenues net


(671,689
)






60,257,979



795,886



831,357



61,213,533Comprehensive financing result (cost) income


17,621,942



(10,567,511
)


(32,065,634
)


(7,121,106
)


8,285,684



(23,846,625
)Equity participation in subsidiaries


36,579,228











10,041,050



(36,546,701
)


10,073,577Capitalization of Master Trust operations and others






10,598,625







(1,993,908
)


(8,604,717
)


Income (loss) before taxes and duties


48,639,256







646,610,015



(6,983,720
)


(36,547,837
)


651,717,714Taxes and duties


360,447







599,735,358



4,668,704







604,764,509Net income (loss) for the year

Ps.
48,278,809


Ps.



Ps.
46,874,657


Ps.
(11,652,424
)

Ps.
(36,547,837
)

Ps.
46,953,205     (1)
    
    Petróleos Mexicanos is the
    issuer of the registered debt securities shown in Table 2 above
    and a full and unconditional guarantor of the registered debt
    securities shown in Table 1 above. The Master Trust is the
    issuer of the registered debt securities shown in Table 1 above,
    but is not an obligor on the registered debt securities shown in
    Table 2 above. The Subsidiary Guarantors are full and
    unconditional guarantors of the registered debt securities
    listed in both Table 1 and Table 2 above. F-89




---



##### 








PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS(Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
    in thousands of U.S. dollars or other currency units, except
    exchange rates and oil prices per barrel)
  SUPPLEMENTAL
    CONDENSED CONSOLIDATING FINANCIAL INFORMATION
    U.S. GAAP RECONCILIATION OF INCOME
    For the year ended December 31, 2006
  Petróleos


Master


Subsidiary


Non-Guarantor





PEMEXMexicanos(1)


Trust(1)


Guarantors(1)


Subsidiaries


Eliminations


ConsolidatedNet income (loss) under Mexican FRS

Ps.
48,278,809


Ps.



Ps.
46,874,657



(Ps. 11,652,424
)


(Ps.  36,547,837
)

Ps.
46,953,205U.S. GAAP adjustments:Exploration and drilling costs










(1,498,801
)










(1,498,801
)Pension and seniority premiums


258,219







1,506,708



174,798







1,939,725Post-retirement benefits


730,119







3,845,768



466,667







5,042,554Accrued vacation


(2,987
)






(15,532
)


(2,030
)






(20,549
)Fixed asset adjustments:Capitalized gains of hedging financial instruments, net










3,928,429











3,928,429Capitalization of interest, net


14,470







2,439,576



340,348







2,794,394Impairment, net










3,546,475



432,091







3,978,566Depreciation convention


17,692







736,700



28,752







783,144Derivative financial instruments


(209,153
)






287,164



3,338







74,673Profit in inventory










(4,156,613
)










(4,156,613
)Available-for-sale securities


(2,995,342
)


















(2,995,342
)Deferred income taxes










(74,777
)










(74,777
)Effect of inflation accounting on U.S. GAAP Adjustment


8,891







17,453



2,283







28,627Reclassification of Pemex Finance net income to minority interest














(54,789
)






(54,789
)Investments in Subsidiaries


11,947,332















(11,947,332
)


Total U.S. GAAP adjustments


9,769,241







10,562,550



1,384,782



(11,947,332
)


9,769,241Net income (loss) for the year

Ps.
58,048,050


Ps.



Ps.
57,437,207



(Ps.  10,267,642
)


(Ps.  48,495,169
)

Ps.
56,722,446     (1)
    
    Petróleos Mexicanos is the
    issuer of the registered debt securities shown in Table 2 above
    and a full and unconditional guarantor of the registered debt
    securities shown in Table 1 above. The Master Trust is the
    issuer of the registered debt securities shown in Table 1 above,
    but is not an obligor on the registered debt securities shown in
    Table 2 above. The Subsidiary Guarantors are full and
    unconditional guarantors of the registered debt securities
    listed in both Table 1 and Table 2 above. F-90




---



##### 








PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS(Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
    in thousands of U.S. dollars or other currency units, except
    exchange rates and oil prices per barrel)
  SUPPLEMENTAL
    CONDENSED CONSOLIDATING FINANCIAL INFORMATION
    STATEMENT OF INCOME
    For the year ended December 31, 2005
  Petróleos





Subsidiary


Non-Guarantor





PEMEXMexicanos(1)


Master
    Trust(1)


Guarantors(1)


Subsidiaries


Eliminations


ConsolidatedNet sales

Ps.
24,061,252


Ps.



