##### Table of Contents



As filed with the Securities and Exchange Commission on
    July 2, 2007
    UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington,
    D.C. 20549
 Form 20-F
  (Mark One)o

Registration Statement pursuant to Section 12(b) or (g) of
    the Securities Exchange Act of 1934þ

Annual Report pursuant to
    Section 13 or 15(d) of the Securities Exchange Act of 1934For the fiscal year ended
    December 31, 2006o

Transition Report pursuant to
    Section 13 or 15(d) of the Securities Exchange Act of 1934o

Shell Company Report pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934Date of Event requiring this Shell Company ReportFor the transition period from
    
    to   No. 333-10920-01
 Pemex Finance Ltd.
  (Exact name of Registrant as
    specified in its charter)
 Cayman Islands
  (Jurisdiction of incorporation or
    organization)
  BNP Paribas
 Private Bank &
    Trust
 Cayman Limited
 P.O. Box 10632APO
 4th Floor
 Piccadilly Centre
 Grand Cayman
 Cayman Islands
 (353)1542-6914
   (Address of principal executive
    offices)
  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:
  $350,000,000 8.02% Notes due
    2007

$200,000,000 10.61% Notes due
    2017$600,000,000 9.69% Notes due
    2009

$250,000,000 9.15% Notes due
    2018$200,000,000 8.875% Notes due
    2010

$100,000,000 Floating Rate
    Notes, Series A, due 2014$800,000,000 9.03% Notes due
    2011

$90,000,000 Floating Rate Notes,
    Series B, due 2014    Indicate the number of outstanding shares of each of the
    issuers classes of capital or common stock as of the close
    of the period covered by the annual report. 1,000 ordinary
    shares.
  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.
 Large accelerated
    filer o          Accelerated
    filer o          Non-accelerated
    filer þ
  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
  (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
    PROCEEDINGS DURING THE PAST FIVE YEARS)
  Indicate by check mark whether the registrant has filed all
    documents and reports required to be filed by Sections 12,
    13 or 15(d) of the Securities Exchange Act of 1934 subsequent to
    the distribution of securities under a plan confirmed by a
    court.
 o Yes     o No




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##### 



TABLE OF
    CONTENTS
   
 PageItem 1.


Identity of
    Directors, Senior Management, and Advisers


4Item 2.


Offer Statistics
    and Expected Timetable


4Item 3.


Key
    Information


4Item 4.


Information on the
    Company


16Item 5.


Operating and
    Financial Review and Prospects


75Item 6.


Directors, Senior
    Management and Employees


83Item 7.


Major Shareholders
    and Related Party Transactions


85Item 8.


Financial
    Information


85Item 9.


The Offer and
    Listing


85Item 10.


Additional
    Information


86Item 11.


Quantitative and
    Qualitative Disclosures About Market Risk


91Item 12.


Description of
    Securities Other than Equity Securities


91Item 13.


Defaults, Dividend
    Arrearages and Delinquencies


91Item 14.


Material
    Modifications to the Rights of Security Holders and Use of
    Proceeds


91Item 15.


Controls and
    Procedures


91Item 16.


[Reserved]


92Item 16A.


Audit Committee
    Financial Expert


92Item 16B.


Code of
    Ethics


92Item 16C.


Principal
    Accountant Fees and Services


92Item 16D.


Exemptions from the
    Listing Standards for Audit Committees


92Item 16E.


Purchases of Equity
    Securities by the Issuer and Affiliated Purchasers


92Item 17.


Financial
    Statements


92Item 18.


Financial
    Statements


93Item 19.


Exhibits


93EX-12.1: CERTIFICATIONEX-13.1: CERTIFICATION   i




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INCORPORATION
    OF CERTAIN DOCUMENTS BY REFERENCE
  Form 20-F
  CERTAIN
    DEFINED TERMS AND CONVENTIONS
    FACTORS
    AFFECTING FORWARD LOOKING STATEMENTS
  Form 20-F
    Form 20-F
  CURRENCY
    OF PRESENTATION
   2




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nuevo peso
   3




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##### Table of Contents



Item 1.
    Identity
    of Directors, Senior Management, and Advisers.    Item 2.
    Offer
    Statistics and Expected Timetable.    Item 3.
    Key
    Information.  SELECTED
    FINANCIAL DATA
      Year Ended December 31,2002


2003


2004


2005


2006(in thousands of U.S. dollars)Income Statement
    Data(1)Revenues

$
493,409


$
459,001


$
432,003


$
316,638


$
232,608Interest expense


(466,173
)


(440,379
)


(414,290
)


(317,906
)


(225,344
)Make-whole premium














(96,377
)General and administrative expenses


(1,230
)


(1,550
)


(1,578
)


(2,781
)


(2,446
)Net (loss) income

$
26,006


$
17,072


$
16,135


$
(100,426
)

$
4,4818     (1)
    
    Amounts are the same when
    calculated under both IFRS and U.S. GAAP.  4




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As of December 31,2002


2003


2004


2005


2006(in thousands of U.S. dollars)Balance Sheet
    Data(1)Cash and cash equivalents and
    liquidity account

$
253,001


$
222,076


$
234,651


$
304,250


$
209,216Current purchased accounts
    receivable


874,989



1,015,135



1,108,076



1,570,539



1,557,388Rights to future (ungenerated)
    purchased accounts receivable


4,113,835



3,690,179



3,253,658



821,655



541,075Total assets


5,241,830



4,927,405



4,596,388



2,696,470



2,307,687Current liabilities


373,341



387,033



379,897



416,443



409,464Long-term debt


4,676,355



4,331,167



3,991,151



2,155,113



1,768,491Total liabilities


5,049,696



4,718,200



4,371,048



2,571,556



2,177,955Capital stock


1



1



1



1



1Total shareholders equity


192,133



209,205



225,340



124,914



129,732Total liabilities and
    shareholders equity

$
5,241,830


$
4,927,405


$
4,596,388


$
2,696,470


$
2,307,687     (1)
    
    Amounts are calculated under IFRS.  As of December 31,2002


2003


2004


2005


2006(in thousands of U.S. dollars)Balance Sheet
    Data(1)Current purchased accounts
    receivable


878,700



1,019,113



1,112,965



1,577,055



1,564,659Debt issuance costs


1,121



434



363



172



128Total assets


5,246,662



4,931,817



4,601,641



2,703,157



2,315,086Current liabilities


378,174



391,444



385,150



423,130



416,863Total liabilities


5,054,529



4,722,611



4,376,301



2,578,243



2,185,354Total liabilities and
    shareholders equity


5,246,662



4,931,817



4,601,641



2,703,157



2,315,086     (1)
    
    Amounts are calculated under U.S.
    GAAP. Unless otherwise indicated, all other amounts are the same
    when calculated under both IFRS and U.S. GAAP. 5




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RISK
    FACTORS
  We are subject to various changing economic and social
    conditions, including in the petroleum industry, as described
    below. You should consider carefully the following factors as
    well as the other information in this annual report.
  Risks
    Related to Payments on the Notes
  Our
    ability to make payments on the Notes depends on PEMEXs
    generation of sufficient eligible receivables.
      
    whether the designated customers buy enough of PEMEXs
    crude oil; and
    whether PEP can maintain sufficient production levels.  The designated customers may reduce the amount of
    crude oil they purchase.
  
    changes in the market for that designated customers
    products,
    a decision to purchase crude oil from an alternate
    source, or  
    a deterioration in the customers business or financial
    condition.      PEP may not produce sufficient crude oil to permit
    the creation of enough eligible
    receivables.
 6




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If
    collections on purchased receivables are held in the retention
    account, cash flow available to PEP could be reduced, which
    could hurt PEPs ability to produce oil and PMIs
    ability to generate eligible receivables.
      If PMI
    fails to generate eligible receivables we have already
    purchased, we have no recourse to PMI or PMI
    Services.
    If a
    designated customer fails to honor its payment obligations, we
    have no recourse to PMI or PMI Services.
      
    PMI sells us a receivable that fails to meet the quality
    standards specified in the receivables purchase
    agreement; or
    PMI does not comply with covenants in the receivables purchase
    agreement designed to ensure the continuity of its operations
    and its ability to sell eligible receivables on an on-going
    basis.   7




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In
    order to make payments on the Notes, we rely on the designated
    customers to make timely payments on the purchased receivables
    into the collection account.
        A
    court may not treat our purchase of eligible receivables as a
    sale or may contest our purchase, which may make it difficult
    for us to make payments on the Notes if PMI or PMI Services
    becomes insolvent or bankrupt.
      
    with the intent to hinder, delay or defraud PMI, PMI Services or
    their creditors; or
    at a time when PMI or PMI Services was insolvent, deemed
    insolvent or contemplating insolvency if the transfer were made
    without payment of a reasonable purchase price.    Treatment Under Mexican and Cayman Islands
    Law.
  
    they could treat the transfer of eligible receivables as
    assignments of collateral as security from PMI to PMI Services
    and from PMI Services to us; or
    they could treat the transfer as giving rise to an unsecured
    claim for the amounts that we paid to PMI Services, and that PMI
    Services paid to PMI. Claims for these amounts would rank
    equally in right of payment with all other unsecured obligations
    of PMI and PMI Services. Such an unsecured claim against PMI
    would be subordinate to claims of PMIs creditors preferred
    under Mexican bankruptcy law. 8




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Treatment Under Netherlands
    Law.
  Treatment Under New York
    Law.
      Risks
    Related to the Obligations of Pemex Finance, PMI Services, PMI
    and PEP
  The
    trustee may not be aware of all relevant events possibly leading
    to an event of default.
   9




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If an
    event of default occurs, holders of Notes will have recourse
    only to us and we cannot guarantee that these holders will
    receive all of the money to which they are
    entitled.
      We
    have limited control over PMI in its capacity as
    servicer.
      
    the servicing and collection agency agreement remains in
    effect, or
    any document governing the transactions described in this annual
    report requires that eligible receivables be generated, sold to
    us and collected.    Because
    we are a foreign company, holders of the Notes may not be able
    to effect service of process on, or enforce a judgment against,
    us.
   10




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
    it is final;
    the court had jurisdiction over the defendant according to
    Cayman Islands conflict of law rules;
    the judgment is conclusive and is for an amount of money which
    is not a penalty, a tax, a fine or similar obligation; and
    neither the manner in which the judgment was obtained nor the
    kind of judgment which was obtained would be contrary to natural
    justice or the public policy of the Cayman Islands.    Risks
    Related to PEMEX, PEP and PMI
  The
    Mexican Government controls PEMEX; it could limit PEMEXs
    ability to satisfy its external debt obligations, and the
    Mexican Government could privatize PEMEX.
      Constitución Política de los Estados Unidos
    Mexicanos
  Crude
    oil and natural gas prices are volatile, and low oil and natural
    gas prices negatively affect PEMEXs income.
     11




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The
    Mexican Government has entered into agreements with other
    nations to limit production.
  and/or
  The
    Mexican nation, not PEMEX, owns the hydrocarbon reserves in
    Mexico.
    Information
    on Mexicos hydrocarbon reserves is based on estimates,
    which are uncertain and subject to revisions.
  Form 20-F
  PEMEX
    is an integrated oil and gas company and is exposed to
    production, equipment and transportation risks.
    clean-up
   12




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Petróleos
    Mexicanos and the subsidiary entities pay special taxes, duties
    and dividends to the Mexican Government.
    PEMEX
    must make significant capital expenditures to maintain its
    current production levels and increase Mexicos hydrocarbon
    reserves. Mexican Government budget cuts, reductions in
    PEMEXs income and inability to obtain financing may limit
    PEMEXs ability to make capital investments.
    PEMEXs
    compliance with environmental regulations in Mexico could result
    in material adverse effects on its results of
    operations.
    PEMEX
    publishes less U.S. GAAP financial information than U.S.
    companies are required to file with the U.S. Securities and
    Exchange Commission.
    Changes
    in Mexican taxes may occur which may allow us to redeem the
    Notes without paying a premium to holders of
    Notes.
     13




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
    any change or amendment in applicable law, including Mexican law
    or its interpretation, obliges us to increase the additional
    amounts that we are required to pay on the Notes to ensure that
    the net payment received by each holder after any withholding or
    deduction for tax purposes equals the payment that would have
    been received in the absence of the withholding or
    deduction, and
    we, PMI Services, PMI, PEP or Petróleos Mexicanos, as the
    case may be, cannot avoid this obligation by taking reasonable
    available measures.  Petróleos
    Mexicanos, PEP or PMI may claim some immunities under the
    Foreign Sovereign Immunities Act and Mexican law, and your
    ability to sue or recover may be limited.
      Risks
    Related to Mexico
  Economic
    conditions and government policies in Mexico may have a material
    impact on PEMEXs and our operations.
    Changes
    in exchange rates or in Mexicos exchange control laws may
    hamper our ability to make payments on the Notes.
   14




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Political
    conditions in Mexico could materially and adversely affect
    Mexican economic policy and, in turn, PEMEXs
    operations.
    Risks
    Related to the Notes
  The
    market for the Notes may not be liquid.
    We may
    issue additional debt, which may affect the holders of Notes
    negatively.
    Actual
    Results of Our Operations May Differ From Those Contained in
    Forward-Looking Statements.
     15




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Other
    Risk Factors
  If we
    are not able to adequately implement the requirements of
    Section 404 of the Sarbanes-Oxley Act of 2002 and are the
    subject of sanctions or investigation, our results of operations
    and our ability to provide timely and reliable financial
    information may be adversely affected.
  Sarbanes-Oxley
  Item 4.
    Information
    on the Company.  DESCRIPTION
    OF BUSINESS
      345-945-9208. 10178-0061,
  Business
   16




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
    in February 1999, we issued fixed rate notes in an aggregate
    amount of U.S.$1.0 billion, which we refer to as the
    February 1999 notes, and floating rate notes in an
    aggregate amount of U.S.$100.0 million, which we refer to
    as the February 1999 floating rate notes;
    in July 1999, we issued fixed rate notes in an aggregate amount
    of U.S.$1.275 billion, which we refer to as the July
    1999 notes, and additional fixed rate and floating rate
    notes in an aggregate amount of U.S.$175 million, which we
    refer to as the July 1999 additional
    issuances; and
    in February 2000, we issued fixed rate notes in an aggregate
    amount of U.S.$950 million, which we refer to as the
    February 2000 notes.         17




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Year Ended December 31,2004


2005


2006(in thousands of U.S. dollars)Interest income from discount on
    purchased accounts receivable

$
428,800


$
304,226


$
218,278Interest income from highly liquid
    temporary investments


3,203



12,412



14,330Total revenues

$
432,003


$
316,638


$
232,608     
    compliance by PEP and PMI with their obligations under the
    transaction documents;
    the ability of PEMEX, operating through PMI and PEP, to generate
    sufficient eligible receivables of designated customers; and
    the continued financial capability of the designated customers.   18




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Summary
    of Principal Agreements and Flow of Funds
  
  
  The following summarizes the principal provisions of the
    principal agreements governing our business and the flow of
    funds; the numbers correspond to the numbers in the chart on the
    previous page. The descriptions are not in chronological order.
    See Description of Principal Agreements for a
    more detailed description of these principal agreements. See
    also the section entitled Glossary of Certain Defined
    Terms Used Primarily Under the Captions Description of the
    Principal Agreements and Description of the
    Indenture  where we define the capitalized
    terms that appear in this annual report.
   19




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The
    Principal Agreements
  The Crude Oil Sale Agreement.
  The Receivables Purchase Agreement.
  