Ps.
1,430,157,491


Ps.
593,717,816


Ps.
(1,045,330,294
)

Ps.
1,002,606,265Services income














1,875,001



(650,193
)


1,224,808Total sales revenues


24,061,252







1,430,157,491



595,592,817



(1,045,980,487
)


1,003,831,073Costs of sales


144,345







812,102,068



617,226,094



(1,039,528,608
)


389,943,899Gross income


23,916,907







618,055,423



(21,633,277
)


(6,451,879
)


613,887,174General expenses:Transportation and distribution expenses










22,490,759



1,165,151







23,655,910Administrative expenses


25,656,966



27,590



46,231,359



5,381,815



(26,769,846
)


50,527,884Total costs and operating expenses


25,656,966



27,590



68,722,118



6,546,966



(26,769,846
)


74,183,794Operating income


(1,740,059
)


(27,590
)


549,333,305



(28,180,243
)


20,317,967



539,703,380Other (expenses) revenues, net


(1,096,609
)






(2,816,900
)


21,144,400



(14,334,497
)


2,896,394Comprehensive financing result (cost) income


141,280



(4,114,555
)


7,422,464



(12,722,733
)


4,437,453



(4,836,091
)Equity participation in subsidiaries


(79,370,808
)










6,004,200



82,025,273



8,658,665Capitalization of Master Trust operations and others






4,142,145







6,280,036



(10,422,181
)


(Loss) income before taxes and duties, special tax on production
    and services (IEPS tax) and cumulative effect of adoption of new
    accounting standards


(82,066,196
)






553,938,869



(7,474,340
)


82,024,015



546,422,348Taxes and duties










622,694,255



4,180,207







626,874,462Cumulative effect of adoption of new accounting standards


(481,068
)






(1,241,427
)


(183,373
)






(1,905,868
)Net (loss) income for the year

Ps.
(82,547,264
)

Ps.



Ps.
(69,996,813
)

Ps.
(11,837,920
)

Ps.
82,024,015


Ps.
(82,357,982
)     (1)
    
    Petróleos Mexicanos is the
    issuer of the registered debt securities shown in Table 2 above
    and a full and unconditional guarantor of the registered debt
    securities shown in Table 1 above. The Master Trust is the
    issuer of the registered debt securities shown in Table 1 above,
    but is not an obligor on the registered debt securities shown in
    Table 2 above. The Subsidiary Guarantors are full and
    unconditional guarantors of the registered debt securities
    listed in both Table 1 and Table 2 above. F-91




---



##### 








PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS(Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
    in thousands of U.S. dollars or other currency units, except
    exchange rates and oil prices per barrel)
  SUPPLEMENTAL
    CONDENSED CONSOLIDATING FINANCIAL INFORMATION
    U.S. GAAP RECONCILIATION OF INCOME
    For the year ended December 31, 2005
  Petróleos





Subsidiary


Non-Guarantor





PEMEXMexicanos(1)


Master
    Trust(1)


Guarantors(1)


Subsidiaries


Eliminations


ConsolidatedNet (loss) income under Mexican FRS


(Ps.82,547,264
)

Ps.




(Ps. 69,996,813
)


(Ps. 11,837,920
)


Ps. 82,024,015



(Ps. 82,357,982
)U.S. GAAP adjustments:Exploration and drilling costs










(1,549,819
)










(1,549,819
)Pension and seniority premiums


161,589







757,723



93,145







1,012,457Post-retirement benefits


437,766







2,641,111



296,343







3,375,220Accrued vacation


(2,343
)






(12,697
)


(1,672
)






(16,712
)Fixed asset adjustments:Capitalized gains (losses) of hedging financial instruments, net










(8,445,996
)










(8,445,996
)Capitalization of interests, net


12,550







1,660,006



255,716







1,928,272Impairment, net










2,381,679



3,865,308







6,246,987Depreciation convention


9,848







758,517



14,779







783,144Derivative financial instruments


(833,939
)


(4,214,796
)


5,333,327



746,281







1,030,873Profit in inventory










(2,776,119
)










(2,776,119
)Available-for-sale securities


(830,179
)


















(830,179
)Deferred income taxes










442,668











442,668Effect of inflation accounting onU.S. GAAP adjustment


190,371







14,586



1,923







206,880Reclassification of Pemex Finance net income to minority interest














1,159,233







1,159,233Investments in subsidiaries


3,421,246















(3,421,246
)


Total U.S. GAAP adjustments


2,566,909



(4,214,796
)


1,204,986



6,431,056



(3,421,246
)


2,566,909Net (loss) income for the year


(Ps.79,980,355
)

(Ps.
4,214,796
)


(Ps. 68,791,827
)

Ps.
(5,406,864
)

Ps.
78,602,769



(Ps. 79,791,073
)     (1)
    
    Petróleos Mexicanos is the
    issuer of the registered debt securities shown in Table 2 above
    and a full and unconditional guarantor of the registered debt
    securities shown in Table 1 above. The Master Trust is the
    issuer of the registered debt securities shown in Table 1 above,
    but is not an obligor on the registered debt securities shown in
    Table 2 above. The Subsidiary Guarantors are full and
    unconditional guarantors of the registered debt securities
    listed in both Table 1 and Table 2 above. F-92




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS(Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
    in thousands of U.S. dollars or other currency units, except
    exchange rates and oil prices per barrel)




SUPPLEMENTAL
    CONDENSED CONSOLIDATING FINANCIAL INFORMATION
    STATEMENT OF CASH
    FLOW(1)For the year ended December 31, 2007




|                                                                                                        |  |              |                 |   |                     |     |              |               |  |  |                |   |  |              |                |   |              |     |                |   |  |     |                 |  
|------------------------------------------------------------------------------------------------------- |  | ------------ | --------------- | - | ------------------- | --- | ------------ | ------------- |  |  | -------------- | - |  | ------------ | -------------- | - | ------------ | --- | -------------- | - |  | --- | --------------- | -
|                                                                                                        |  | Petróleos    |                 |   |                     |     |              | Subsidiary    |  |  | Non-Guarantor  |   |  |              |                |   | PEMEX        |    
|                                                                                                        |  | Mexicanos(2) |                 |   | Master
    Trust(2) |     |              | Guarantors(2) |  |  | Subsidiaries   |   |  | Eliminations |                |   | Consolidated |    
|                                                                                                       
|Operating activities                                                                                    |  |              |                 |   |                     |     |              |               |  |  |                |   |  |              |                |   |              |     |                |   |  |     |                 |  
|Net income (loss) for the year                                                                          |  |              | (Ps. 19,570,485 | ) |                     | Ps. |             |               |  |  | (Ps.20,729,059 | ) |  |              | (Ps. 7,988,708 | ) |              |     | (Ps.29,980,683 | ) |  |     | (Ps. 18,307,569 | )
|Adjustments to reconcile net income (loss) to cash provided by
    operating activities                 |  |              |                 |   |                     |     |              |               |  |  |                |   |  |              |                |   |              |     |                |   |  |     |                 |  
|Depreciation and amortization                                                                           |  |              | 639,866         |   |                     |     |             |               |  |  | 70,860,006     |   |  |              | 1,091,846      |   |              |     |               |   |  |     | 72,591,718      |  
|Reserve for retirement payments, pensions and seniority premiums                                        |  |              | 12,742,593      |   |                     |     |             |               |  |  | 64,195,411     |   |  |              | 8,368,862      |   |              |     |               |   |  |     | 85,306,866      |  
|Loss on disposal of fixed assets                                                                        |  |              | 33,101          |   |                     |     |             |               |  |  | 9,752,826      |   |  |              | 265,512        |   |              |     |               |   |  |     | 10,051,439      |  
|Allowance for uncollectible trade accounts                                                              |  |              | (111            | ) |                     |     |             |               |  |  | (1,039,524     | ) |  |              | (46,722        | ) |              |     |               |   |  |     | (1,086,357      | )
|Allowance for decline in the value of inventory                                                         |  |              | (46,625         | ) |                     |     |             |               |  |  | (94,928        | ) |  |              | (45,151        | ) |              |     |               |   |  |     | (186,704        | )
|Conversion effect                                                                                       |  |              |                 |   |                     |     |             |               |  |  |               |   |  |              |               |   |              |     |               |   |  |     |                |  
|Foreign exchange loss (gain)                                                                            |  |              | 658,970         |   |                     |     | 3,668,150    |               |  |  |               |   |  |              | (8,656         | ) |              |     |               |   |  |     | 4,318,464       |  
|Accrued interest                                                                                        |  |              | (338,113        | ) |                     |     | 4,193,183    |               |  |  | 24,426         |   |  |              | 727,893        |   |              |     |               |   |  |     | 4,607,389       |  
|Equity in earning in investees less dividend received and other                                         |  |              | 29,980,683      |   |                     |     |             |               |  |  |                |   |  |              | (5,533,058     | ) |              |     | (29,980,683    | ) |  |     | (5,533,058      | )
|Gain from monetary position                                                                             |  |              | (11,040,864     | ) |                     |     |             |               |  |  | (3,469,158     | ) |  |              | 1,643,735      |   |              |     |               |   |  |     | (12,866,287     | )
|Deferred income taxes                                                                                   |  |              |                 |   |                     |     |             |               |  |  | 1,867,292      |   |  |              | 27,414         |   |              |     |               |   |  |     | 1,894,706       |  
|Changes in operating assets and liabilities                                                             |  |              |                 |   |                     |     |              |               |  |  |                |   |  |              |                |   |              |     |                |   |  |     |                 |  
|Accounts and notes receivable                                                                           |  |              | 21,799,646      |   |                     |     | 1,315,383    |               |  |  | (35,391,122    | ) |  |              | (13,975,332    | ) |              |     |               |   |  |     | (26,251,425     | )
|Inter-company changes and deductions                                                                    |  |              | 372,417,508     |   |                     |     | 2,375,374    |               |  |  | (230,977,862   | ) |  |              | 17,875,996     |   |              |     | (161,691,016   | ) |  |     |                |  
|Inventories                                                                                             |  |              | 155,330         |   |                     |     | 7,654        |               |  |  | (10,154,825    | ) |  |              | (4,659,156     | ) |              |     |               |   |  |     | (14,650,997     | )
|Other assets                                                                                            |  |              | 281,816         |   |                     |     |             |               |  |  | 288,350        |   |  |              | 649,381        |   |              |     |               |   |  |     | 1,219,547       |  
|Accounts payable and accrued
    liabilities(3)                                                         |  |              | (668,839        | ) |                     |     | 1,307,046    |               |  |  | 96,944,710     |   |  |              | 8,870,377      |   |              |     |               |   |  |     | 106,453,294     |  
|Retirement, seniority premiums and other post-retirement
    benefits contributions and