    PEP agrees that during any 90 day period it will export at
    least 90% of its total exports of crude oil through PMI;
    PMI agrees to sell eligible receivables, including any current
    eligible receivables and eligible receivables that will be
    generated in the future, to PMI Services upon our request. PMI
    Services agrees to sell those same current and future eligible
    receivables to us contemporaneously with its purchase of them.
    The purchase price of the eligible receivables is determined on
    the basis of a discount rate calculated as set forth in the
    receivables purchase agreement;
    PMI agrees to ensure that the monthly average amount of
    designated customers eligible receivables that PMI
    generates during any consecutive twelve month period that are
    not otherwise pledged or encumbered represents at least the
    lesser of:  
    20 million barrels of Maya crude oil, and
    80% of PMIs total eligible receivables generated from
    sales of Maya crude oil;  
    We, PMI and PMI Services agree that if the monthly average
    amount of PMIs exports of Maya crude oil to designated
    customers for the six months prior to any date is less than 450
    tbpd, on our request, PMI will sell to PMI Services designated
    customers receivables generated in connection with the
    export of crude oil other than Maya crude oil, and PMI Services
    will sell them to us; and
    PEP, PMI and PMI Services agree that if PMI becomes insolvent,
    PEP will export at least 90% of its total exports of crude oil
    through PMI Services.  The Fiscal Agency Agreement.
  
    comply with specified financial covenants;
    limit our activities to the purchase of existing and future
    receivables and the issuance of debt;
    use the net proceeds of any debt we issue or other amounts we
    borrow only to purchase existing and future eligible
    receivables, service or refinance existing debt, or to cover
    permitted corporate expenses;
    establish and maintain a liquidity facility with the fiscal
    agent in an amount at least equal to the total amount of
    scheduled debt service we are next scheduled to pay under each
    of our debt agreements. We may fund the liquidity facility with
    cash, certain permitted investments, or one or more letters of
    credit. For a more detailed description, see the section
    entitled Description of Principal
    AgreementsThe Fiscal Agency AgreementLiquidity
    Facility; and
    maintain a retention account with the fiscal agent, to which the
    collection agent will transfer money that would otherwise come
    to us if one of several specified events occurs, including some 20




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agreed-upon
    events of default. For more information on events of default,
    see Description of Principal AgreementsThe
    Fiscal Agency AgreementEvents of Default. Until the
    fiscal agent notifies the collection agent to cease doing so,
    the amount it transfers to the retention account on each
    business day will be equal to either:  
    in the case of some
    agreed-upon
    events of default, 100% of all the money the designated
    customers paid into the collection account on the preceding
    business day on purchased receivables; or
    in all other cases, 25% of the difference between:  
    all the money the designated customers paid on the purchased
    receivables into the collection account on the preceding
    business day; and
    the aggregate amount of debt service we paid on the preceding
    business day, other than accelerated debt service.    The Designated Customer Notices.
  The Servicing and Collection Agency
    Agreement.
  The Subordinated Debt.
  The Letter Agreement.
    The
    Flow of Funds Under the Agreements
       21




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PMI
    Services
    Taxation
    of PMI Services
        Property,
    Plants and Equipment
    The
    Designated Customers and Eligible Receivables
    Crude
    Oil
   22




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Selection
    of the Designated Customers
            
    an officers certificate;
    a new schedule to the receivables purchase agreement listing all
    designated customers including the new customer; and
    a fully-executed copy of the designated customer notice for the
    new customer, together with an acknowledgment signed by the new
    customer acknowledging receipt of the notice.      
    listed on schedule I to the receivables purchase agreement
    as of December 1, 1998;
    a United States or Canadian entity; or 23




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
    any other customer that PMI identifies to us and we find
    reasonably acceptable. In this case, the customers
    principal assets must be located outside of Mexico. Further, at
    the time PMI identifies the customer as a designated customer,
    an opinion of counsel must be delivered to us stating, among
    other things, that the designated customer notice has been
    completed and signed by the customers authorized signatory
    and that the notice constitutes a valid, binding and enforceable
    obligation of the customer.  The
    Designated Customers
    Designated CustomerBP Products North America, Inc.Chevron U.S.A. Inc.CITGO International Supply Co.CITGO Petroleum Corp.Conoco Phillips CompanyEquiva Trading International L.L.C.Exxon Mobil Sales and Supply
    CorporationGlencore, LTDHunt Crude Oil Supply CompanyKoch Petroleum Group L.P.Koch Supply and Trading CompanyKoch Supply and Trading L.P.Lyondell-Citgo Refining L.P.Marathon Petroleum Supply L.L.C.Marlin Asphalt Ltd.Morgan Stanley Capital Group, Inc.Pecten Trading CompanyPetro-CanadaP.M.I. Norteamérica S.A. de
    C.V.Shell Canada Products LimitedShell Trading (US) CompanyTexaco International Trader, Inc.Tosco Refining CompanyTrigeant EP, Ltd.Trigeant Ltd.Ultramar, Inc.Valero Marketing and Supply Co.Valero Refining Company-Aruba N.V.Valero Refining Company-CaliforniaVitol, S.A., Inc.    24




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and/or
  Designated Customer

Total Years of
    RelationshipChevron U.S.A.
    Inc.(2)


30CITGO Petroleum
    Corp.(2)


29Conoco Phillips
    Company(2)


23Exxon Mobil Sales and Supply
    Corporation(2)


30Hunt Crude Oil Supply
    Company(2)


21Marathon Petroleum Supply
    L.L.C.(2)


26Pecten Trading
    Company(2)


31Petro-Canada(2)


27P.M.I. Norteamérica S.A. de
    C.V.(2)


14Trigeant
    Ltd.(1)


7Valero Refining CompanyAruba
    N.V.(2)


9Valero Marketing and Supply
    Co.(2)


13     (1)
    
    Purchases of Maya crude oil from
    PMI made in 2006 only.(2)
    
    Purchases of Maya crude oil from
    PMI made in 2006 and in 2007 through May 31.        The
    Eligible Receivables
   25




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
    all of PMIs rights and benefits which may arise from the
    foregoing indebtedness, payment obligation and accounts
    receivable;
    all associated accounts and general intangibles (each as defined
    under the Uniform Commercial Code as in effect in the
    jurisdiction of our chief executive offices);
    all associated contract rights;
    any related property; with respect to each receivable,
    related property means:  (a)
    PMIs interest in the crude oil it sold to the customer
    which gave rise to the receivable;  (b)
    all liens and property subject to the liens which are used to
    secure payment of the receivable, whether or not used to secure
    payment in accordance with the contract giving rise to the
    receivable. Here, and throughout this annual report, when we
    refer to property, we mean, with respect to any
    person, any interest of that person in any kind of property or
    asset, whether real, personal or mixed, or tangible or
    intangible, including, without limitation, capital stock in any
    other person. For a more complete explanation of what we mean
    when we say lien, see Description of
    Principal AgreementsThe Fiscal Agency
    AgreementCovenantsNegative Pledge;  (c)
    all guarantees, insurance, letters of credit and other
    agreements or arrangements that support or secure payment of the
    receivable, whether or not included in the contract giving rise
    to the receivable; and  (d)
    any rights or remedies arising under the contract giving rise to
    the receivable, including in the case of (b), (c) and
    (d) obligations evidenced by an account, note, instrument,
    contract, security agreement, chattel paper, general intangible
    or other evidence of indebtedness or security; and  
    all associated collections. For a more complete description of
    collections, see Description of Principal
    AgreementsThe Servicing and Collection Agency
    Agreement.    
    the final invoice on the receivable must be delivered to the
    customer no later than two days before the receivable is due and
    payable;
    upon delivery of the final invoice the receivable is an
    obligation to pay a precise sum;
    the receivable is not subject to a credit memorandum or any
    other setoff, reduction, dispute or other form of negative
    adjustment; and
    the receivable is required to be paid in full no later than
    30 days after the date of the bill of lading for the
    appropriate shipment, whether or not the receivable is actually
    paid during that period. The period may be increased to up to
    90 days if that becomes the prevailing practice in the
    international oil business.     26




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##### Table of Contents



PEMEXs
    Customers and Receivables
    Overview
        
    80.3% were to the United States,
    8.0% were to Spain,
    4.3% were to the Netherlands Antilles,
    2.0% were to Canada, and
    5.3% were to others.    
    1,198.61 tbpd were exported to the United States designated
    customers, 27




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##### Table of Contents




    24.98 tbpd were exported to the Canadian designated customers,
    and
    70.31 tbpd were exported to the Aruban designated customers.                Crude
    Oil Exports
  Base de Datos Institucional
 28




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##### Table of Contents



Source
    Year Ended December 31,2002


2003


2004


2005


2006(tbpd)


(%)


(tbpd)


(%)


(tbpd)


(%)


(tbpd)


(%)


(tbpd)


(%)Crude Oil Exports (by
    volume)Olmeca (API gravity of
    38°-39°)


245



14
%


216



12
%


221



12
%


216



12
%


231



13
%Isthmus (API gravity of
    32°-33°)


46



3



25



1



27



1



81



4



68



4Maya (API gravity of
    21°-22°)


1,398



82



1,590



86



1,608



86



1,506



83



1,480



81Altamira (API gravity
    15.0°-16.5°)


17



1



14



1



13



1



15



1



14



1Total


1,705



100
%


1,844



100
%


1,870



100
%


1,817



100
%


1,793



100
%     Notes:
    Numbers may not total due to rounding.  Source:
  Year Ended December 31,2002


2003


2004


2005


2006(U.S. dollars per barrel)Crude Oil PricesWeighted average realized price

$
21.52


$
24.78


$
31.05


$
42.71


$
53.04Olmeca


24.87



29.32



39.34



53.91



64.67Isthmus


23.48



28.08



38.04



53.11



57.29Maya


20.89



24.13



29.82



40.61



51.10Altamira


19.41



22.81



28.12



36.08



47.75     Source:
   29




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##### Table of Contents



Geographic
    Distribution of Exports
  and/or
  Exports
    by Country of Destination of Shipment
  PercentageCountry

of ExportsUnited States of America


80.3
%Spain


8.0Netherlands Antilles


4.3Canada


2.0India


1.8Others


3.5Total


100      Source:
 30




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##### Table of Contents



Composition
    and Geographic Distribution of Crude Oil Export Sales
  At December 31,2002


2003


2004


2005


2006(tbpd)


(%)


(tbpd)


(%)


(tbpd)


(%)


(tbpd)


(%)


(tbpd)


(%)PMI Crude Oil Export Sales
    to:United States and Canada


1,360



80
%


1,467



80
%


1,510



81
%


1,464



81
%


1,477



82
%Europe


181



11



176



10



178



10



194



11



171



10Central and South America


117



7



137



7



145



8



125



7



113



6Far East


47



3



63



3



36



2



34



2



32



2Africa










1



0



0



0















Total


1,705



100
%


1,844



100
%


1,870



100
%


1,817



100
%


1,793



100
%Olmeca (API gravity of
    38°-39°)United States and Canada


225



13
%


195



11
%


208



11
%


200



11
%


214



12
%Others


20



1



21



1



14



1



16



1



17



1Total


245



14
%


216



12
%


221



12
%


216



12
%


231



13
%Isthmus (API gravity of
    32°-33°)United States and Canada


29



2
%


11



1
%


6



0
%


38



2
%


41



2
%Others


17



1



14



1



22



1



43



2



27



1Total


46



3
%


25



1
%


27



1
%


81



4
%


68



4
%Maya (API gravity of
    21°-22°)United States and Canada


1,090



64
%


1,247



68
%


1,283



69
%


1,212



67
%


1,208



67
%Others


308



18



342



19



325



17



294



16



272



15Total


1,398



82
%


1,590



86
%


1,608



86
%


1,506



83
%


1,480



83
%Altamira (API gravity of
    15.0°-16.5°)United States and Canada


17



1
%


14



1
%


13



1
%


15



1
%


14



1
%Others


































1



0Total


17



1
%


14



1
%


13



1
%


15



1
%


14



1
%     Notes:
    Numbers may not total due to rounding.  Source:
  Sales
    to Designated Customers
    2004


2005


2006Exports of all types of crude oil
    to designated customers as a percentage of total exports


87.0
%


87.0
%


87.5
%Exports of Maya Crude Oil to
    designated customers as a percentage of total exports of Maya
    Crude Oil


87.1
%


86.7
%


86.6
%  31




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##### Table of Contents



2002


2003


2004


2005


2006tbpd


%


tbpd


%


tbpd


%


tbpd


%


tbpd


%PMI NASA


5



0.5
%


16



1.2
%


31



2.2
%


38



2.8
%


34



2.6
%Non-Affiliates


1,194



99.5



1,350



98.8



1,380



97.8



1,282



97.2



1,260



97.4Total


1,200



100.0
%


1,366



100.0
%


1,411



100.0
%


1,319



100.0
%


1,294



100
%       Source:
    Total
    Crude Oil Exported by Type as of December 31, 2006
    Type of Crude Oil Exported
  Isthmus


Olmeca


Maya


Altamira


Total(Millions





(Millions





(Millions





(Millions





(Millionsof U.S.





of U.S.





of U.S.





of U.S.





of U.S.(tbpd)


dollars)


(tbpd)


dollars)


(tbpd)


dollars)


(tbpd)


dollars)


(tbpd)


dollars)PMI NASA





$




4


$
97



34


$
601






$




38


$
698Third parties


68



1,428



226



5,347



1,446



26,988



14



239



1,755



34,002Total


68


$
1,428



231


$
5,443



1,480


$
27,590



12


$
239



1,793


$
34,700      Source:
    Accounts
    Receivable Purchased by Pemex Finance by Customer Affiliation
    for Designated Customers
    (Maya crude oil only)
    (as of December 31, 2006)
  Accounts Receivable(millions of U.S. dollars)Type of CustomerPMI NASA

$
0Third parties

$
1,565Total

$
1,565  32




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##### Table of Contents



PMIs
    Delinquency and Loss Experience
      Maximum Number ofYear

Days of Past Due
    Accounts1996


41997


71998


51999


32000


42001


42002


72003


62004


42005


52006


3     Average
    Delinquencies
    
    the high credit quality of its portfolio of customers,
    PMIs contract terms and conservative credit policies, and
    the relatively high interest rate and administrative charges
    (Prime rate plus 6%, not compounded) which PMI charges as a
    penalty on delinquent payments.     33




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##### Table of Contents



P.M.I.
    Comercio Internacional, S.A. de C.V.
    Historic Aging
    Schedule(1)(by quarter)
  Sales During


Past Due at End of Period IndicatedQuarter


01-30


31-60


61-90


91-120


>120(millions of U.S. dollars)2002March 31


2,312.68



2,312.68















June 30


3,293.27



3,293.27















September 30


3,480.18



3,480.18















December 31


3,726.32



3,726.32















2003March 31


4,527.50



4,527.50















June 30


3,453.20



3,453.20















September 30


4,308.23



4,308.23















December 31


4,073.31



4,073.31















2004March 3l


4,513.82



4,513.82















June 30


4,949.75



4,949.75















September 30


5,340.55



5,340.55















December 31


6,391.54



6,391.54















2005March 3l


5,197.96



5,197.96















June 30


6,568.33



6,568.33















September 30


7,762.52



7,762.52















December 31


7,878.09



7,878.09















2006March 3l


8,556.60



8,556.60















June 30


9,376.92



9,376.92















September 30


9,224.72



9,224.72















December 31


7,754.57



7,754.57















     (1)
    
    All designated customers have
    30 days from the bill of lading to pay each invoice.  Source:
  Credit
    and Collection Policies
  Credit
    Approval Process
    
    from an open account,
    through a letter of credit, or
    with advance payments. 34




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##### Table of Contents




    granting a client the right to pay through the open account
    method;
    deciding to require a client who currently pays through an open
    account to use another alternative;
    increasing line of credit limits;
    accepting new clients without an investment grade rating
    assigned by Standard & Poors or Moodys; and
    canceling existing lines of credit.      Contract
    Terms and Conditions
  free-on-board
   35




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##### Table of Contents



Monitoring
    of Existing Accounts
    Marketing
      Sales to Affiliates.
  Sales to Third Parties.
  DESCRIPTION
    OF PRINCIPAL AGREEMENTS
     36




---



##### Table of Contents



Form F-4 no. 333-10920) Form F-4 no. 333-12614).
  th
    The
    Receivables Purchase Agreement
    
    PMI Services has the right to purchase, upon our request and in
    the amount we specify, eligible receivables of designated
    customers from PMI;
    PMI sells to PMI Services all its present and future right,
    title and interest in, to and under eligible receivables of
    designated customers that have been generated and will be
    generated by PMI, without recourse (except as specified under
    Substitution and Repurchase of Receivables
    below);
    we have the right to purchase eligible receivables of designated
    customers from PMI Services; and
    PMI Services sells to us all its present and future right, title
    and interest in, to and under eligible receivables of designated
    customers generated and to be generated by PMI, without recourse
    (except as specified under Substitution and
    Repurchase of Receivables below).    plus
 37




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##### Table of Contents



Representations
    and Warranties
    
    each designated customer has executed a designated customer
    notice acknowledging that it has received notice that it should
    make payments on the purchased receivables into the collection
    account described in The Servicing and Collection
    Agency Agreement;
    each purchased receivable and designated customer notice of a
    designated customer is the legal, valid and binding obligation
    of that designated customer;
    upon completion of any sale of eligible receivables to us under
    the receivables purchase agreement and attachment of our
    ownership interest in those receivables, we will have a
    perfected ownership interest in those purchased receivables;
    each purchased receivable has been generated in compliance with
    applicable law; and
    PMI Services will have all of PMIs right, title and
    interest in the purchased receivables free and clear of any lien
    attributable to PMI.    Covenants
        
    it will use the proceeds of any sale of eligible receivables to
    us to purchase eligible receivables from PMI; 38




---



##### Table of Contents




    it will not incur any lien, directly or indirectly (other than
    certain permitted liens, as described inThe Fiscal
    Agency AgreementCovenantsNegative Pledge) on
    or with respect to any of its property to secure any
    Indebtedness; and
    it will not (1)engage in any business other than the acquisition
    and sale of eligible receivables, the other transactions
    contemplated by the transaction documents, and any activity
    incidental, necessary or convenient to accomplish those
    transactions, or (2)enter into or be a party to any other
    agreement or instrument, except that PMI Services may borrow
    funds on a subordinated basis from any of its Affiliates in
    accordance with the transaction documents.    
    upon generation of any eligible receivable of designated
    customers for which the purchase price has been paid to PMI,
    promptly to identify, or cause the Servicer to identify, this
    receivable as sold to PMI Services and subsequently to us;
    to keep as shall be reasonable appropriate records, maintain and
    implement adequate administrative and operating procedures and
    permit our representatives to examine the documentation relating
    to the generation, sale, administration and collection of
    purchased receivables;
    with some exceptions, to cause the monthly average amount of
    eligible receivables of designated customers that are generated
    by PMI during any consecutive twelve month period and that are
    not subject to any encumbrance other than as provided under the
    receivables purchase agreement to represent at least the lesser
    of:  
    20 million barrels of Maya crude oil; and
    80% of PMIs total eligible receivables generated from
    sales of Maya crude oil;  
    to add one or more new designated customers in the event that
    the monthly average amount of PMIs exports of Maya crude
    oil to customers which are not designated customers incorporated
    in the United States, Canada or Aruba exceeds 40% of PMIs
    total exports of Maya crude oil during any consecutive six month
    period. If PMI is required by this covenant to add designated
    customers, it shall add sufficient new customers so that, if the
    new designated customers had been designated customers
    throughout the six month period, the monthly average amount of
    exports of Maya crude oil to all designated customers during the
    six month period would have been at least 70% of PMIs
    total exports of Maya crude oil during the period. PMI shall add
    these new designated customers from countries which are members
    of the Organization for Economic Cooperation and Development
    first and from other countries second;
    to add one or more new designated customers in the event that
    the monthly average amount of PMIs exports of Maya crude
    oil to customers who are neither designated customers nor end
    users exceeds 20% of PMIs total exports of Maya crude oil
    during any consecutive three month period. An end user is a
    customer of PMI who purchases crude oil from PMI for its own use
    and not for resale. PMI shall add new designated customers until
    the monthly average amount of export sales to designated
    customers who are both designated customers and end users during
    the three month period plus the exports to new customers would
    have been no less than 70% of PMIs total exports of Maya
    crude oil;
    not to amend the designated customer notices without the prior
    written consent of Petróleos Mexicanos and the fiscal
    agent, in accordance with the transaction documents;
    to maintain in effect the servicing and collection agency
    agreement;
    to preserve and maintain its corporate existence; 39




---



##### Table of Contents




    to conduct all business transactions with PEP, PMI Services and
    us on an arms length basis according to industry standards;
    to take all further action, reasonably necessary and requested
    by us, to protect or more fully evidence our right, title and
    interest in the purchased receivables at its expense;
    not to extend, make any adjustment to, rescind, cancel, amend or
    otherwise modify, or attempt or purport to extend, make any
    adjustment to, rescind, cancel, amend or otherwise modify, the
    terms of any purchased receivables, except as provided in the
    receivables purchase agreement;
    not to change its identity or corporate structure in any manner
    which would or might make any financing statement or
    continuation statement seriously misleading within the meaning
    of
    Section 9-402(7)
    of the Uniform Commercial Code, or impair the perfection of our
    interest in any purchased receivable without prior written
    notice to us;
    not to prepare any financial statements which shall account for
    the transactions contemplated under the receivables purchase
    agreement in any manner other than as purchases or sales of the
    purchased receivables originated by PMI, except in connection
    with the preparation of financial statements for tax or tax
    accounting purposes in accordance with applicable laws;
    to perform all of the obligations required to be performed by it
    under each contract relating to the purchased receivables in
    accordance with the terms of that contract, and to take all
    actions reasonably necessary to maintain its rights under such
    contracts in full force and effect;
    to take or obtain any action, consent or approval of,
    registration or filing with, or any other action by, any
    governmental authority of Mexico, The Netherlands, the
    Cayman Islands or the United States as may be required in
    connection with the transactions contemplated in the receivables
    purchase agreement; and
    to conduct its sales to designated customers that are directly
    or indirectly Controlled by Petróleos Mexicanos in a manner
    consistent with its application of its collection policies to
    designated customers that are not Affiliates of Petróleos
    Mexicanos.  Substitution
    and Repurchase of Receivables
    
    right, title or interest in or to the purchased receivables;
    obligation to repurchase the purchased receivables; or
    right or obligation to substitute other receivables for the
    purchased receivables.    
    when a representation or warranty made with respect to that
    purchased receivable in the receivables purchase agreement was
    inaccurate at the time that the representation or warranty was
    made;
    when the designated customer owing payment on that purchased
    receivable was not an eligible customer as of the date that the
    receivable was generated or, if it was generated prior to our
    purchase of it, the date it was purchased; or
    when that purchased receivable was not an eligible receivable as
    of the date it was generated or, if it was generated prior to
    our purchase of it, the date it was purchased. 40




---



##### Table of Contents




    the amount billed by PMI to the customer on account of the crude
    oil lifted by or delivered to that customer, minus any setoff,
    dispute, reduction or negative adjustment, shall be
    multiplied by
    the discount rate applicable to that receivable, as described
    above in the introduction to this description of the receivables
    purchase agreement, multiplied by
    a fraction, (a) the numerator of which is the number of
    days from, and including, the later of the purchase date and the
    date of generation of that receivable, up to, but excluding, the
    date PMI Services deposits this repurchase price into the
    collection account, and (b) the denominator of which is 360.    
    becomes aware that a receivable which has been affected by any
    of the three factors which would allow PMI to elect to
    repurchase that receivable has not been paid within five
    business days after it became due;
    becomes aware that a purchased receivable has become subject to
    a credit memorandum, or any other set-off, dispute, reduction or
    other form of negative adjustment; or
    receives written notice from us or on our behalf that we cease
    to have a perfected first priority ownership interest in any
    purchased receivable.      Replacement:
    Circumstances in Which PMI Services or PMI Will Assume the
    Others Obligations
    
    a bankruptcy or insolvency event of PMI occurs; or
    PMI ceases to be an Affiliate of Petróleos Mexicanos or PEP.   41




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##### Table of Contents



Assignment
    
    to Petróleos Mexicanos or its successor or an Affiliate of
    Petróleos Mexicanos or its successor; or
    in connection with a transaction in which PEP shall sell,
    assign, convey, transfer, lease or otherwise dispose of all or
    substantially all of its oil producing assets to an entity which
    assumes all of the obligations of PEP under the receivables
    purchase agreement, the servicing and collection agency
    agreement, the letter agreement and each designated customer
    notice. Unless the entity to which PEP seeks to transfer its
    obligations is (a) Petróleos Mexicanos or its
    successor or (b) an Affiliate controlled, directly or
    indirectly, by Petróleos Mexicanos or its successor the
    assignment would not be allowed if it would give rise to a
    Rating Decline.    (1)  (a)
    opinions of counsel to the assignee with respect to the laws of
    New York, Mexico and the jurisdiction where the assignee is
    located stating that:  
    the receivables purchase agreement is a valid, binding and
    enforceable obligation of the assignee;
    the receivables purchase agreement is in the proper form to, and
    the execution and delivery of it and our payment of the purchase
    price for the purchased receivables constitutes all action
    required to, convey to us all of the assignees right,
    title and interest in the purchased receivables; and
    all action has been taken to permit our interest in the
    purchased receivables to be perfected upon attachment;  (b)
    an opinion of New York counsel to the assignee stating that the
    designated customer notices are valid and binding obligations
    of, and enforceable against, the designated customers under New
    York law;  (c)
    an opinion of counsel, which counsel will be reasonably
    acceptable to us, stating that the assignment will not create a
    deemed taxable exchange of the notes for United States federal
    income tax purposes; and  the counsel must be reasonably acceptable to us, and the
    opinions will be subject to assumptions and qualifications which
    are customary in this type of opinion;  (2)
    copies of designated customer notices executed and delivered by
    the assignee and acknowledged by each of the designated
    customers.  Substitution
    to Mitigate Taxes
   42




---



##### Table of Contents



(1)
    the affirmation by each rating agency that is then rating our
    notes of the rating it is giving the notes;(2)
    the satisfaction of the requirements regarding opinions of
    counsel and designated customer notices described in
    clauses (1) and (2) above in
    Assignment;(3)
    no event of default or event that with the passage of time or
    the giving of notice would constitute an event of default or
    specified event under the fiscal agency agreement, as described
    in The Fiscal Agency AgreementEvents of
    Default and Specified Events, shall have
    occurred and be continuing;(4)
    any insurance, guaranty or other suretyship arrangement
    regarding any notes to which we have previously consented in
    writing shall be in full force and effect;(5)
    the satisfaction of any steps required under Mexican
    law; and(6)
    the receipt of an opinion of Mexican counsel, which counsel must
    be reasonably acceptable to Pemex Finance, stating that the
    assignment does not materially impair the characterization of
    the transactions contemplated by the receivables purchase
    agreement.  Perfection
    of Pemex Finances and PMI Services Ownership or
    Security Interest in the Purchased Receivables
    
    the completion of any sale of eligible receivables by PMI to PMI
    Services and by PMI Services to us in accordance with the
    receivables purchase agreement,
    the delivery of notice to the designated customers and the
    receipt by PMI of a duly executed and completed acknowledgment
    of that notice,
    the satisfaction of some Mexican law formalities, and
    the filing of UCC financing statements with the appropriate
    filing office in respect of the sale of eligible receivables by
    PMI to PMI Services and by PMI Services to us.  Governing
    Law, Jurisdiction and Waiver of Immunity
    
    the laws of Mexico govern the authorization and execution of the
    agreement by PEP and PMI and all sales of receivables under the
    receivables purchase agreement,
    the laws of The Netherlands govern the authorization and
    execution of the agreement by PMI Services, and
    the laws of the Cayman Islands govern our authorization and
    execution of the agreement.   43




---



##### Table of Contents




    irrevocably submitted to the jurisdiction of any such court in
    respect of any such action;
    irrevocably waived, to the fullest extent permitted by law, any
    objection which we may have now or later to the laying of venue
    of any such action in any such court; and
    waived any right to which we may be entitled on account of
    residence or domicile.      
    attachment prior to judgment, attachment in aid of execution and
    execution of a final judgment may not be ordered by Mexican
    courts against property of Petróleos Mexicanos and some of
    the subsidiary entities;
    all domestic petroleum and hydrocarbon resources (whether solid,
    liquid or gas form) are directly, permanently and inalienably
    vested in Mexico (and, to that extent, subject to immunity);
    (a) the exploration, exploitation, refining,
    transportation, storage, distribution and first-hand sale of
    crude oil, (b) the exploration, exploitation, production
    and first-hand sale of natural gas, as well as the
    transportation and storage inextricably linked with that
    exploitation and production, and (c) the production,
    storage, transportation, distribution and first-hand sale of the
    derivatives of petroleum (including petroleum products) and
    natural gas that are susceptible of being used as basic
    industrial raw materials and that constitute basic
    petrochemicals (the petroleum industry) are
    reserved exclusively to Mexico (and, to that extent, assets
    related thereto are entitled to immunity); and
    the public entities created and appointed by the Federal
    Congress of Mexico to conduct, control, develop and operate the
    petroleum industry of Mexico include Petróleos Mexicanos
    and PEP. Therefore, Petróleos Mexicanos and PEP are
    entitled to immunity in respect to such exclusive rights and
    power.   44




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Termination
    Limitation
    on Contract Liability
  
    None of Mexico, Petróleos Mexicanos, PMI, PMI Services and
    Pemex Finance, or any of their Subsidiaries or Affiliates in any
    way guarantees or is liable for payment by any designated
    customer of the purchased receivables;
    none of Petróleos Mexicanos, its Subsidiaries, including
    PEP, or any of its Affiliates is obligated under the receivables
    purchase agreement to produce or export oil; and
    none of the fiscal agent, the trustee, the collection agent, or
    any holder of our Indebtedness has any ownership interest or
    security interest in Mexicos crude oil, whether in the
    ground or extracted.  The
    Fiscal Agency Agreement
  Covenants
    Negative
    Pledge
          
    a permitted lien must be limited to the related property or
    asset;
    any Indebtedness it secures must be for an amount that does not
    exceed the purchase price of the relevant property or asset; 45




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
    a permitted lien must be created within 180 days of the
    acquisition of the relevant property or asset; and
    the aggregate amount of Indebtedness outstanding at any one time
    that is secured by permitted liens cannot exceed U.S.$1,000,000.  Use of
    Proceeds
    
    purchase eligible receivables of designated customers generated
    or to be generated from PMI Services in accordance with the
    receivables purchase agreement;
    service or refinance existing Indebtedness; or
    for general corporate purposes as permitted by the
    Our Business covenant described below.  Financial
    Covenants
    
    the total liabilities to equity ratio to be greater than 7 to 1.
    By total liabilities to equity ratio, we mean the
    aggregate outstanding principal amount of all Indebtedness that
    we incur, other than subordinated debt provided by
    Petróleos Mexicanos, divided by our Equity. Equity includes
    our total paid-in capital, retained earnings and reserves, as
    well as the subordinated debt which Petróleos Mexicanos
    provided to us. In order to be included in the determination of
    Equity, subordinated debt must be subordinated in accordance
    with the fiscal agency agreement; or
    the debt service coverage ratio to be less than 3 to 1. By
    debt service coverage ratio, we mean, during the
    90-day
    period preceding each of these dates, the sum of:  (1)
    the aggregate amount of payments made to us by obligors on the
    purchased receivables,(2)
    capital contributions, including the proceeds of the
    subordinated debt held by Petróleos Mexicanos or any of its
    Affiliates that is subordinated in accordance with the fiscal
    agency agreement, in the form of cash or permitted investments
    as described below in Limitation on Transfers of
    Receivables; Investments, (net of restricted payments
    during that period), and(3)
    income from permitted investments,  divided by
  gross-ups
   46




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Debt
    Incurrence
    
    the total liabilities to equity ratio is not greater than 7 to 1;
    the debt service coverage ratio is not less than 3.5 to
    1; and
    no event of default or specified event, as described below in
    Events of Default and Specified
    Events, shall have occurred and be continuing.  Compliance
    with Receivables Documents
      Payment
    of Obligations; Compliance With Obligations
    
    the amount or validity of the obligation is currently being
    contested in good faith by appropriate proceedings and reserves
    regarding the obligation in conformity with IAS (now IFRS) or
    U.S. GAAP, as applicable, have been provided on our
    books; or
    the failure to pay, discharge or otherwise satisfy the
    obligation would not have a Material Adverse Effect.    Books and
    Records
     47