    payments(3) |  |              | (4,951,499      | ) |                     |     |             |               |  |  | (21,412,162    | ) |  |              | (1,353,883     | ) |              |     |               |   |  |     | (27,717,544     | )
|                                                                                                        |  |              |                 |   |                     |     |              |               |  |  |                |   |  |              |                |   |              |     |                |   |  |     |                 |  
|Cash flows provided by (used in) operating activities                                                   |  |              | 402,092,977     |   |                     |     | 12,866,790   |               |  |  | (79,335,619    | ) |  |              | 5,910,350      |   |              |     | (161,691,016   | ) |  |     | 179,843,482     |  
|Investing activities:                                                                                   |  |              |                 |   |                     |     |              |               |  |  |                |   |  |              |                |   |              |     |                |   |  |     |                 |  
|Increase in fixed assets, net                                                                           |  |              | (331,786        | ) |                     |     |             |               |  |  | (131,384,646   | ) |  |              | (986,862       | ) |              |     |               |   |  |     | (132,703,294    | )
|Inter-company (increase) decrease in investments                                                        |  |              | (187,467,741    | ) |                     |     | (113,704,714 | )             |  |  | 161,051,930    |   |  |              | (5,397,631     | ) |              |     | 145,518,156    |   |  |     |                |  
|Investments in Subsidiaries                                                                             |  |              | (3,297,964      | ) |                     |     |              |               |  |  | 771,494        |   |  |              | 3,283,315      |   |              |     | 889,766        |   |  |     | 1,646,611       |  
|                                                                                                        |  |              |                 |   |                     |     |              |               |  |  |                |   |  |              |                |   |              |     |                |   |  |     |                 |  
|Cash flows (used in) provided by investing activities                                                   |  |              | (191,097,491    | ) |                     |     | (113,704,714 | )             |  |  | 30,438,778     |   |  |              | (3,101,178     | ) |              |     | 146,407,922    |   |  |     | (131,056,683    | )
|Financing
    Activities(1)                                                                             |  |              |                 |   |                     |     |              |               |  |  |                |   |  |              |                |   |              |     |                |   |  |     |                 |  
|Proceeds from long term financing                                                                       |  |              | 51,509,770      |   |                     |     | 59,731,700   |               |  |  | 6,316,360      |   |  |              |               |   |              |     |               |   |  |     | 117,557,830     |  
|Financing payments                                                                                      |  |              | (64,163,753     | ) |                     |     | (106,625,310 | )             |  |  | (1,316,313     | ) |  |              | (22,823,340    | ) |              |     |               |   |  |     | (194,928,716    | )
|Inter-company (decrease) increase in financing                                                          |  |              | (216,111,281    | ) |                     |     | 145,073,451  |               |  |  | 44,700,132     |   |  |              | 10,163,426     |   |              |     | 16,174,272     |   |  |     |                |  
|Increase in equity of subsidiary entities                                                               |  |              | 11,160,824      |   |                     |     |             |               |  |  |               |   |  |              |               |   |              |     |               |   |  |     | 11,160,824      |  
|Minimum guaranteed dividends paid to the Mexican Government                                             |  |              | (263,329        | ) |                     |     |             |               |  |  |               |   |  |              | 891,178        |   |              |     | (891,178       | ) |  |     | (263,329        | )
|                                                                                                        |  |              |                 |   |                     |     |              |               |  |  |                |   |  |              |                |   |              |     |                |   |  |     |                 |  
|Cash flows (used in) provided by financing activities                                                   |  |              | (217,867,769    | ) |                     |     | 98,179,841   |               |  |  | 49,700,179     |   |  |              | (11,768,736    | ) |              |     | 15,283,094     |   |  |     | (66,473,391     | )
|                                                                                                        |  |              |                 |   |                     |     |              |               |  |  |                |   |  |              |                |   |              |     |                |   |  |     |                 |  
|Effects of inflation on cash and cash equivalents                                                       |  |              | (4,821,242      | ) |                     |     | (821,717     | )             |  |  | (107,863       | ) |  |              | (1,341,803     | ) |              |     |               |   |  |     | (7,092,625      | )
|                                                                                                        |  |              |                 |   |                     |     |              |               |  |  |                |   |  |              |                |   |              |     |                |   |  |     |                 |  
|Increase (decrease) in cash and cash equivalents                                                        |  |              | (11,693,525     | ) |                     |     | (3,479,800   | )             |  |  | 695,475        |   |  |              | (10,301,367    | ) |              |     |               |   |  |     | (24,779,217     | )
|Cash and cash equivalents, beginning of period                                                          |  |              | 133,079,873     |   |                     |     | 22,681,704   |               |  |  | 2,977,334      |   |  |              | 37,037,546     |   |              |     |               |   |  |     | 195,776,457     |  
|                                                                                                        |  |              |                 |   |                     |     |              |               |  |  |                |   |  |              |                |   |              |     |                |   |  |     |                 |  
|Cash and cash equivalents, end of period                                                                |  | Ps.          | 121,386,348     |   |                     | Ps. | 19,201,904   |               |  |  | Ps. 3,672,809  |   |  |              | Ps. 26,736,179 |   |              | Ps. |               |   |  | Ps. | 170,997,240     |  
|                                                                                                        |  |              |                 |   |                     |     |              |               |  |  |                |   |  |              |                |   |              |     |                |   |  |     |                 |  