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Compliance
    with Law and Contractual Obligations
    Delivery
    of Collections
    Separate
    Corporate Existence
    (a)
    to maintain our own deposit account or accounts. None of
    Petróleos Mexicanos or its Affiliates will have independent
    access to our deposit accounts. However, PMI and Petróleos
    Mexicanos will have independent access to them in their
    capacities as servicer and investment manager and in accordance
    with the servicing and collection agency agreement and the
    investment management agreement. We will not commingle our funds
    with the funds of Petróleos Mexicanos or any of its
    Affiliates;  (b)
    that, to the extent we share the same officers or other
    employees with any of our shareholders or with Petróleos
    Mexicanos or any of its Affiliates,  
    the salaries of the shared officers and other employees and the
    expenses related to providing them benefits shall be fairly
    allocated among us, and
    each of us shall bear its fair share of the salary and benefit
    costs associated with the shared officers and other employees;  (c)
    that, to the extent we jointly contract with any of our
    shareholders or Petróleos Mexicanos or any of its
    Affiliates to do business with vendors or service providers or
    to share overhead expenses,  
    the costs incurred shall be allocated fairly among us, and
    each of us shall bear our fair share of these costs;  (d)
    that, to the extent we contract or do business with vendors or
    service providers where the goods and services provided are
    partially for the benefit of any of our shareholders or
    Petróleos Mexicanos or any of its Affiliates,  
    the costs incurred shall be fairly allocated to or among those
    of us for whose benefit the goods or services are
    provided, and
    each of us shall bear our fair share of these costs;  (e)
    that all business transactions between us and Petróleos
    Mexicanos or any of its Affiliates shall be only on terms no
    less favorable to us than those we could obtain if we entered
    into the transactions with non-Affiliates; 48




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(f)
    that we will maintain our office space separate from the office
    space of Petróleos Mexicanos, PMI, PEP, PMI Services and
    their Affiliates. However, our office space may be located at
    the same address as Petróleos Mexicanos, PMI, PEP, PMI
    Services or one or more of the Affiliates. Moreover, we may not
    maintain office space in the United States or Mexico;  (g)
    that, to the extent we and any of our shareholders or
    Petróleos Mexicanos or any of its Affiliates have offices
    in the same location, we shall make a fair and appropriate
    allocation of overhead costs among us. Further, each of us shall
    bear our fair share of those expenses;(h)
    to issue separate financial statements prepared at least
    quarterly and prepared in accordance with IAS (now IFRS) or
    U.S. GAAP; and  (i)
    to conduct our affairs strictly in accordance with our
    Memorandum and Articles of Association and to observe all
    necessary, appropriate and customary corporate formalities,
    including, but not limited to:  
    holding all regular shareholders and directors
    meetings;
    maintaining current minute books; and
    maintaining financial reports, corporate records and books of
    account separate from those of any other person.  Preservation
    of Corporate Existence
    
    to preserve and maintain our corporate existence, rights,
    franchises and privileges in the Cayman Islands; and
    to qualify and remain qualified in good standing as a foreign
    corporation in each jurisdiction where that qualification is
    required, other than any jurisdiction where our failure to
    qualify would not have a Material Adverse Effect.  Assessment
    
    that are being contested in good faith by appropriate
    proceedings and for which we have set aside on our books
    adequate reserves in accordance with IAS (now IFRS) or
    U.S. GAAP, as applicable, and
    where the failure to pay, satisfy or discharge would not have a
    Material Adverse Effect.  Limitation
    on Transfers of Receivables; Investments
    
    as permitted under the receivables purchase agreement;
    by way of liens permitted to exist under the negative pledge
    covenant described above; or
    as permitted by the limitation on restricted payments covenant
    described below.   49




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
    any advance, loan or capital contribution to another person or
    entity;
    any purchase of the stock, bonds, notes, debentures or other
    securities of another person or entity;
    any acquisition, by purchase or otherwise, of all or
    substantially all of the business, assets, stock or other
    evidence of beneficial ownership of another person or
    entity; and
    the making of any investment in any person or entity.      
    securities issued, unconditionally and fully guaranteed or
    insured by the full faith and credit of the government of the
    United States (or any of its agencies or instrumentalities)
    having maturities of not more than one year from the date of
    acquisition;
    dollar-denominated obligations issued or fully guaranteed by the
    government of Canada, Switzerland or any member country of the
    European Union or any state of the United States, or any
    political subdivision or agency of these governments, with
    maturities of one year or less from the time acquired and rated
    one of the two highest ratings obtainable by Moodys and
    Standard & Poors and, if rated by
    Duff & Phelps or Fitch, by any such rating agency;
    dollar-denominated certificates of deposit and eurodollar time
    deposits with maturities of one year or less from the time
    acquired, bankers acceptances with maturities of one year
    or less and overnight bank deposits, in each case with any
    commercial bank meeting certain size and ratings criteria;
    repurchase obligations with a term of not more than seven days
    for underlying securities of the three types described above,
    entered into with any financial institution meeting the same
    size and ratings criteria;
    dollar-denominated commercial paper or other debt instruments
    with maturities of one year or less from the time acquired and
    rated one of the two highest ratings by Moodys and
    Standard & Poors and, if rated by
    Duff & Phelps or Fitch, by any such rating
    agency; and
    dollar-denominated investments in money market funds, including
    funds in which the fiscal agent or any of its affiliates serves
    as an administrator, shareholder, servicing agent or custodian,
    so long as the funds:  (a)
    are rated one of the two highest ratings by Moodys and
    Standard & Poors, and  (b)
    if rated by Duff & Phelps or Fitch, by any such rating
    agency and invest exclusively in investments of the five types
    described above.  Our
    Business
    
    the acquisition of eligible receivables under the receivables
    purchase agreement;
    the assignments and transfers under the receivables purchase
    agreement; 50




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
    the other transactions contemplated by the receivables purchase
    agreement, the servicing and collection agency agreement, the
    letter agreement, the designated customer notices, the fiscal
    agency agreement, each of our debt agreements and the crude oil
    sale agreement governing PEPs sale of crude oil to
    PMI; and
    any activity incidental to these activities and necessary or
    convenient to accomplish them.    Agreements
    (a)
    become a party to any type of agreement or undertaking, other
    than:  
    the receivables purchase agreement, the servicing and collection
    agency agreement, the letter agreement, the designated customer
    notices, the fiscal agency agreement, each of our debt
    agreements and the crude oil sale agreement governing PEPs
    sale of crude oil to PMI and any other documents in connection
    with the foregoing agreements;
    leases of office space, equipment or other facilities for our
    use in our ordinary course of business;
    employment agreements, service agreements and agreements
    relating to shared employees; and
    agreements necessary to perform our obligations or otherwise
    permitted under the receivables purchase agreement, the
    servicing and collection agency agreement, the letter agreement,
    the designated customer notices, the fiscal agency agreement,
    each of our debt agreements and the crude oil sale agreement
    governing PEPs sale of crude oil to PMI and any other
    documents in connection with the foregoing agreements;  (b)
    issue any power of attorney, except:  
    to any collection agent;
    to the servicer; or
    for the purpose of permitting any person to perform any
    functions on our behalf that are not prohibited by or
    inconsistent with the terms of the receivables purchase
    agreement, the servicing and collection agency agreement, the
    letter agreement, the designated customer notices, the fiscal
    agency agreement, each of our debt agreements and the crude oil
    sale agreement governing PEPs sale of crude oil to PMI and
    any other documents in connection with the foregoing
    agreements; or  (c)
    supplement, modify or waive any of the provisions of the
    receivables purchase agreement, the servicing and collection
    agency agreement, the letter agreement, or the designated
    customer notices. Moreover, we shall not request, consent to or
    permit any supplement, modification or waiver or exercise any
    consent rights granted to us under those documents unless that
    change, waiver or exercise would not have:  
    a Material Adverse Effect; or
    an adverse effect on the interests, rights or remedies of the
    holders of any of our outstanding Indebtedness under or with
    respect to the receivables purchase agreement, the servicing and
    collection agency agreement, the letter agreement, the
    designated customer notices, the fiscal agency agreement, each
    of our debt agreements or the crude oil sale agreement governing
    PEPs sale of crude oil to PMI and any other documents in
    connection with the foregoing agreements. 51




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Offices
    
    provide 30 days prior written notice to the holders of our
    Indebtedness in accordance with the related debt
    agreement; and
    take all actions reasonably requested by any holder of our
    Indebtedness in an Issuer Notice in order to continue the
    perfection and priority of our ownership or security interest in
    all purchased receivables and related property then owned or
    thereafter created, including but not limited to all filings and
    other acts necessary under the Uniform Commercial Code or
    similar statute of each relevant jurisdiction. For a description
    of what we mean by related property, see The
    Designated Customers and Eligible ReceivablesThe Eligible
    Receivables.  Charter
    Limitation
    on Restricted Payments
    
    make any payment on subordinated indebtedness;
    declare or pay any dividend on, or make any payment on account
    of, or set apart assets for a sinking or other analogous fund
    for, the purchase, redemption, defeasance, retirement or other
    acquisition of, any shares of any class of our capital stock, or
    any of our subordinated indebtedness, whether now or hereafter
    outstanding; or
    make any other distribution in respect thereof.      
    no event of default, specified event or event or condition that
    would constitute an event of default or specified event, as
    described below in Events of Default and
    Specified Events, with notice or in the future
    shall have occurred and be continuing; and
    we would be in compliance with the Debt Service Coverage
    Ratio and the Total Liabilities to Equity
    Ratio covenants described above.   52




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
    no event of default, specified event or event or condition that
    would constitute an event of default or specified event, as
    described below in Events of Default and
    Specified Events, with notice or in the future
    shall have occurred and be continuing; and
    we would be in compliance with the Debt Service Coverage
    Ratio and the Total Liabilities to Equity
    Ratio covenants described above.  Events
    of Default
    (a)
    our failure to comply with our obligations (1) to maintain
    and fund the retention account as described below under
    Funding and Administration of Retention
    Account, which failure shall continue for seven business
    days, or (2) to maintain and fund the liquidity facility as
    described below under Liquidity Facility,
    which failure shall continue for 30 business days;  (b)
    our failure to remedy a breach of  (1)
    (x) the Total Liabilities to Equity Ratio
    covenant or  (y)
    the Debt Service Coverage Ratio covenant  by obtaining contributions to our Equity to the extent necessary
    to restore compliance on a pro forma basis with the applicable
    covenant after giving effect thereto within 60 days after
    such breach, including on any date of determination; or  (2)
    any covenant under the fiscal agency agreement in any material
    respect (other than those covenants referred to in paragraphs
    (a) and (b)(1) above in this sub-section of this annual
    report) within 60 days after such breach;    (c)
    some events of bankruptcy, insolvency, suspension of payments,
    liquidation, dissolution or reorganization relating to PMI
    Services, PMI (unless a novation of the crude oil sale agreement
    governing PEPs sale of crude oil to PMI is in effect),
    PEP, Petróleos Mexicanos or us;  (d)
    the occurrence of a change of control that is accompanied by a
    Rating Decline;    
    Pemex Finance Trust ceases to be the beneficial
    owner, as defined in
    Rules 13d-3
    and 13d-5
    under the Securities Exchange Act of 1934, directly or
    indirectly, of 100% of our issued and outstanding capital stock,
    and there is a reasonable likelihood that that change will have
    an adverse effect on the holders of the Notes;
    We consolidate with, or merge into or with, another person, or
    we sell, assign, convey, transfer, lease or otherwise dispose of
    all or substantially all of our assets; 53




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
    Petróleos Mexicanos or its successor ceases to be the
    beneficial owner, directly or indirectly, of at least a majority
    of the issued and outstanding voting shares of PMI or PMI
    Services; or
    PEP sells, assigns, conveys, transfers, leases or otherwise
    disposes of all or substantially all of its oil producing assets
    (directly or indirectly, by way of merger, transfer of assets or
    shares of capital stock, or otherwise) to an entity other than
    Petróleos Mexicanos or its successor, or an Affiliate
    controlled, directly or indirectly, by Petróleos Mexicanos
    or its successor, which assumes all of the obligations of PEP
    under the receivables purchase agreement, the servicing and
    collection agency agreement, the letter agreement, the
    designated customer notices and the crude oil sale agreement.  (e)
    our failure to make any payment of principal on our Indebtedness
    at maturity, including any applicable grace period, in an amount
    in excess of U.S.$10,000,000 (or the equivalent thereof in any
    other currency or composite currencies), when the failure has
    continued for a period of 30 days after our receipt of an
    Issuer Notice notifying us of that failure;  (f)
    our default on any Indebtedness, if that default results in the
    acceleration of Indebtedness in an amount in excess of
    U.S.$10,000,000 (or the equivalent thereof in any other currency
    or composite currencies) without that Indebtedness having been
    discharged or such acceleration having been cured, waived,
    rescinded or annulled for a period of 30 days after our
    receipt of an Issuer Notice notifying us of that default.However, if any of the failures, defaults or accelerations
    referred to in this clause (f) or clause (e) above
    shall cease or be cured, waived, rescinded or annulled, then the
    event of default arising by reason of that failure, default or
    acceleration shall likewise be considered cured;  (g)
    if we fail to have, at any time and for a period of five
    business days,  (1)
    a valid unencumbered ownership interest in purchased receivables
    sold under the receivables purchase agreement, valued at the
    purchase price paid for that receivable, whether existing as of
    such date or to be generated thereafter; and(2)
    a valid unencumbered ownership interest in cash, cash
    equivalents and permitted investments in excess of an amount
    equal to the sum of the next payment of scheduled debt service
    for all debt agreements under which Indebtedness is outstanding
    at such date;      (h)
    if:  
    any designated customer which is an Affiliate of Petróleos
    Mexicanos directly or indirectly makes a payment with respect to
    purchased receivables into or for the account of Petróleos
    Mexicanos, PMI, PMI Services or any other Subsidiary of
    Petróleos Mexicanos;
    PMI does not deliver, or cause to be delivered, that payment to
    the relevant collection agent for deposit in the collection
    account; and 54




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
    PMIs failure to deliver, or cause to be delivered,
    continues for 7 business days after the payment was made to or
    for the account of Petróleos Mexicanos, PMI, PMI Services
    or any other Subsidiary of Petróleos Mexicanos;  (i)
    if:  
    PMI fails to comply in any material respect with its obligation
    under the receivables purchase agreement to cause the monthly
    average amount of eligible receivables of designated customers
    it generates during any consecutive twelve month period that are
    not subject to any encumbrance other than under the receivables
    purchase agreement to represent at least the lesser of:  
    20 million barrels of Maya crude oil; and
    80% of PMIs total eligible receivables generated from
    sales of Maya crude oil, and Petróleos Mexicanos does not
    cause PMI to comply with its obligation; and  
    in any month after its failure to comply, PMI directly or
    indirectly sells Maya crude oil representing more than 30% of
    its average monthly exports of Maya crude oil during the
    consecutive twelve-month period prior to the date of
    determination to any third party; the third party is not
    required to make all payments on receivables owed to PMI to a
    collection account; and PMI can obligate the third party to
    resell the crude oil to third parties who are, in turn, required
    to make their payments on any receivable to a collection account.  (j)     (A)
    except with respect to the case described in (h) or
    (i) above, failure on the part of any of PMI, PEP,
    Petróleos Mexicanos, PMI Services or us to remedy a
    material breach of its or our material obligations under the
    receivables purchase agreement or the letter agreement, and that
    failure continues for a period of 60 days; or(B)
    failure by PEP to export at least 90% of its exports through
    PMI, if such failure continues for 30 days. However, if
    PEPs exports through PMI are less than 50% of PEPs
    exports, the 30 day cure period would not apply;  (k)
    any of the representations or warranties of:  (A)
    PEP, PMI, PMI Services or us made pursuant to the sections of
    the receivables purchase agreement entitled
    (1) Conduct of Business, Organization;
    Powers, Litigation; Compliance with Laws, and
    Consideration Received, or
    (2) Authorization or
    Enforceability; or  (B)
    Petróleos Mexicanos made pursuant to the letter agreement,  prove to have been false or incorrect in any material respect
    when made, and that representation or warranty continues to be
    false or incorrect in any material respect for 60 days;  (l)     (A)
    the Mexican Government, Petróleos Mexicanos or any of its
    Affiliates takes action, which is not withdrawn, rescinded or
    reversed within 10 days, that prevents Petróleos
    Mexicanos, PMI Services, PMI or PEP (or any entity that has
    assumed the obligations of Petróleos Mexicanos, PMI
    Services, PMI or PEP under the receivables purchase agreement,
    the servicing and collection agency agreement, the letter
    agreement, each designated customer notice and the crude oil
    sale agreement governing PEPs sale of crude oil to PMI)
    from:  (1)
    carrying on all or substantially all of its business and
    operations relating to the generation and sale of
    receivables, or(2)
    complying with its obligations with respect to the sale of crude
    oil under the crude oil sale agreement governing PEPs sale
    of crude oil to PMI; 55