|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | The accompanying cash flow is
    prepared in accordance with Mexican FRS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|   
|(2) |  | Petróleos Mexicanos is the
    issuer of the registered debt securities shown in Table 2 above
    and a full and unconditional guarantor of the registered debt
    securities shown in Table 1 above. The Master Trust is the
    issuer of the registered debt securities shown in Table 1 above,
    but is not an obligor on the registered debt securities shown in
    Table 2 above. The Subsidiary Guarantors are full and
    unconditional guarantors of the registered debt securities
    listed in both Table 1 and Table 2 above.
|   
|   
|(3) |  | PEMEX previously reported 2007 Retirement,
    seniority premiums and other post-retirement benefit
    contributions and payments under Financing
    activities in the amount of (Ps. 27,717,544). PEMEX has corrected
    such amount under Operating activities.                                                                                                                                                                                                                                                                            







As Previously ReportedPetróleos





Subsidiary


Non-Guarantor





PEMEXMexicanos


Master Trust


Guarantors


Subsidiaries


Eliminations


ConsolidatedCash flow provided by (used in) operating activities

Ps.
407,044,476


Ps.
12,866,790


(Ps.
57,923,457
)

Ps.
7,264,233


(Ps.
161,691,016
)

Ps.
207,561,026Cash flow (used in) provided by financing activities


(222,819,268
)


98,179,841



28,288,017



(13,122,619
)


15,283,094



(94,190,935
)As CorrectedCash flow provided by (used in) operating activities


402,092,977



12,866,790



(79,335,619
)


5,910,350



(161,691,016
)


179,843,482Cash flow (used in) provided by financing activities

(Ps.
217,867,769
)

Ps.
98,179,841


Ps.
49,700,179


(Ps.
11,768,736
)

Ps.
15,283,094


(Ps.
66,473,391
)




F-93



---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS(Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and
    in thousands of U.S. dollars or other currency units, except
    exchange rates and oil prices per barrel)




SUPPLEMENTAL
    CONDENSED CONSOLIDATING FINANCIAL INFORMATION
    STATEMENT OF CASH
    FLOW(1)For the year ended December 31, 2006