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(B)
    or either Petróleos Mexicanos or PEP:  
    ceases to be a decentralized public entity of the Mexican
    Government or otherwise controlled by the Mexican Government;
    is dissolved, disestablished, or suspends its operations, and
    that dissolution, disestablishment or suspension of operations
    is material in relation to the business of Petróleos
    Mexicanos or PEP taken as a whole; or
    ceases to be the entity which has the exclusive right and
    authority to conduct on behalf of Mexico the activities of
    exploration, exploitation, production and first-hand sale of
    crude oil;  (m)    (A)
    any of Petróleos Mexicanos, PEP, PMI, PMI Services or us
    (or any entity that has assumed their or our obligations)
    revokes, terminates or repudiates the fiscal agency agreement,
    the receivables purchase agreement, the servicing and collection
    agency agreement, the crude oil sale agreement governing
    PEPs sale of crude oil to PMI or the letter
    agreement; or(B)
    any of those agreements ceases to be in full force and effect
    other than pursuant to its terms.  However, if their or our revocation, termination, cessation or
    repudiation could not reasonably be expected to result in a
    Material Adverse Effect, it shall not be an event of default;  (n)
    we fail to purchase eligible receivables, generated or to be
    generated, arising out of the sale of crude oil other than Maya
    crude oil within 10 business days after the date when we are
    required to do so under the receivables purchase
    agreement; or(o)
    we fail to add a new customer to the list of designated
    customers within 60 days of the date when we are required
    to do so under the receivables purchase agreement.      Specified
    Events
    (1)
    upon notification to us pursuant to a Specified Event Notice,  
    our failure to comply with any covenant referred to in clause
    (b)(1) above under Events of Default and the
    continuation of that failure; or
    PMIs failure to comply in any material respect with its
    obligation under the receivables purchase agreement to cause the
    monthly average amount of eligible receivables of designated
    customers generated by PMI during any consecutive twelve-month
    period that are not subject to any encumbrance other than under
    the receivables purchase agreement to represent at least the
    lesser of:  
    20 million barrels of Maya crude oil; and 56




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
    80% of PMIs total eligible receivables generated from
    sales of Maya crude oil;  (2)
    an event of default in paragraph (g) under
    Events of Default shall have occurred and be
    continuing, or(3)
    any other event or condition that is identified as a special
    event in any of our debt agreements.  Liquidity
    Facility
    
    an account with the fiscal agent which is called the
    liquidity account and
    acceptable letters of credit delivered to the fiscal agent as
    described under Acceptable Letters of Credit
    below.      Acceptable
    Letters of Credit
    
    must be issued by an office located in the United States of a
    bank or trust company which is organized under the laws of the
    United States or any state thereof that has both a short-term
    deposit rating of at least
    P-1 and
    A-1 and
    long-term deposit rating of at least
    A-2 or its
    equivalent by Moodys and A by Standard &
    Poors and, if rated by either of Duff & Phelps
    or Fitch, by any such rating agency. If at any time the issuer
    of a letter of credit shall cease to meet these requirements,
    then the letter of credit shall cease to be an acceptable letter
    of credit; and
    must by its terms have an initial expiration date at least one
    year beyond its date of issuance and provide that:  
    the letter of credit will be automatically renewed for a period
    of at least one year beyond its then current expiration date
    unless the issuer of the letter of credit provides a written
    termination notice to the fiscal agent at least 20 business days
    prior to its then current expiration date; and
    if we have delivered a termination notice, the fiscal agent
    shall be entitled, at an office located in the Borough of
    Manhattan, The City of New York, to draw the full amount
    available to be drawn under the letter of credit at any time
    after its receipt of the termination notice and prior to the
    expiration of the letter of credit. The amount is to be
    deposited in an account with the fiscal agent. 57




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Payment
    of Accelerated Debt Service
    
    that holder shall only be entitled to receive payment of
    accelerated debt service in respect of that Indebtedness. By
    accelerated debt service, we mean any debt service
    which has been declared immediately due and payable (or in the
    case of a credit enhancement provided with respect to its debt
    service, the reimbursement obligation has been declared due and
    payable) after the occurrence of a default or an event of
    default under any debt agreement, and
    that holder shall not ask, demand, sue for, take or receive from
    us, by set-off or in any other manner, or retain, payment (in
    whole or in part) of accelerated debt service other than such
    holders ratable share of amounts, if any, on deposit in
    the retention account.    
    any event of default of the type referred to in clauses (a),
    (b)(1)(x), (c), (d), (g), (h), (i), (j)(B), (k)(A)(2), (k)(B),
    (l) or (m) above under Events of
    Default or
    an event of default of the type referred to in any of our debt
    agreements which under the terms of that debt agreement triggers
    a diversion of 100% of collections to the retention account in
    the same manner as such clauses pursuant to the fiscal agency
    agreement.    Funding
    and Administration of Retention Account
     58




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and/or
  
    if an Acceleration Notice is in effect and we have received an
    Acceleration Notice or an Issuer Notice specifying that an event
    of default of the types referred to in clause (a), (b)(1)(x),
    (c), (d), (g), (h), (i), (j)(B), (k)(A)(2), (k)(B), (l) or
    (m) under Events of Default above shall
    have occurred and be continuing, on each business day 100% of
    all collections paid into the collection account on the
    immediately preceding business day on receivables we have
    purchased under the receivables purchase agreement;
    in all other cases, 25% of the amount by which the aggregate
    collections deposited into the collection account on the
    immediately preceding business day exceed the aggregate amount
    of debt service (excluding any accelerated debt service) that
    was paid on the immediately preceding business day.        Investment
    of Funds in Liquidity Account and Retention
    Account
    The
    Servicing and Collection Agency Agreement
    
    any late payment or default, interest or finance charges
    assessed against or payable by any customer because that
    customer has failed to make timely payment in full;
    all collections received in respect of the related property. For
    a more complete description of what related property is, see
    The Designated Customers and Eligible
    ReceivablesThe Eligible Receivables;
    all proceeds of the receivables and collections thereof,
    including collections evidenced by an account, note, instrument,
    letter of credit, contract, security agreement, chattel paper,
    general intangible or other evidence of indebtedness or security; 59




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
    whatever is received upon the sale, exchange, collection or
    other disposition of, or any indemnity, warranty or guarantee
    payable in respect of, the foregoing; and
    all proceeds as defined in
    Section 9-306
    of the Uniform Commercial Code as in effect in the State of New
    York.    The
    Collection Account
    Duties
    of the Collection Agent
        
    if it fails to perform its duties, or
    if it ceases to meet the qualifications specified in the
    servicing and collection agency agreement. 60




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Duties
    of the Servicer
    
    not to discharge any receivable sold to us nor to release any
    designated customer from its obligations with respect to any
    such purchased receivable except (a) with our consent or
    the consent of PMI Services, as applicable; (b) upon
    payment in full of that purchased receivable; or (c) in
    accordance with the terms of the receivables purchase agreement,
    the servicing and collection agency agreement, the letter
    agreement and each designated customer notice;
    not to take any action or cause any person to take any action
    that would impair our rights or the rights of PMI Services in
    any purchased receivable;
    not to create, incur or assume any lien upon or with respect to
    any purchased receivable, except as permitted by the receivables
    purchase agreement; and
    to furnish us, PMI Services and the collection agent with an
    annual report prepared by an internationally recognized
    independent certified public accountant stating that the
    servicer is in compliance, and that all related accounts,
    records and computer systems are properly prepared and
    maintained in accordance with, the servicing and collection
    agency agreement.    
    it fails to perform its material servicing obligations and this
    failure continues for 30 days following notice from
    us; or
    it willfully breaches any provision of the receivables purchase
    agreement that restricts or prohibits the sale of receivables of
    any designated customer or results in collections in respect of
    purchased receivables not being paid to the collection account.    Representations
    and Warranties
    
    violates any law or decree of any governmental authority of the
    United States, The Netherlands, the Cayman Islands or Mexico;
    breaches any term of, constitutes a default under or results in
    the creation of a lien upon any of its property or assets under
    any indenture, credit agreement or contract; or
    violates any provision of its by-laws. 61




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
    invoice each designated customer receiving a shipment of crude
    oil and instruct such designated customer to deposit all
    collections on purchased receivables into the collection account;
    maintain at its offices a file of all relevant documents
    relating to the receivables of the designated customers for the
    benefit of PMI Services, the servicer and us;
    indemnify and hold harmless PMI Services, any successor servicer
    and us from all liabilities and losses resulting from any
    failure of PMI to perform its obligations under the servicing
    and collection agency agreement;
    remain as servicer and not resign so long as the servicing and
    collection agency agreement remains in effect or receivables of
    designated customers are required to be generated, sold to us
    and collected. However, in the event of a novation, PMI Services
    shall replace PMI as servicer; and
    indemnify and hold harmless the collection agent and its
    successors, assigns, agents and servants from all claims,
    liabilities or losses asserted against the collection agent,
    arising out of its execution of the servicing and collection
    agency agreement or arising from its good faith performance of
    its duties under that agreement.  Governing
    Law, Jurisdiction and Waiver of Immunity
    
    the laws of Mexico govern the authorization and execution of the
    agreement by Petróleos Mexicanos and PMI;
    the laws of The Netherlands govern the authorization and
    execution of the agreement by PMI Services; and
    the laws of the Cayman Islands govern our authorization and
    execution of the agreement.    
    irrevocably submitted to the jurisdiction of any such court in
    respect of any such action;
    waived, to the fullest extent permitted by law, any objection
    which any of us may have now or later to the laying of venue of
    any such action in any such court; and
    waived any right to which we may be entitled on account of
    residence or domicile.   62




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
    attachment prior to judgment, attachment in aid of execution and
    execution of a final judgment may not be ordered by Mexican
    Courts against property of Petróleos Mexicanos and PMI;
    all domestic petroleum and hydrocarbon resources (whether solid,
    liquid or gas form) are directly, permanently and inalienably
    vested in Mexico (and, to that extent, subject to immunity);
    (a) the exploration, exploitation, refining,
    transportation, storage, distribution and first-hand sale of
    crude oil, (b) the exploration, exploitation, production
    and first-hand sale of natural gas, as well as the
    transportation and storage inextricably linked with that
    exploitation and production, and (c) the production,
    storage, transportation, distribution and first-hand sale of the
    derivatives of petroleum (including petroleum products) and
    natural gas that are susceptible of being used as basic
    industrial raw materials that constitute basic
    petrochemicals (the petroleum industry) are
    reserved exclusively to Mexico (and, to that extent, assets
    related thereto are entitled to immunity); and
    the public entities created and appointed by the Federal
    Congress of Mexico to conduct, control, develop and operate the
    petroleum industry of Mexico include Petróleos Mexicanos
    and PEP. Therefore, Petróleos Mexicanos is entitled to
    immunity in respect to such exclusive rights and power.    The
    Letter Agreement
    
    its valid existence;
    its authority to enter into the letter agreement;
    the enforceability of the letter agreement in accordance with
    its terms; and
    the lack of any actions, suits or proceedings at law or in
    equity by or before any governmental authority, either pending
    or threatened, (1) that involves the letter agreement or
    (2) as to which there is a reasonable possibility of an
    outcome which would be expected to result in a Material Adverse
    Effect.    
    in any way guarantees payment of the purchased receivables; 63




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
    will be liable for nonpayment of any purchased receivable by any
    designated customer; or
    will be liable to indemnify any person against any claims or
    losses suffered by us as a result of a failure by any designated
    customer to make timely payments on account of purchased
    receivables.  Governing
    Law, Jurisdiction and Waiver of Immunity
    
    irrevocably submitted to the jurisdiction of any such court in
    respect of any such action;
    irrevocably waived, to the fullest extent permitted by law, any
    objection which it may have now or later to the laying of venue
    of any such action in any such court; and
    waived any right to which it may be entitled on account of
    residence or domicile.      
    attachment prior to judgment, attachment in aid of execution and
    execution of a final judgment may not be ordered by Mexican
    Courts against property of PMI, Petróleos Mexicanos and
    some of the subsidiary entities;
    all domestic petroleum and hydrocarbon resources (whether solid,
    liquid or gas form) are directly, permanently and inalienably
    vested in Mexico (and, to that extent, subject to immunity);
    (a) the exploration, exploitation, refining,
    transportation, storage, distribution and first-hand sale of
    crude oil, (b) the exploration, exploitation, production
    and first-hand sale of natural gas, as well as the
    transportation and storage inextricably linked with that
    exploitation and production, and (c) the production,
    storage, transportation, distribution and first-hand sale the
    derivatives of petroleum (including petroleum products) and
    natural gas that are susceptible of being used as basic
    industrial raw materials and that constitute basic
    petrochemicals (the petroleum industry) are
    reserved exclusively to Mexico (and, to that extent, assets
    related thereto are entitled to immunity); and
    the public entities created and appointed by the Federal
    Congress of Mexico to conduct, control, develop and operate the
    petroleum industry of Mexico include Petróleos 64




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Mexicanos and PEP. Therefore, Petróleos Mexicanos is
    entitled to immunity in respect to such exclusive rights and
    power.    DESCRIPTION
    OF THE INDENTURE
    Principal

FinalSeries of Note

Amount

Maturity

Supplemental Indenture1998 notes5.72% notes due 2003

U.S.$500,000,000

November 15, 2003

First 5.72% Note Supplemental
    Indenture between Pemex Finance, MBIA Insurance Corporation
    (MBIA), the Fiscal Agent and the Trustee,
    dated December 1, 19988.02% notes due 2007

U.S.$350,000,000

May 15, 2007

First 8.02% Note Supplemental
    Indenture between Pemex Finance and the Trustee, dated December
    1, 19986.30% notes due 2010

U.S.$400,000,000

May 15, 2010

First 6.30% Note Supplemental
    Indenture between Pemex Finance, Ambac Assurance Corporation
    (Ambac), the Fiscal Agent and the Trustee, dated
    December 1, 19989.15% notes due 2018

U.S.$250,000,000

November 15, 2018

First 9.15% Note Supplemental
    Indenture between Pemex Finance and the Trustee, dated December
    1, 1998February 1999 notes6.125% notes due 2003

U.S.$300,000,000

November 15, 2003

Second 6.125% Note
    Supplemental Indenture between Pemex Finance, MBIA, the Fiscal
    Agent and the Trustee, dated February 25, 19998.450% notes due 2007

U.S.$200,000,000

February 15, 2007

Second 8.450% Note
    Supplemental Indenture between Pemex Finance and the Trustee,
    dated February 25, 19996.550% notes due 2008

U.S.$300,000,000

February 15, 2008

Second 6.550% Note
    Supplemental Indenture between Pemex Finance, Ambac, the Fiscal
    Agent and the Trustee, dated February 25, 19998.875% notes due 2010

U.S.$200,000,000

November 15, 2010

Second 8.875% Note
    Supplemental Indenture between Pemex Finance and the Trustee,
    dated February 25, 1999February 1999 floating rate
    notesSeries A floating rate notes

U.S.$100,000,000

February 15, 2014

Floating Rate Notes, Series A,
    Supplemental Indenture between Pemex Finance and the Trustee,
    dated as of February 25, 1999July 1999 notes9.14% notes due 2004

U.S.$225,000,000

August 15, 2004

Third 9.14% Note Supplemental
    Indenture between Pemex Finance and the Trustee, dated July 27,
    19999.69% notes due 2009

U.S.$600,000,000

August 15, 2009

Third 9.69% Note Supplemental
    Indenture between Pemex Finance and the Trustee, dated July 27,
    1999 65




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Principal

FinalSeries of Note

Amount

Maturity

Supplemental Indenture7.33% notes due 2012

U.S.$250,000,000

May 15, 2012

Third 7.33% Note Supplemental
    Indenture between Pemex Finance, MBIA, the Fiscal Agent and the
    Trustee, dated July 27, 199910.61% notes due 2017

U.S.$200,000,000

August 15, 2017

Third 10.61% Note Supplemental
    Indenture between Pemex Finance and the Trustee, dated July 27,
    1999July 1999 Additional
    Issuances9.22% notes due 2004

U.S.$50,000,000

May 15, 2004

9.22% Note Supplemental
    Indenture between Pemex Finance and the Trustee, dated July 27,
    1999Series B floating rate notes

U.S.$90,000,000

February 15, 2014

Floating Rate Notes, Series B,
    Supplemental Indenture between Pemex Finance and the Trustee,
    dated July 27, 1999Series C floating rate notes

U.S.$35,000,000

August 18, 2004

Floating Rate Notes, Series C,
    Supplemental Indenture between Pemex Finance and the Trustee,
    dated July 27, 1999February 2000 notes9.03% notes due 2011