|                                                                                                        |  |              |              |   |                     |     |             |               |  |     |               |   |  |              |                 |   |              |     |                 |   |  |     |              |  
|------------------------------------------------------------------------------------------------------- |  | ------------ | ------------ | - | ------------------- | --- | ----------- | ------------- |  | --- | ------------- | - |  | ------------ | --------------- | - | ------------ | --- | --------------- | - |  | --- | ------------ | -
|                                                                                                        |  | Petróleos    |              |   |                     |     |             | Subsidiary    |  |     | Non-Guarantor |   |  |              |                 |   | PEMEX        |    
|                                                                                                        |  | Mexicanos(2) |              |   | Master
    Trust(2) |     |             | Guarantors(2) |  |     | Subsidiaries  |   |  | Eliminations |                 |   | Consolidated |    
|                                                                                                       
|Operating activities                                                                                    |  |              |              |   |                     |     |             |               |  |     |               |   |  |              |                 |   |              |     |                 |   |  |     |              |  
|Net income (loss) for the year                                                                          |  | Ps.          | 48,278,809   |   |                     | Ps. |            |               |  | Ps. | 46,874,657    |   |  |              | (Ps. 11,652,424 | ) |              |     | (Ps. 36,547,837 | ) |  | Ps. | 46,953,205   |  
|Adjustments to reconcile net income (loss) to cash provided by
    operating activities                 |  |              |              |   |                     |     |             |               |  |     |               |   |  |              |                 |   |              |     |                 |   |  |     |              |  
|Depreciation and amortization                                                                           |  |              | 696,602      |   |                     |     |            |               |  |     | 64,072,741    |   |  |              | 902,846         |   |              |     |                |   |  |     | 65,672,189   |  
|Reserve for retirement payments, pensions and seniority premiums                                        |  |              | 11,441,909   |   |                     |     |            |               |  |     | 55,940,799    |   |  |              | 7,110,641       |   |              |     |                |   |  |     | 74,493,349   |  
|Impairment of fixed assets                                                                              |  |              | 0            |   |                     |     |            |               |  |     |              |   |  |              | 703,247         |   |              |     |                |   |  |     | 703,247      |  
|Loss on disposal of fixed assets                                                                        |  |              | 25,566       |   |                     |     |            |               |  |     | 2,948,752     |   |  |              | 265,697         |   |              |     |                |   |  |     | 3,240,015    |  
|Allowance for uncollectible trade accounts                                                              |  |              | 803          |   |                     |     |            |               |  |     | (53,755       | ) |  |              | 123,209         |   |              |     |                |   |  |     | 70,257       |  
|Allowance for decline in the value of inventory                                                         |  |              | (19,045      | ) |                     |     |            |               |  |     | (73,872       | ) |  |              | (57,485         | ) |              |     |                |   |  |     | (150,402     | )
|Foreign exchange loss (gain)                                                                            |  |              | 19,881       |   |                     |     | 12,892,035  |               |  |     | 646,451       |   |  |              | 408,406         |   |              |     |                |   |  |     | 13,966,773   |  
|Equity in earning in investees less dividend received and other                                         |  |              | (30,613,224  | ) |                     |     |            |               |  |     | 0             |   |  |              | (10,041,051     | ) |              |     | 36,547,837      |   |  |     | (4,106,438   | )
|Gain from monetary position                                                                             |  |              | (12,419,713  | ) |                     |     |            |               |  |     | (4,208,196    | ) |  |              | 1,808,687       |   |              |     |                |   |  |     | (14,819,222  | )
|Deferred income taxes                                                                                   |  |              |             |   |                     |     |            |               |  |     | 1,070,397     |   |  |              | (166,236        | ) |              |     |                |   |  |     | 904,161      |  
|Dismantlement and abandonment costs in fixed assets                                                     |  |              |             |   |                     |     |            |               |  |     | (1,992,048    | ) |  |              |                |   |              |     |                |   |  |     | (1,992,048   | )
|Changes in operating assets and liabilities                                                             |  |              |              |   |                     |     |             |               |  |     |               |   |  |              |                 |   |              |     |                 |   |  |     |              |  
|Accounts and notes receivable                                                                           |  |              | 6,012,026    |   |                     |     | (5,414,268  | )             |  |     | (25,452,316   | ) |  |              | 5,042,409       |   |              |     |                |   |  |     | (19,812,149  | )
|Inter-company changes and deductions                                                                    |  |              | (99,515,994  | ) |                     |     | (1,027,173  | )             |  |     | 116,167,851   |   |  |              | (80,576,615     | ) |              |     | 64,951,931      |   |  |     |             |  
|Inventories                                                                                             |  |              | (34,567      | ) |                     |     | (8,965      | )             |  |     | (8,335,597    | ) |  |              | (2,413,642      | ) |              |     |                |   |  |     | (10,792,771  | )
|Other assets                                                                                            |  |              | (1,106,629   | ) |                     |     |            |               |  |     | (101,576      | ) |  |              | 420,273         |   |              |     |                |   |  |     | (787,932     | )
|Accounts payable and accrued
    liabilities(3)                                                         |  |              | 3,629,240    |   |                     |     | (3,286,970  | )             |  |     | (17,983,763   | ) |  |              | 3,653,082       |   |              |     |                |   |  |     | (13,988,411  | )
|Retirement, seniority premiums and other post-retirement
    benefits contributions and
    payments(3) |  |              | (4,414,348   | ) |                     |     |            |               |  |     | (14,777,052   | ) |  |              | (1,812,233      | ) |              |     |                |   |  |     | (21,003,633  | )
|                                                                                                        |  |              |              |   |                     |     |             |               |  |     |               |   |  |              |                 |   |              |     |                 |   |  |     |              |  
|Cash flows provided by (used in) operating activities                                                   |  |              | (78,018,684  | ) |                     |     | 3,154,659   |               |  |     | 214,743,473   |   |  |              | (86,281,189     | ) |              |     | 64,951,931      |   |  |     | 118,550,190  |  
|Investing activities                                                                                    |  |              |              |   |                     |     |             |               |  |     |               |   |  |              |                 |   |              |     |                 |   |  |     |              |  
|Increase in fixed assets, net                                                                           |  |              | (264,788     | ) |                     |     |            |               |  |     | (100,423,287  | ) |  |              | (1,913,683      | ) |              |     |                |   |  |     | (102,601,758 | )
|Specific funds account-trade commission                                                                 |  |              | (6,599,909   | ) |                     |     |            |               |  |     |              |   |  |              |                |   |              |     |                |   |  |     | (6,599,909   | )
|Inter-company (increase) decrease in investments                                                        |  |              | (336,307,451 | ) |                     |     | (87,159,615 | )             |  |     | (293,707,153  | ) |  |              | 59,224,025      |   |              |     | 657,950,194     |   |  |     |             |  
|Investments in Subsidiaries                                                                             |  |              | (2,896,579   | ) |                     |     |            |               |  |     | (859,254      | ) |  |              | 10,386,194      |   |              |     | (11,051,854     | ) |  |     | (4,421,493   | )
|                                                                                                        |  |              |              |   |                     |     |             |               |  |     |               |   |  |              |                 |   |              |     |                 |   |  |     |              |  
|Cash flows provided by (used in) investing activities                                                   |  |              | (346,068,727 | ) |                     |     | (87,159,615 | )             |  |     | (394,989,694  | ) |  |              | 67,696,536      |   |              |     | 646,898,340     |   |  |     | (113,623,160 | )
|Financing
    Activities(1)                                                                             |  |              |              |   |                     |     |             |               |  |     |               |   |  |              |                 |   |              |     |                 |   |  |     |              |  
|Proceeds from long term financing                                                                       |  |              | 40,748,298   |   |                     |     | 117,116,030 |               |  |     |              |   |  |              | 10,845,485      |   |              |     |                |   |  |     | 168,709,813  |  
|Financing payments                                                                                      |  |              | (47,051,324  | ) |                     |     | (96,041,579 | )             |  |     |              |   |  |              | (5,188,282      | ) |              |     |                |   |  |     | (148,281,185 | )
|Inter-company (decrease) increase in financing                                                          |  |              | 518,061,228  |   |                     |     | 29,899,016  |               |  |     | 143,116,680   |   |  |              | 33,180,854      |   |              |     | (724,257,778    | ) |  |     |             |  
|Increase in equity of subsidiary entities                                                               |  |              | 13,708,017   |   |                     |     |            |               |  |     | 34,737,021    |   |  |              | 257,834         |   |              |     |                |   |  |     | 48,702,872   |  
|Minimum guaranteed dividends paid to the Mexican Government                                             |  |              | (268,990     | ) |                     |     |            |               |  |     |              |   |  |              | (12,407,507     | ) |              |     | 12,407,507      |   |  |     | (268,990     | )
|                                                                                                        |  |              |              |   |                     |     |             |               |  |     |               |   |  |              |                 |   |              |     |                 |   |  |     |              |  
|Cash flows provided by financing activities                                                             |  |              | 525,197,229  |   |                     |     | 50,973,467  |               |  |     | 177,853,701   |   |  |              | 26,688,384      |   |              |     | (711,850,271    | ) |  |     | 68,862,510   |  
|Effects of inflation on cash and cash equivalents                                                       |  |              | (8,955,456   | ) |                     |     | (2,689,606  | )             |  |     | 2,714,894     |   |  |              | 467,066         |   |              |     |                |   |  |     | (8,463,102   | )
|                                                                                                        |  |              |              |   |                     |     |             |               |  |     |               |   |  |              |                 |   |              |     |                 |   |  |     |              |  
|Increase (decrease) in cash and cash equivalents                                                        |  |              | 92,154,362   |   |                     |     | (35,721,095 | )             |  |     | 322,374       |   |  |              | 8,570,797       |   |              |     |                |   |  |     | 65,326,438   |  
|Cash and cash equivalents, beginning of period                                                          |  |              | 40,925,511   |   |                     |     | 58,402,799  |               |  |     | 2,654,960     |   |  |              | 28,466,749      |   |              |     |                |   |  |     | 130,450,019  |  
|                                                                                                        |  |              |              |   |                     |     |             |               |  |     |               |   |  |              |                 |   |              |     |                 |   |  |     |              |  
|Cash and cash equivalents, end of period                                                                |  | Ps.          | 133,079,873  |   |                     | Ps. | 22,681,704  |               |  | Ps. | 2,977,334     |   |  | Ps.          | 37,037,546      |   |              | Ps. |                |   |  | Ps. | 195,776,457  |  
|                                                                                                        |  |              |              |   |                     |     |             |               |  |     |               |   |  |              |                 |   |              |     |                 |   |  |     |              |  





|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | The accompanying cash flow is
    prepared in accordance with Mexican FRS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|   
|(2) |  | Petróleos Mexicanos is the
    issuer of the registered debt securities shown in Table 2 above
    and a full and unconditional guarantor of the registered debt
    securities shown in Table 1 above. The Master Trust is the
    issuer of the registered debt securities shown in Table 1 above,
    but is not an obligor on the registered debt securities shown in
    Table 2 above. The Subsidiary Guarantors are full and
    unconditional guarantors of the registered debt securities
    listed in both Table 1 and Table 2 above
|   
|   
|(3) |  | PEMEX has broken out the line item
    Accounts payable and accrued liabilities within Operating
    activities to separately disclose the amounts of its retirement,
    seniority premiums and other post-retirement benefit
    contributions and payments during 2006.                                                                                                                                                                                                                                                                     

F-94



---



##### 





PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  NOTE 23  SUPPLEMENTARY
    INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES
    (UNAUDITED)
      Capitalized costs for oil and gas producing activities
    (unaudited)
  As of December 31,2007


2006


2005Proved properties

Ps.
954,798,041


Ps.
844,858,923


Ps.
739,325,338Construction in progress


50,804,000



56,714,624



56,736,361Accumulated depreciation and amortization


(405,777,786
)


(383,800,878
)


(330,177,167
)Net capitalized costs

Ps.
599,824,255


Ps.
517,772,669


Ps.
465,884,532   Costs incurred for oil and gas property exploration and
    development activities (unaudited):
  Year Ended December 31,2007


2006


2005Exploration

Ps.
15,133,406


Ps.
12,572,748


Ps.
15,742,112Development


100,790,721



88,196,418



80,924,293Total costs incurred

Ps.
115,924,127


Ps.
100,769,166


Ps.
96,666,405        F-95




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  Results
    of operations for oil and gas producing activities
    (unaudited):
  Year Ended December 31,2007


2006


2005Revenues from sale of oil and gas

Ps.
912,229,890


Ps.
889,945,219


Ps.
773,336,700Hydrocarbon duties


663,069,892



583,210,826



534,532,678Excess-gains taxes






8,223,820



60,869,738Production costs (excluding taxes)


82,715,955



75,665,272



76,855,383Other costs and expenses


24,200,433



38,066,615



52,545,754Exploration expenses


4,975,089



5,248,601



5,612,993Depreciation, depletion, amortization and accretion


56,843,298



49,430,936



40,460,252831,804,667



759,846,070



770,876,798Results of operations for oil and gas  producing activities

Ps.
80,425,223


Ps.
130,099,149


Ps.
2,459,902   Crude oil
    and natural gas reserves:
  Sales
    prices and production costs (unaudited)
    2007