U.S.$800,000,000

February 15, 2011

Fourth 9.03% Note Supplemental
    Indenture between Pemex Finance and the Trustee, dated February
    10, 20007.80% notes due 2013

U.S.$150,000,000

February 15, 2013

Fourth 7.80% Note Supplemental
    Indenture between Pemex Finance, MBIA, the Fiscal Agent and the
    Trustee, dated February 10, 2000         Form F-4 no. 333-10920).
    (a)
    the supplemental indentures for the 1998 notes are included as
    exhibits as incorporated by reference to the registration
    statement of Pemex Finance and Petróleos Mexicanos on
    Form F-4
    dated September 30, 1999 (registration statement
    no. 333-10920);  (b)
    the supplemental indentures for the February 1999 notes and
    February 1999 floating rate notes are included as exhibits as
    incorporated by reference to the registration statement of Pemex
    Finance and Petróleos Mexicanos on
    Form F-4
    dated September 30, 1999 (registration statement
    no. 333-10918);  (c)
    the supplemental indentures for the July 1999 notes and July
    1999 additional issuances are included as exhibits as
    incorporated by reference to the registration statement of 66




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Pemex Finance and Petróleos Mexicanos on
    Form F-4
    dated September 30, 1999 (registration statement
    no. 333-10916); and  (d)
    the supplemental indentures for the February 2000 notes are
    included as exhibits as incorporated by reference to the
    registration statement of Pemex Finance and Petróleos
    Mexicanos on
    Form F-4
    dated September 27, 2000 (registration statement no.
    333-12614).    General
    Covenants
        Events of
    Default
    (a)
    our failure to pay any principal of any of the notes of that
    series when due, upon redemption, by declaration or otherwise; 67




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(b)
    our failure to make any payment of any interest or other amount,
    except principal, on any of the notes of that series, and our
    failure continues for 5 or more days;  (c)
    some events of bankruptcy, insolvency, liquidation, dissolution
    or reorganization relating to us, PMI Services, PMI, PEP or
    Petróleos Mexicanos;  (d)
    our failure to remedy any material breach of any covenant under
    the indenture within 60 days after the breach, other than
    those covenants incorporated by reference to the fiscal agency
    agreement;  (e)
    it becomes unlawful for us to perform any of our obligations
    under the fiscal agency agreement, the indenture or the notes of
    that series. This occurrence will only constitute an event of
    default if it has, or could reasonably be expected to have, a
    Material Adverse Effect;  (f)
    the fiscal agency agreement, indenture or the notes of that
    series are no longer in full force and effect for a reason not
    expressly provided for by the terms of that agreement;  (g)
    if we repudiate the fiscal agency agreement, the indenture, or
    the notes of that series;(h)
    either we or any entity that has assumed our obligations under
    the relevant agreement revokes or terminates the fiscal agency
    agreement, the indenture or any of the notes of that
    series; or  (i)
    the occurrence of any event of default described
    under Description of Principal AgreementsThe Fiscal
    Agency AgreementEvents of Default.    Acceleration
    of Payment
    
    at the direction of the holders of more than 50% of the
    outstanding aggregate principal amount of the Notes of that
    series if one of the events of default described under
    paragraphs (a) or (b) under Events of
    Default above occurs, or
    at the direction of
    662/3%
    of the outstanding aggregate principal amount of the Notes of
    that series if one of the events of default described under
    paragraphs (d), (e), (f), (g), (h) or (i) above occurs.     68




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Modification
    of the Indenture
    Changes
    Not Requiring Approval
    
    secure one or more series of our notes,
    evidence the assumption of our obligations by a successor
    corporation in accordance with the indenture,
    add or modify covenants to provide further protection for the
    holders of our notes,
    cure any ambiguity or correct any inconsistency in the indenture,
    establish the forms or terms of additional notes, and
    evidence the acceptance of appointment by a successor trustee.  Changes
    Requiring Majority Approval
    
    add any provisions to the indenture,
    change the indenture in any manner,
    eliminate any provisions of the indenture, including any
    provision of the fiscal agency agreement incorporated by
    reference in the indenture, and
    modify the rights of the holders of the Notes of each affected
    series in any manner.  Changes
    Requiring Each Holders Approval
    
    extension of the stated maturity of the principal of any note,
    reduction in the principal amount of any note,
    reduction in the rate or extension of the time of payment of
    interest on any notes,
    reduction in any amount payable on redemption of any note,
    change in the currency in which the principal (including any
    amount in respect of original issue discount), premium, if any,
    or interest on any note is payable,
    reduction in the amount of any original issue discount security
    payable upon acceleration or provable in bankruptcy, 69




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
    changes to certain provisions of the indenture relating to the
    notes issued under the indenture which are not denominated in
    U.S. dollars,
    changes that will impair the right to institute suit for the
    enforcement of any payment on any note when due, and
    reduction in the percentage in principal amount of notes of any
    series.  Governing
    Law; Waiver of Immunity
        
    sovereign immunity under the Immunities Act;
    any other applicable law relating to sovereign immunity; and
    immunity from prejudgment attachment, post-judgment attachment
    and execution.  Redemption
    Concerning
    the Insured Notes
    
    The 6.30% notes due 2010 issued under the senior indenture
    as supplemented by the First 6.30% Note Supplemental
    Indenture between us, Ambac and JPMorgan Chase Bank, N.A., as
    fiscal agent and trustee, dated December 1, 1998;
    The 6.550% notes due 2008 issued under the senior indenture
    as supplemented by the Second 6.550% Note Supplemental
    Indenture between us, Ambac and JPMorgan Chase Bank, N.A., as
    fiscal agent and trustee, dated February 25, 1999;
    The 7.33% notes due 2012 issued under the senior indenture
    as supplemented by the Third 7.33% Note Supplemental
    Indenture between us, MBIA and JPMorgan Chase Bank, N.A., as
    fiscal agent and trustee, dated July 27, 1999; and
    The 7.80% notes due 2013 issued under the senior indenture
    as supplemented by the Fourth 7.80% Note Supplemental
    Indenture between us, MBIA and JPMorgan Chase Bank, N.A., as
    fiscal agent and trustee, dated February 10, 2000. 70




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
    scheduled interest payments for the series of Notes that it
    insures; scheduled interest payments means, with
    respect to any series of Notes, scheduled payments of interest
    accrued on amounts of principal outstanding under those Notes,
    and any additional amounts as a result of tax or withholding on
    the payment that we are required to pay in respect of those
    scheduled payments of principal or interest;
    originally scheduled principal payments for that series of
    Notes, and
    the portion of any payment representing principal
    and/or
    interest on that series of Notes which subsequently is avoided
    in whole or in part as a preference payment under applicable law.    Redemption
      Termination
    of the Note Insurance Policy
    (1)
    the earlier to occur of the dates on which:  (a)
    all the Notes of the relevant series have been redeemed in
    accordance with the terms of the applicable indenture; and  (b)
    all scheduled payments of principal and accrued interest,
    excluding additional amounts, have been paid or deemed to be
    paid in respect of those Notes under the applicable
    indenture, and 71




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(2)
    the expiration of the period, if any, during which any scheduled
    payment of principal and accrued interest could be avoided under
    any applicable bankruptcy, insolvency, receivership, or similar
    law.    GLOSSARY
    OF CERTAIN DEFINED TERMS USED PRIMARILY UNDER THE
    CAPTIONS DESCRIPTION OF PRINCIPAL AGREEMENTS AND
    DESCRIPTION OF
    THE INDENTURE
    Acceleration Notice
  Affiliate
  (1)
    any other person which, directly or indirectly, is in control
    of, is controlled by, or is under common control with, such
    person, or(2)
    any person who is a director, officer, shareholder or partner
    (A) of that person, (B) of any Subsidiary of that
    person or (C) of any person described in the preceding
    clause (1).    
    vote 20% or more of the securities having ordinary voting power
    for the election of directors of that person, or
    direct or cause the direction of the management and policies of
    that person whether by contract or otherwise.  Control and/or
  Equity
 72




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Guarantee
  Indebtedness
  (1)
    any obligation of such person for borrowed money,(2)
    any obligation of such person evidenced by bonds, debentures,
    notes, Guarantees or other similar instruments, including,
    without limitation, any such obligations incurred in connection
    with the acquisition of property (as defined in The
    Designated Customers and Eligible ReceivablesThe Eligible
    Receivables), assets or businesses,(3)
    any reimbursement obligation of such person with respect to
    letters of credit, bankers acceptances financial guaranty
    insurance policies or similar facilities issued for the account
    of or otherwise on behalf of such person,(4)
    any obligation of such person issued or assumed as the deferred
    purchase price of property or services (but excluding trade
    accounts payable or accrued liabilities arising in the ordinary
    course of business),(5)
    any obligation of such person to pay rent or other payments
    under a lease of real or personal property which is required to
    be accounted for as a capital lease or a liability, on the face
    of that persons balance sheet (or other arrangement
    conveying the right to use),(6)
    the maximum fixed redemption or repurchase price of redeemable
    stock meaning any equity security of a person that by its terms
    (or by the terms of any security into which it is convertible or
    for which it is exchangeable or otherwise is required to be
    redeemed or is redeemable at the option of the holder thereof,
    in whole or part, or is exchangeable for debt at any time, in
    whole or in part, on or prior to the maturity date of any of our
    outstanding Indebtedness) of such person at the time of
    determination,(7)
    any payment obligation of such person under interest rate
    protection agreements or exchange rate contracts at the time of
    determination,(8)
    any obligation to pay rent or other payment amounts of such
    person with respect to any direct or indirect arrangement
    pursuant to which property is sold or transferred by such person
    or a wholly-owned Subsidiary of such person and is thereafter
    leased back from the purchaser or transferee thereof by such
    person or one of its wholly-owned Subsidiaries to which such
    person is a party, and(9)
    any obligation of the type referred to in clauses (1)
    through (8) of this paragraph of another person (other than
    endorsements of negotiable instruments for deposit or collection
    in the ordinary course of business) and all dividends of another
    person the payment of which, in either case, such person has
    Guaranteed or is responsible or liable, directly or indirectly,
    as obligor, Guarantor or otherwise. For purposes of this
    definition, the maximum fixed repurchase price of any redeemable
    stock that does not 73




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have a fixed repurchase price shall be calculated in accordance
    with the terms of such redeemable stock as if such redeemable
    stock were repurchased on any date on which Indebtedness shall
    be required to be determined pursuant to the fiscal agency
    agreement or any debt agreement. If such redeemable stock is not
    then permitted to be repurchased, the repurchase price shall be
    the book value of such redeemable stock. The amount of
    Indebtedness of any person at any date shall be the outstanding
    balance at such date of all unconditional obligations as
    described above and the maximum liability of any contingent
    obligations in respect thereof at such date. Subordinated debt
    which constitutes Equity shall not be treated as
    Indebtedness.  Issuer Notice
  Material Adverse Effect
  (a)
    as used in the receivables purchase agreement, the servicing and
    collection agency agreement, the letter agreement and each
    designated customer notice:  
    any material impairment of Petróleos Mexicanos,
    PEPs, PMIs or PMI Services ability to perform
    any of its material obligations or to comply with or conduct any
    of its business in accordance with any of its material
    representations, warranties, covenants or agreements under any
    transaction document;
    any material impairment of the interests, rights or remedies of
    ours, the fiscal agent, the trustee or the collection agent
    under any transaction document or any third party beneficiary
    referred to in Section 7.01 of the receivables purchase
    agreement; or
    any material impairment of collectibility or transferability of
    receivables and  (b)
    as used in the fiscal agency agreement and the indenture:  
    any material impairment of our ability to perform any of our
    material obligations or to comply with or conduct our business
    in accordance with any of our material representations,
    warranties, covenants or agreements under any transaction
    document or
    any material impairment of our ability to perform any of our
    payment obligations or other obligations under any debt
    agreement.  Rating Decline
 74




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rating
    category
  
    with respect to Moodys, any of the following categories:
    Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent
    successor categories);
    with respect to Standard & Poors, any of the
    following categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D
    (or equivalent successor categories); and
    the equivalent of any such category of Moodys or
    Standard & Poors used by Duff & Phelps
    or Fitch, or any other rating agency.    
    Baa3 or above with respect to Moodys or
    BBB- or above with respect to Standard & Poors.  Specified Event Notice
  Subsidiary
  
    any corporation more than 50% of whose stock of any class or
    classes having by the terms thereof ordinary voting power to
    elect a majority of the directors of such corporation
    (irrespective of whether or not at the time stock of any class
    or classes of such corporation shall have or might have voting
    power by reason of the happening of any contingency) is at the
    time owned by such person
    and/or one
    or more Subsidiaries of such person; and
    any partnership, association, joint venture or other entity in
    which such person
    and/or one
    or more Subsidiaries of such person has more than a 50% equity
    interest at the time.  Item 5.
    Operating
    and Financial Review and Prospects.  MANAGEMENTS
    DISCUSSION AND ANALYSIS
    OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   75




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##### Table of Contents



Overview
    
    applying the proceeds of debt, together with other funds
    available to us from time to time (including collections on
    purchased receivables and capital contributions, for example) to:  
    service our outstanding debt; and
    acquire all of the right, title and interest in and to the
    eligible receivables of designated customers which are generated
    through exports of Maya crude oil (or under limited
    circumstances, crude oil other than Maya crude oil); and  
    issuing unsecured debt.    
    compliance by PEP and PMI with their obligations under the
    transaction documents;
    the ability of PEMEX, operating through PMI and PEP, to generate
    sufficient eligible receivables of designated customers; and
    the continued financial capability of the designated customers.            
    international prices for crude oil,
    volumes of crude oil exported to designated customers,
    the frequency of shipments, and
    the amount of future receivables we already own.    and/or
 76




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##### Table of Contents



and/or
  Taxation
    of Pemex Finance
    Basis
    of Presentation
     77




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##### Table of Contents



Principal Payments Due by PeriodLess than 1








After 5Total due


year


1-3 years


4-5 years


years(in millions of U.S. dollars)Long-term
    Debt1998 notes8.02% notes due 2007

$
58.3


$
58.3


$



$



$
9.15% notes due 2018


250















250February 1999
    notes8.45% notes due 2007


8



8











8.875% notes due 2010


200



40



160







February 1999 floating rate
    notesSeries A floating rate notes


100











58



42July 1999
    notes9.69% notes due 2009


330



120



210







10.61% notes due 2017


200















200July 1999 additional
    issuancesSeries B floating rate notes


90















90February 2000
    notes9.03% notes due 2011


680



160



480



40



Subordinated Debt
    ObligationsTotal


234.75















234.75Total

$
2151


$
387


$
850


$
98


$
816     Maturity inMaturity less

Maturity

Maturity

excess of

Total fairSource of Fair Value

than 1 year

1-3 years

4-5 years

5 years

valuePrices actively quoted

$
67


$
560


$
764


$
573


$
1965Prices based on models and other
    valuation methods


0



0



0



524



524    78




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##### Table of Contents



Results
    of Operations
  A
    Three-Year Comparison
  Revenues
    
    earnings on amounts invested in temporary cash investments
    during the period, including pursuant to the liquidity facility
    requirements; and
    earnings on amounts held overnight for us in the collection
    account.    Year Ended December 31,2004


2005


2006(in thousands of U.S. dollars)Interest income from discount on
    purchased accounts receivable

$
428,800


$
304,226


$
218,278Interest income from highly liquid
    temporary investments


3,203



12,412



14,330Total revenues

$
432,003


$
316,638


$
232,608         
    discounts on future (ungenerated) purchased accounts receivable
    are determined by applying the relevant discount rate to the
    daily balance of future eligible receivables;
    discounts on current purchased accounts receivable are
    determined by applying the relevant discount rate to the invoice
    amount of the receivable based on the number of days from
    generation until that current eligible receivable becomes due
    and payable by the designated customer; and
    any unearned discount at the financial statements date is
    presented netting the current purchased accounts receivable.     79




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##### Table of Contents



Interest
    Expenses and Make-whole Premium
     80




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##### Table of Contents



Interest expense during2004


2005


2006(in thousands of U.S. dollars)1998 notes

$
74,975


$
53,978


$
32,232February 1999 notes


42,835



29,508



19,863February 1999 floating rate notes


4,785



6,646



8,410July 1999 notes


99,635



79,649



59,011July 1999 additional issuances


6,418



6,193



7,832February 2000 notes


83,940



77,993



68,177Subordinated debt


86,761



56,852



29,778Insurance premium and amortization
    of debt issuance costs


14,941



7,087



43Redeemed notes make-whole premium






96,377



Total

$
414,290


$
414,283


$
225,346   General
    and Administrative Expenses
        Taxes
    Net
    Income
    Liquidity
    and Capital Resources
   81




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##### Table of Contents




    On February 25, 1999, we issued the February 1999 notes, in
    an aggregate principal amount of U.S.$1.0 billion. On the
    same date, we also issued the February 1999 floating rate notes
    in an aggregate principal amount of U.S.$100 million. Prior
    to issuing the February 1999 notes and the February 1999
    floating rate notes, on February 24, 1999, we received
    U.S.$125 million in the form of subordinated debt issued to
    Petróleos Mexicanos.
    On July 27, 1999, we issued the July 1999 notes, in
    aggregate principal amount of U.S.$1.275 billion. On the
    same date, we also issued additional fixed rate notes having an
    aggregate principal amount of U.S.$50 million and two
    series of floating rate notes having an aggregate principal
    amount of U.S.$125 million. On July 23, 1999, we
    received U.S.$204 million in the form of subordinated debt
    issued to Petróleos Mexicanos.
    On February 10, 2000, we issued the February 2000 notes, in
    aggregate principal amount of U.S.$950 million. On
    February 8, 2000, we received U.S.$136 million in the
    form of subordinated debt issued to Petróleos Mexicanos.
    On January 1, 2002, we issued a new subordinated note to
    Petróleos Mexicanos for U.S.$714.75 million
    consolidating the four subordinated notes we had previously
    issued to Petróleos Mexicanos.    2007 Financing Activities.
  2006 Financing Activities.
  2005 Financing Activities.
    and/or
 82




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##### Table of Contents



2004


2005


2006(in millions of U.S. dollars)Collections on current purchased
    receivables

$
16,078.9


$
19,104.9


$
24,202.2Receivables that were generated
    and became current eligible receivables


1,112.9



1,570.5



1,557.4Receivables to be generated in the
    future*


3,227.0



821.6



541.1     *
    
    Net of future discount.      
    apply the funds to service or refinance existing Indebtedness or
    for other corporate purposes permitted by the fiscal agency
    agreement, or
    transfer the funds to PMI Services, who in turn transfer them to
    PMI to purchase additional eligible receivables of designated
    customers on a daily basis.  Off-balance
    Sheet Arrangements
  Form 20-F.
  Critical
    Accounting Policies
    Item 6.
    Directors,
    Senior Management and Employees.    
    appointed the board of directors of Pemex Finance,
    operates Pemex Finance in accordance with the management
    agreement and the declaration of trust establishing the Pemex
    Finance Trust, and
    convenes shareholders meetings. 83




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##### Table of Contents



Name

Position with Pemex
    Finance

AppointmentEduardo R. Calvo Barbeau

Director and President


2007Darren Riley

Director and Vice President


1998Regina Forman

Director


2003Michael Austin

Independent Director


1998Piccadilly Directors Limited

Director


1998     Eduardo R. Calvo Barbeau
  Darren Riley
  Regina Forman
  Michael Austin
  Piccadilly Directors Limited
  Compensation
    of Directors and Officers
   84




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##### Table of Contents



Employees
    Share
    Ownership
    Item 7.
    Major
    Shareholders and Related Party Transactions.          Item 8.
    Financial
    Information.        Item 9.
    The Offer
    and Listing.   85




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##### Table of Contents



Item 10.
    Additional
    Information.  MEMORANDUM
    AND ARTICLES OF ASSOCIATION
  Register
    Objects
    and Purposes
    Directors
        Rights
    and Obligations of Shareholders
  Dividends
      Voting
    Rights
      Redemption
     86




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##### Table of Contents



Shareholder
    Rights Upon Liquidation
    
    set a fair value on our assets, divide all or part of our assets
    among the shareholders and determine how the assets will be
    divided among shareholders or classes of shareholders; and
    vest all or part of our assets in trustees.    Calls
    on Shares
    Change
    to Rights of Shareholders
    
    getting the written consent of three-fourths of the shareholders
    of that class; or
    passing a special resolution at a meeting of the shareholders of
    that class.    General
    Meetings
    
    by the directors at any time;
    by the sole shareholder by written request; or
    by any two shareholders, should there be more than one
    shareholder, in the same manner as the directors convene general
    meetings.      
    sanctioning a dividend;
    consideration of the accounts, balance sheets, and ordinary
    report of the directors and auditors;
    appointment and removal of directors; and
    fixing of payment of the auditors.     87




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##### Table of Contents



Changes
    in Capital
      
    consolidate and divide all or any of our share capital into
    shares of a larger amount;
    sub-divide existing shares into shares of a smaller amount,
    subject to the provisions of Section 13 of the Companies
    Law (2004 Revision, as amended) of the Cayman Islands; and
    cancel any shares which, at the date of the resolution, are not
    held or agreed to be held by any person.    EXCHANGE
    CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY
    HOLDERS
    (a)
    no governmental laws, decrees or regulations in Cayman Islands
    that restrict the export or import of capital, including
    dividend and other payments to non-resident holders to the
    Cayman Islands, and  (b)
    no limitations on the right of nonresident or foreign owners
    imposed by Cayman Island law or the Memorandum and Articles of
    Association of Pemex Finance to hold or vote our shares.  TAXATION
      Cayman
    Islands Taxation
    U.S.
    Federal Income Taxation
   88




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##### Table of Contents



U.S.
    Holders
  Interest
    and Additional Amounts
    Disposition
    of the Notes.
      Premium
    Market
    Discount
   89




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##### Table of Contents



Non-U.S.
    Holders
  non-U.S. holder),
  non-U.S. holder
  (i)
    that gain is effectively connected with its conduct of a trade
    or business in the United States; or  (ii)
    an individual
    non-U.S. holder
    who is present in the United States for 183 days or more in
    the taxable year of the sale and meets certain other conditions.    Backup
    Withholding and Information Reporting
  non-U.S. holder
  DOCUMENTS
    ON DISPLAY
  Form 20-F, 1-800-SEC-0330 http://www.sec.gov th
 90




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##### Table of Contents



Item 11.
    Quantitative
    and Qualitative Disclosures About Market Risk.        Calendar Year of Expected Maturity Date for Debt(in thousands of U.S. Dollars)December 31, 2006TotalCarrying


FairOutstanding Debt

2007


2008


2009


2010


2011


Thereafter


Value


ValueFixed rate debt

$
386,667


$
333,333


$
303,333


$
213,333


$
40,000


$
450,000


$
1,726,667


$
1,964,684Average interest rate


9.37
%


9.42
%


9.51
%


9.74
%


9.80
%


9.60
%






Variable rate debt floating rate
    notes


















25,000



165,000



190,000



201,882Subordinated debt to PEMEX






















234,750



234,750



322,222       Item 12.
    Description
    of Securities Other than Equity Securities.    Item 13.
    Defaults,
    Dividend Arrearages and Delinquencies.    Item 14.
    Material
    Modifications to the Rights of Security Holders and Use of
    Proceeds.    Item 15.
    Controls
    and Procedures     91




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##### Table of Contents



Item 16.
    [Reserved]  Item 16A.
    Audit
    Committee Financial Expert.      Item 16B.
    Code of
    Ethics.  Form 20-F Form 20-F
  Item 16C.
    Principal
    Accountant Fees and Services.  Audit and
    Non-Audit Fees
    Year Ended December 31,2005


2006Audit fees

$
66,293


$
78,000Audit-related fees






Tax fees






Other fees






Total fees

$
66,293


$
78,000       Item 16D.
    Exemptions
    from the Listing Standards for Audit Committees.    Item 16E.
    Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers.    Item 17.
    Financial
    Statements.   92




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##### Table of Contents



Item 18.
    Financial
    Statements.    Item 19.
    Exhibits.    (a)
    The following financial statements, together with the reports
    of PricewaterhouseCoopers thereon, are filed as a part of this
    annual report:  PageReport of the Independent
    Registered Public Accounting Firm


F-1Balance Sheets


F-2Statements of Income


F-3Statements of Changes in
    Shareholders Equity


F-4Statements of Cash Flows


F-5Notes to the Financial Statements
    December 31, 2006 and 2005


F-6   (b)   Exhibit No:

DescriptionExhibit 1.1

Memorandum and Articles of
    Association of Issuer (incorporated by reference to
    Exhibit 3.1 to the Registration Statement of Pemex Finance
    Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.1

Fiscal and Paying Agency
    Agreement, dated as of December 1, 1998 among the Issuer,
    The Chase Manhattan Bank, as Fiscal Agent, and Chase Manhattan
    Bank Luxembourg S.A., as paying agent (incorporated by reference
    to Exhibit 4.1 to the Registration Statement of Pemex
    Finance Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.2

Amendment to the Fiscal and Paying
    Agency Agreement, dated as of February 10, 2000 among the
    Issuer, The Chase Manhattan Bank, as Fiscal Agent, and Chase
    Manhattan Bank Luxembourg S.A., as paying agent (incorporated by
    reference to exhibit 2.1 to the Registration Statement of
    Pemex Finance Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 27, 2000 (registration statement
    no. 333-12614))Exhibit 2.3

Senior Indenture, dated as of
    December 1, 1998, between the Issuer and The Chase
    Manhattan Bank, as Trustee (incorporated by reference to
    Exhibit 4.2 to the Registration Statement of Pemex Finance
    Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.4

First 8.02% Note Supplemental
    Indenture, dated as of December 1, 1998, between the Issuer
    and The Chase Manhattan Bank, as Trustee (incorporated by
    reference to Exhibit 4.4 to the Registration Statement of
    Pemex Finance Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.5

First 9.15% Note Supplemental
    Indenture, dated as of December 1, 1998, between the Issuer
    and The Chase Manhattan Bank, as Trustee (incorporated by
    reference to Exhibit 4.6 to the Registration Statement of
    Pemex Finance Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.6

Second 8.450% Note
    Supplemental Indenture, dated as of February 25, 1999,
    between the Issuer and The Chase Manhattan Bank, as Trustee
    (incorporated by reference to Exhibit 4.8 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10918))Exhibit 2.7

Second 8.875% Note
    Supplemental Indenture, dated as of February 25, 1999,
    between the Issuer and The Chase Manhattan Bank, as Trustee
    (incorporated by reference to Exhibit 4.10 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10918)) 93




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##### Table of Contents



(b)   Exhibit No:

DescriptionExhibit 2.8

Floating Rate Notes,
    Series A, Supplemental Indenture, dated as of
    February 25, 1999, between the Issuer and The Chase
    Manhattan Bank, as Trustee (incorporated by reference to
    Exhibit 4.11 to the Registration Statement of Pemex Finance
    Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10918))Exhibit 2.9

Third 9.69% Note Supplemental
    Indenture, dated as of July 27, 1999, between the Issuer
    and The Chase Manhattan Bank, as Trustee (incorporated by
    reference to Exhibit 4.13 to the Registration Statement of
    Pemex Finance Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10916))Exhibit 2.10

Third 10.61% Note
    Supplemental Indenture, dated as of July 27, 1999, between
    the Issuer and The Chase Manhattan Bank, as Trustee
    (incorporated by reference to Exhibit 4.15 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10916))Exhibit 2.11

Floating Rate Notes,
    Series B, Supplemental Indenture, dated as of July 27,
    1999, between the Issuer and The Chase Manhattan Bank, as
    Trustee (incorporated by reference to Exhibit 4.17 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10916))Exhibit 2.12

Fourth 9.03% Note
    Supplemental Indenture, dated as of February 10, 2000,
    between the Issuer and The Chase Manhattan Bank, as Trustee
    (incorporated by reference to exhibit 2.19 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 27, 2000 (registration statement
    no. 333-12614))Exhibit 2.13

Receivables Purchase Agreement,
    dated as of December 1, 1998, among the Issuer, P.M.I.
    Comercio Internacional, S.A. de C.V., P.M.I. Services B.V., and
    Pemex Exploración y Producción (incorporated by
    reference to Exhibit 10.1 to the Registration Statement of
    Pemex Finance Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.14

Amendment to the Receivables
    Purchase Agreement, dated as of February 10, 2000, among
    the Issuer, P.M.I. Comercio Internacional, S.A. de C.V., P.M.I.
    Services B.V., and Pemex Exploración y Producción
    (incorporated by reference to exhibit 2.34 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 27, 2000 (registration statement
    no. 333-12614))Exhibit 2.15

Servicing and Collection Agency
    Agreement, dated as of December 1, 1998, among the Issuer,
    P.M.I. Services, B.V., P.M.I. Comercio Internacional, S.A. de
    C.V., in its individual capacity and as Servicer, Petróleos
    Mexicanos, solely as Investment Manager, and UBS AG, New York
    Branch as Collection Agent (incorporated by reference to
    Exhibit 10.2 to the Registration Statement of Pemex Finance
    Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.16

Letter Agreement, dated as of
    December 14, 1998, between the Issuer and Petróleos
    Mexicanos (incorporated by reference to Exhibit 10.3 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.17

Letter Agreement, dated as of
    February 25, 1999, among Petróleos Mexicanos, the
    Issuer, P.M.I. Services B.V., P.M.I. Comercio Internacional,
    S.A. de C.V. and Pemex Exploración y Producción
    (incorporated by reference to Exhibit 10.4 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 11.1

Pemex Finance Ltd. Code of Ethics
    (incorporated by reference to Exhibit 11.1 to our annual
    report on
    Form 20-F
    for the year ended December 31, 2003 filed with the SEC
    (Commission file
    No. 333-10920-01)
    on June 30, 2004)Exhibit 12.1

Certification of our president,
    who performs functions similar to those of a principal executive
    officer and principal financial officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002 94




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##### Table of Contents



(b)   Exhibit No:

DescriptionExhibit 13.1

Certification of our president,
    who performs functions similar to those of a principal executive
    officer and principal financial officer, pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002Exhibit 99.1

Annual report on
    Form 20-F
    of Petróleos Mexicanos, for the year ended
    December 31, 2005, as filed with the SEC (Commission file
    No. 0-99)
    on June 30, 2006 (incorporated herein by reference)Exhibit 99.2

U.S. Market Analysis for Mexican
    Crude Oil, prepared by Purvin & Gertz, Inc.
    (incorporated by reference to exhibit 99.6 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 27, 2000 (registration statement
    no. 333-12614))     95




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##### Table of Contents



SIGNATURE
  Form 20-F
    
      96




---



##### Table of Contents



EXHIBIT INDEX
  Exhibit No.

DescriptionExhibit 1.1

Memorandum and Articles of
    Association of Issuer (incorporated by reference to
    Exhibit 3.1 to the Registration Statement of Pemex Finance
    Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.1

Fiscal and Paying Agency
    Agreement, dated as of December 1, 1998 among the Issuer,
    The Chase Manhattan Bank, as Fiscal Agent, and Chase Manhattan
    Bank Luxembourg S.A., as paying agent (incorporated by reference
    to Exhibit 4.1 to the Registration Statement of Pemex
    Finance Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.2

Amendment to the Fiscal and Paying
    Agency Agreement, dated as of February 10, 2000 among the
    Issuer, The Chase Manhattan Bank, as Fiscal Agent, and Chase
    Manhattan Bank Luxembourg S.A., as paying agent (incorporated by
    reference to exhibit 2.1 to the Registration Statement of
    Pemex Finance Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 27, 2000 (registration statement
    no. 333-12614))Exhibit 2.3

Senior Indenture, dated as of
    December 1, 1998, between the Issuer and The Chase
    Manhattan Bank, as Trustee (incorporated by reference to
    Exhibit 4.2 to the Registration Statement of Pemex Finance
    Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.4

First 8.02% Note Supplemental
    Indenture, dated as of December 1, 1998, between the Issuer
    and The Chase Manhattan Bank, as Trustee (incorporated by
    reference to Exhibit 4.4 to the Registration Statement of
    Pemex Finance Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.5

First 9.15% Note Supplemental
    Indenture, dated as of December 1, 1998, between the Issuer
    and The Chase Manhattan Bank, as Trustee (incorporated by
    reference to Exhibit 4.6 to the Registration Statement of
    Pemex Finance Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.6

Second 8.450% Note
    Supplemental Indenture, dated as of February 25, 1999,
    between the Issuer and The Chase Manhattan Bank, as Trustee
    (incorporated by reference to Exhibit 4.8 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10918))Exhibit 2.7

Second 8.875% Note
    Supplemental Indenture, dated as of February 25, 1999,
    between the Issuer and The Chase Manhattan Bank, as Trustee
    (incorporated by reference to Exhibit 4.10 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10918))Exhibit 2.8

Floating Rate Notes,
    Series A, Supplemental Indenture, dated as of
    February 25, 1999, between the Issuer and The Chase
    Manhattan Bank, as Trustee (incorporated by reference to
    Exhibit 4.11 to the Registration Statement of Pemex Finance
    Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10918))Exhibit 2.9

Third 9.69% Note Supplemental
    Indenture, dated as of July 27, 1999, between the Issuer
    and The Chase Manhattan Bank, as Trustee (incorporated by
    reference to Exhibit 4.13 to the Registration Statement of
    Pemex Finance Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10916))Exhibit 2.10

Third 10.61% Note
    Supplemental Indenture, dated as of July 27, 1999, between
    the Issuer and The Chase Manhattan Bank, as Trustee
    (incorporated by reference to Exhibit 4.15 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10916))Exhibit 2.11

Floating Rate Notes,
    Series B, Supplemental Indenture, dated as of July 27,
    1999, between the Issuer and The Chase Manhattan Bank, as
    Trustee (incorporated by reference to Exhibit 4.17 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10916)) 97




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##### Table of Contents



Exhibit No.