2006


2005Weighted average sales price per barrel of oil
    equivalent(1)

U.S.$
69.49


U.S.$
43.39


U.S.$
43.75Crude oil, per barrel

U.S.$
83.43


U.S.$
47.97


U.S.$
47.04Natural gas, per thousand cubic feet

U.S.$
6.59


U.S.$
6.04


U.S.$
6.85     (1)
    
    To convert dry gas to barrel of oil
    equivalent, a factor is used of 5.201 thousand cubic feet of dry
    gas per barrel of oil.  Crude oil
    and natural gas reserves (unaudited)
      Ordinary Hydrocarbon Duty 2012-2032
 F-96




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
    Duty on hydrocarbons for the stabilization fund of the
    petroleum incomes
  Duty for the scientific and technological research fund on
    matter of energy 2012-2032
  Duty for the petroleum fiscalization
  i.e
            Rule 4-10(a) Regulation S-X
 F-97




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  Crude Oil
    and Condensate Reserves (including natural gas
    liquids)(1)
  (In millions of barrels)2007


2006


2005Proved developed and undeveloped reservesAt January 1


12,849



13,671



14,803Revisions(2)


455



425



165Extensions and discoveries


150



86



57Production


(1,268
)


(1,332
)


(1,354
)At December 31


12,187



12,849



13,671Proved developed reserves at December 31


8,436



8,978



9,617     Note:
  (1)
    
    Crude oil and condensate reserves
    include the fraction of liquefiable hydrocarbons recoverable in
    natural gas processing plants.(2)
    
    Revisions include positive and
    negative changes due to new data gathered through drilling of
    wells and reservoir performance Source: Pemex-Exploration and Production.
  Dry Gas
    Reserves(1)
  (In billions of cubic feet)2007


2006


2005Proved developed and undeveloped reservesAt January 1


13,856



14,557



14,807Revisions(2)


879



280



640Extensions and discoveries


171



505



415Production(3)


(1,744
)


(1,487
)


(1,305
)At December 31


13,162



13,856



14,557Proved developed reserves at December 31


8,163



8,688



8,888     Note:
    
    Numbers may not total due to
    rounding.(1)
    
    To convert dry gas to barrel of oil
    equivalent, a factor is used of 5.201 thousand cubic feet dry
    gas per barrel of oil(2)
    
    Revisions include positive and
    negative changes due to new data gathered through drilling of
    wells and reservoir performance.(3)
    
    Production refers to dry gas,
    although natural gas production reported in other tables refers
    to sour wet gas. There is shrinkage in volume when natural gas
    liquids and impurities are extracted to obtain dry gas.
    Therefore, reported natural gas volumes are greater than dry gas
    volumes. Source: Pemex-Exploration and Production.
   F-98




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
  Standardized
    measure of discounted future net cash flows related to proved
    oil and gas reserves (unaudited)
             Standardized
    measure of discounted net cash flows
  As of December 31,2007


2006


2005Future cash inflows

U.S.$
945,566


U.S.$
615,337


U.S.$
653,914Future production costs (excluding taxes)


(107,148
)


(82,696
)


(85,432
)Future development costs


(38,205
)


(35,845
)


(35,966
)Future cash flows before tax


800,213



496,797



532,516Future
    production-and-excess-gains
    taxes


(632,321
)


(410,021
)


(448,162
)Future net cash flows


167,892



86,775



84,354Effect of discounting net cash flows at 10%


(78,074
)


(31,699
)


(32,728
)Standardized measure of discounted future net cash flows

U.S.$
89,818


U.S.$
55,076


U.S.$
51,626     Note:
    
    Table amounts may not total due to
    rounding. F-99




---



##### 



PETRÓLEOS
    MEXICANOS, SUBSIDIARY ENTITIES AND SUBSIDIARY COMPANIES
    NOTES TO THE CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
    (Figures stated in thousands of Mexican pesos as of
    December 31, 2007 purchasing power and in thousands of
    U.S. dollars or other currency units, except exchange rates and
    oil prices per barrel)
     Changes
    in standardized measure of discounted net cash flows
  2007


2006


2005Sales of oil and gas produced, net of production costs

U.S.$
(74,299
)

U.S.$
(68,136
)

U.S.$
(55,988
)Net changes in prices and production costs


173,861



2,908



122,257Extensions and discoveries


6,642



4,573



3,149Development cost incurred during the year


8,951



7,803



7,067Changes in estimated development costs


(14,634
)


(6,796
)


(11,453
)Reserves revisions and timing changes


29,947



14,910



3,419Accretion of discount of pre-tax net cash flows


26,446



28,482



20,523Net changes in
    production-and-excess-gains
    taxes


(122,172
)


19,707



(83,972
)Aggregate change in standardized measure

U.S.$
34,742


U.S.$
3,450


U.S.$
5,002Standardized measureAs of January 1


55,076



51,626



46,624As of December 31


89,818



55,076



51,626Change

U.S.$
34,742


U.S.$
3,450


U.S.$
5,002     Note:
    
    Table amounts may not total due to
    rounding.   F-100