DescriptionExhibit 2.12

Fourth 9.03% Note
    Supplemental Indenture, dated as of February 10, 2000,
    between the Issuer and The Chase Manhattan Bank, as Trustee
    (incorporated by reference to exhibit 2.19 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 27, 2000 (registration statement
    no. 333-12614))Exhibit 2.13

Receivables Purchase Agreement,
    dated as of December 1, 1998, among the Issuer, P.M.I.
    Comercio Internacional, S.A. de C.V., P.M.I. Services B.V., and
    Pemex Exploración y Producción (incorporated by
    reference to Exhibit 10.1 to the Registration Statement of
    Pemex Finance Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.14

Amendment to the Receivables
    Purchase Agreement, dated as of February 10, 2000, among
    the Issuer, P.M.I. Comercio Internacional, S.A. de C.V., P.M.I.
    Services B.V., and Pemex Exploración y Producción
    (incorporated by reference to exhibit 2.34 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 27, 2000 (registration statement
    no. 333-12614))Exhibit 2.15

Servicing and Collection Agency
    Agreement, dated as of December 1, 1998, among the Issuer,
    P.M.I. Services, B.V., P.M.I. Comercio Internacional, S.A. de
    C.V., in its individual capacity and as Servicer, Petróleos
    Mexicanos, solely as Investment Manager, and UBS AG, New York
    Branch as Collection Agent (incorporated by reference to
    Exhibit 10.2 to the Registration Statement of Pemex Finance
    Ltd. and Petróleos Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.16

Letter Agreement, dated as of
    December 14, 1998, between the Issuer and Petróleos
    Mexicanos (incorporated by reference to Exhibit 10.3 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 2.17

Letter Agreement, dated as of
    February 25, 1999, among Petróleos Mexicanos, the
    Issuer, P.M.I. Services B.V., P.M.I. Comercio Internacional,
    S.A. de C.V. and Pemex Exploración y Producción
    (incorporated by reference to Exhibit 10.4 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 30, 1999 (registration statement
    no. 333-10920))Exhibit 11.1

Pemex Finance Ltd. Code of Ethics
    (incorporated by reference to Exhibit 11.1 to our annual
    report on
    Form 20-F
    for the year ended December 31, 2003 filed with the SEC
    (Commission file
    No. 333-10920-01)
    on June 30, 2004)Exhibit 12.1

Certification of our president,
    who performs functions similar to those of a principal executive
    officer and principal financial officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002Exhibit 13.1

Certification of our president,
    who performs functions similar to those of a principal executive
    officer and principal financial officer, pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002Exhibit 99.1

Annual report on
    Form 20-F
    of Petróleos Mexicanos, for the year ended
    December 31, 2005 as filed with the SEC (Commission file
    No. 0-99)
    on June 30, 2006 (incorporated herein by reference)Exhibit 99.2

U.S. Market Analysis for Mexican
    Crude Oil, prepared by Purvin & Gertz, Inc.
    (incorporated by reference to exhibit 99.6 to the
    Registration Statement of Pemex Finance Ltd. and Petróleos
    Mexicanos on
    Form F-4
    filed on September 27, 2000 (registration statement
    no. 333-12614))     98




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##### Table of Contents



PEMEX
    FINANCE LIMITED
    AUDITED FINANCIAL STATEMENTS
    DECEMBER 31, 2006 AND 2005




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##### 



PEMEX
    FINANCE LIMITED
  AUDITED
    FINANCIAL STATEMENTS
  DECEMBER
    31, 2006 AND 2005
  INDEX
   
 Contents

PageReport of
    independent registered public accounting firm


F-1Financial statements:Balance
    sheets


F-2Statements of
    income


F-3Statements of
    changes in stockholders equity


F-4Statements of cash
    flows


F-5Notes to the
    financial statements


F-6




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##### Table of Contents



REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    
                  
 F-1




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##### Table of Contents



PEMEX
    FINANCE LIMITED
 BALANCE SHEETS
  (Notes 1 and 2)
 Thousands of U.S. dollars
  December 31,2006


2005ASSETSCurrent Assets:Cash and cash equivalents

$
37,610


$
178,288Liquidity account (Note 4)


171,606



125,962Current purchased accounts
    receivable (Notes 2b. and 5)


1,557,388



1,570,539Other accounts receivable


8



26Rights to future (ungenerated)
    purchased accounts receivable (Notes 2b. and 5)


541,075



821,655Total current assets


2,307,687



2,696,470Total assets

$
2,307,687


$
2,696,470LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent Liabilities:Current portion of long-term debt
    (Note 6)

$
408,982


$
416,296Accounts payable and accrued
    expenses


482



147Total current liabilities


409,464



416,443Long-Term Liabilities:Long-term debt (Note 6)


1,530,001



1,916,667Subordinated debt to
    Petróleos Mexicanos (Notes 6 and 7)


238,490



238,446Total long-term liabilities


1,768,491



2,155,113Total liabilities


2,177,955



2,571,556SHAREHOLDERS EQUITY
    (Note 10):Capital stock


1



1Retained earnings


129,731



124,913Total shareholders equity


129,732



124,914Total liabilities and
    shareholders equity

$
2,307,687


$
2,696,470    F-2




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##### Table of Contents



PEMEX
    FINANCE LIMITED
  STATEMENTS
    OF INCOME
  (Notes 1 and 2)
 Thousands of U.S. dollars
  Year Ended December 31,2006


2005


2004Revenues:Interest income from discount on
    purchased accounts receivable (Note 2c.)

$
218,278


$
304,226


$
428,800Interest income from highly liquid
    temporary investments


14,330



12,412



3,203Total revenues


232,608



316,638



432,003Interest expense (Notes 6 and
    7)


(225,344
)


(317,906
)


(414,290
)Make-whole premium (Note 6)






(96,377
)General and administrative
    expenses (Note 8)


(2,446
)


(2,781
)


(1,578
)Net income (loss)

$
4,818


$
(100,426
)

$
16,135    F-3




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##### Table of Contents



PEMEX
    FINANCE LIMITED
  STATEMENTS
    OF CHANGES IN SHAREHOLDERS EQUITY
 FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
  (Notes 1, 2 and 10)
 Thousands of U.S. dollars
  TotalCapital


Retained


shareholdersstock


earnings


equityBalances as of January 1, 2004

$
1


$
209,204


$
209,205Net income






16,135



16,135Balances as of December 31,
    2004


1



225,339



225,340Net loss






(100,426
)


(100,426
)Balances as of December 31,
    2005


1



124,913



124,914Net income






4,818



4,818Balances as of December 31,
    2006

$
1


$
129,731


$
129,732    F-4




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##### Table of Contents



PEMEX
    FINANCE LIMITED
  STATEMENTS OF CASH FLOWS
  (Notes 1 and 2)
 Thousands of U.S. dollars
  Year Ended December 31,2006


2005


2004Operating activities:Net income (loss)

$
4,818


$
(100,426
)

$
16,135Adjustments to reconcile net
    income (loss) to net cash provided by operating activities:Amortization of debt issuance costs


44



191



72Change in assets and liabilities:Current purchased accounts
    receivable


1,843



9,682



13,795Other


18



(23
)


12Accounts payable and accrued
    expenses


335



(1,850
)


30Accrued interest payable


(3,979
)


(18,422
)


(2,499
)Liquidity account


(45,644
)


54,883



(2,067
)Collections of accounts
    receivable, net of discounts collected


23,951,434



18,767,169



15,079,561Purchases of accounts receivable
    and rights to future (ungenerated) accounts receivable


(23,659,546
)


(16,807,310
)


(14,749,776
)Net cash provided by operating
    activities


249,323



1,903,894



355,263Financing activities:Subordinated debt reborrowed






70,000Payments of long-term debt


(390,001
)


(1,849,412
)


(344,755
)Net cash used in financing
    activities


(390,001
)


(1,779,412
)


(344,755
)Cash and cash
    equivalents:Net change of the year


(140,678
)


124,482



10,508At the beginning of the year


178,288



53,806



43,298At the end of the year

$
37,610


$
178,288


$
53,806Supplemental cash flow information:Interest and make-whole premium
    paid

$
229,280


$
425,617


$
401,848    F-5




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##### Table of Contents



PEMEX
    FINANCE LIMITED
  NOTES TO
    THE FINANCIAL STATEMENTS
 DECEMBER 31, 2006 AND 2005
  Amounts
    in thousands of U.S. dollars
  NOTE 1THE
    COMPANY:
              NOTE 2SIGNIFICANT
    ACCOUNTING POLICIES:
    a.
    Basis of
    presentation-   F-6




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##### Table of Contents



PEMEX
    FINANCE LIMITED
  NOTES TO
    THE FINANCIAL STATEMENTS  (Continued)
 DECEMBER 31, 2006 AND 2005
  Amounts in thousands of U.S. dollars
  b.
    Accounts
    receivable -          c.
    Revenue
    recognition -    i.
    Discounts on future (ungenerated) purchased accounts receivable
    (Eligible Receivables of Designated Customers that have not yet
    been generated by Comercio) are determined by applying the
    relevant discount rate (as determined on the date on which the
    purchase price for such Eligible Receivables was paid to
    Services) to the daily balance of future Eligible Receivables as
    determined by the purchase date. Such discounts are recorded as
    income from discount on Purchased Eligible Receivables as earned
    on a daily basis using the effective interest method.    ii.
    Discounts on current purchased accounts receivable (Eligible
    Receivables of Designated Customers that have been generated by
    Comercio) are determined by applying the relevant discount rate
    to the corresponding invoice amount based on the number of days
    elapsed from the purchase day to the payment day. The related
    discount is recorded as income when earned during this period
    using the effective interest method. Any unearned discount at
    the date of the financial statements is presented netting the
    current purchased accounts receivable.iii.
    The total amount of the discount on each Eligible Receivable
    (i.e., the total revenue generated by each purchased Eligible
    Receivable) is determined by discounting the invoice amount of
    such Eligible Receivable for the period from the day on which
    the purchased Eligible Receivables is due from the Designated
    Customer to the date on which the purchase price for such
    Eligible Receivables F-7




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##### Table of Contents



PEMEX
    FINANCE LIMITED
  NOTES TO
    THE FINANCIAL STATEMENTS  (Continued)
 DECEMBER 31, 2006 AND 2005
  Amounts in thousands of U.S. dollars
  was paid to Services. As of December 31, 2006 the discount
    rate for Eligible Receivables purchased was 9.74631% (9.59709%
    as of December 31, 2005). During 2006, the discount rate
    applied to purchase Eligible Receivables fluctuated between a
    range of 9.59709% and 9.74631% (between 9.21259% and 9.59709%
    during 2005 and between 9.10530% and 9.21259% during 2004).  d.  Accounting
    estimates -
    e.
    Cash and
    cash equivalents -    f.
    Borrowings
    -    g.
    Provisions
    -    h.
    New
    accounting pronouncements -                   F-8




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##### Table of Contents



PEMEX
    FINANCE LIMITED
  NOTES TO
    THE FINANCIAL STATEMENTS  (Continued)
 DECEMBER 31, 2006 AND 2005
  Amounts in thousands of U.S. dollars
                           F-9




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##### Table of Contents



PEMEX
    FINANCE LIMITED
  NOTES TO
    THE FINANCIAL STATEMENTS  (Continued)
 DECEMBER 31, 2006 AND 2005
  Amounts in thousands of U.S. dollars
  i.
    Segment
    reporting -    NOTE 3
    SIGNIFICANT
    RISKS:                mark-up.
   F-10




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##### Table of Contents



PEMEX
    FINANCE LIMITED
  NOTES TO
    THE FINANCIAL STATEMENTS  (Continued)
 DECEMBER 31, 2006 AND 2005
  Amounts in thousands of U.S. dollars
    NOTE 4
    LIQUIDITY
    ACCOUNT:    NOTE 5
    CURRENT
    AND FUTURE PURCHASED ACCOUNTS RECEIVABLE:   F-11




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##### Table of Contents



PEMEX
    FINANCE LIMITED
  NOTES TO
    THE FINANCIAL STATEMENTS  (Continued)
 DECEMBER 31, 2006 AND 2005
  Amounts in thousands of U.S. dollars
  NOTE 6
    LONG-TERM
    DEBT:    December 31,2006*


2005*December 14, 1998 issuances:8.02% Notes due 2007

$
58,907


$
176,7109.15% Notes due 2018


252,742



252,732Subtotal


311,649



429,442February 25, 1999 issuances:8.450% Notes due 2007


8,421



42,1088.875% Notes due 2010


202,219



202,219Floating Rate Notes due 2014


101,126



100,987Subtotal


311,766



345,314July 27, 1999 issuances:9.69% Notes due 2009


333,997



455,45110.61% Notes due 2017


202,652



202,652Subtotal


536,649



658,103July 27, 1999 additional
    issuances:Floating Rate Notes due 2014


91,243



91,074Subtotal


91,243



91,074February 10, 2000 issuances:9.03% Notes due 2011


687,676



809,030Subtotal


687,676



809,030Total debt


1,938,983



2,332,963Less: Current portion


408,982



416,296Total long-term debt

$
1,530,001


$
1,916,667     *
    
    Includes accrued interest and, if
    applicable, unamortized debt issuance cost.     F-12




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##### Table of Contents



PEMEX
    FINANCE LIMITED
  NOTES TO
    THE FINANCIAL STATEMENTS  (Continued)
 DECEMBER 31, 2006 AND 2005
  Amounts in thousands of U.S. dollars
          Year EndedCurrent portion of debt

$
408,982Long-term debt:2008


333,3342009


303,3332010


213,3342011


65,0002012 and thereafter


615,0001,530,001Total debt

$
1,938,983     December 31, 2006


December 31, 2005Carrying Value


Fair Value


Carrying Value


Fair ValueTotal debt

$
1,938,983


$
2,166,466


$
2,332,963


$
2,639,130Subordinated debt to PEMEX (see
    Note 7)

$
238,490


$
322,222


$
238,446


$
349,554   NOTE 7
    SUBORDINATED
    DEBT TO PEMEX:   F-13




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##### Table of Contents



PEMEX
    FINANCE LIMITED
  NOTES TO
    THE FINANCIAL STATEMENTS  (Continued)
 DECEMBER 31, 2006 AND 2005
  Amounts in thousands of U.S. dollars
      NOTE 8
    TRANSACTIONS
    WITH THE PEMEX GROUP:            NOTE 9
    INCOME
    TAXES:    NOTE 10
    SHAREHOLDERS
    EQUITY:   F-14




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##### Table of Contents



PEMEX
    FINANCE LIMITED
  NOTES TO
    THE FINANCIAL STATEMENTS  (Continued)
 DECEMBER 31, 2006 AND 2005
  Amounts in thousands of U.S. dollars
      NOTE 11
    DIFFERENCES BETWEEN IFRS AND ACCOUNTING PRINCIPLES GENERALLY
    ACCEPTED IN THE UNITED STATES (U.S. GAAP):
       F-15