##### Table of Contents



As
filed with the Securities and Exchange Commission on June 27, 2008
   UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C.20549
 FORM 20-F
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 for the fiscal year ended December 31, 2007
 Commission File Number 333-10916-01
 Pemex Finance Ltd.
  Cayman Islands  (Jurisdiction of incorporation or organization)
 BNP Paribas Bank & Trust
Cayman Limited
P.O. Box 10632APO
3rd Floor, Royal Bank House
Shedden Road
George Town
Grand Cayman
Cayman Islands
 darren.riley@bnpparibas.ky  (Name, telephone,
e-mail and/or facsimile number and address of company contact
person)
 None  None
 $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$200,000,000 10.61% Notes due 2017
 1,000 ordinary shares.
 Yes o No þ
 Yes o No þ
 Yes þ No o
  Large accelerated filero
    
    Accelerated filero
    
    Non-accelerated filerþ
  U.S. GAAPo
    
    IFRSþ
    
    Othero
 Item
17 o Item 18 þ
 Yes o No þ




---



##### 



TABLE OF CONTENTS
 PageItem 1. Identity of Directors, Senior Management, and Advisers
    
    
    1Item 2. Offer Statistics and Expected Timetable
    
    
    1Item 3. Key Information
    
    
    1Item 4. Information on the Company
    
    
    12Item 5. Operating and Financial Review and Prospects
    
    
    72Item 6. Directors, Senior Management and Employees
    
    
    80Item 7. Major Shareholders and Related Party Transactions
    
    
    82Item 8. Financial Information
    
    
    82Item 9. The Offer and Listing
    
    
    82Item 10. Additional Information
    
    
    83Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    88Item 12. Description of Securities Other than Equity Securities
    
    
    88Item 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    88Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    88Item 15T. Controls and Procedures
    
    
    88Item 16. [Reserved]
    
    
    89Item 16A. Audit Committee Financial Expert
    
    
    89Item 16B. Code of Ethics
    
    
    90Item 16C. Principal Accountant Fees and Services
    
    
    90Item 16D. Exemptions from the Listing Standards for Audit Committees
    
    
    90Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    90Item 17. Financial Statements
    
    
    90Item 18. Financial Statements
    
    
    90Item 19. Exhibits
    
    
    91Exhibit 12.1Exhibit 13.1
   i




---



##### Table of Contents



INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
  CERTAIN DEFINED TERMS AND CONVENTIONS
  FACTORS AFFECTING FORWARD LOOKING STATEMENTS
 Item 4. Information on the
CompanyDescription of Business Item 5. Operating and Financial Review and ProspectsManagements Discussion and Analysis of
Financial Condition and Results of Operations
   CURRENCY OF PRESENTATION
 nuevo peso
  ii




---



##### 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
  Item 5. Operating and Financial Review and Prospects Item 18. Financial Statements
 Year ended December 31,2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007(in thousands of U.S. dollars)Income Statement Data(1)Revenues
    
    $
    459,001
    
    
    $
    432,003
    
    
    $
    316,638
    
    
    $
    232,608
    
    
    $
    191,921Interest expense
    
    
    (440,379
    )
    
    
    (414,290
    )
    
    
    (317,906
    )
    
    
    (225,344
    )
    
    
    (188,853
    )Make-whole premium
    
    
    
    
    
    
    
    
    
    
    (96,377
    )General and administrative expenses
    
    
    (1,550
    )
    
    
    (1,578
    )
    
    
    (2,781
    )
    
    
    (2,446
    )
    
    
    (2,499
    )Net (loss) income
    
    $
    17,072
    
    
    $
    16,135
    
    
    $
    (100,426
    )
    
    $
    4,818
    
    
    $
    (569
    )
 
 (1)
    
    Amounts are the same when calculated under both IFRS as issued by IASB and U.S. GAAP.  1




---



##### Table of Contents



As of December 31,2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007(in thousands of U.S. dollars)Balance Sheet Data(1)Cash and cash equivalents and
liquidity account
    
    $
    222,076
    
    
    $
    234,651
    
    
    $
    304,250
    
    
    $
    209,216
    
    
    $
    417,662Current purchased accounts receivable
    
    
    1,015,135
    
    
    
    1,108,076
    
    
    
    1,570,539
    
    
    
    1,557,388
    
    
    
    1,499,225Rights to future (ungenerated)
purchased accounts receivable
    
    
    3,690,179
    
    
    
    3,253,658
    
    
    
    821,655
    
    
    
    541,075
    
    
    
    0Total assets
    
    
    4,927,405
    
    
    
    4,596,388
    
    
    
    2,696,470
    
    
    
    2,307,687
    
    
    
    1,916,887Current liabilities
    
    
    387,033
    
    
    
    379,897
    
    
    
    416,443
    
    
    
    409,464
    
    
    
    351,431Long-term debt
    
    
    4,331,167
    
    
    
    3,991,151
    
    
    
    2,155,113
    
    
    
    1,768,491
    
    
    
    1,435,155Total liabilities
    
    
    4,718,200
    
    
    
    4,371,048
    
    
    
    2,571,556
    
    
    
    2,177,955
    
    
    
    1,786,586Capital stock
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    1Total shareholders equity
    
    
    209,205
    
    
    
    225,340
    
    
    
    124,914
    
    
    
    129,732
    
    
    
    130,301Total liabilities and shareholders
equity
    
    $
    4,927,405
    
    
    $
    4,596,388
    
    
    $
    2,696,470
    
    
    $
    2,307,687
    
    
    $
    1,916,887
 
 (1)
    
    Amounts are calculated under IFRS as issued by IASB. 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.
  2




---



##### Table of Contents



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.
  Item 5. Operating and Financial Review and ProspectsManagements Discussion and Analysis of
Financial Condition and Results of OperationsLiquidity and Capital Resources Risks Related to
PEMEX, PEP and PMICrude oil prices are volatile, and low oil prices negatively affect PEMEXs
income Item 4. Information on the
CompanyDescription of BusinessPEMEXs Customers and Receivables
 PEP may not produce sufficient crude oil to permit the creation of enough eligible
receivables Risks Related to PEMEX, PEP and PMI
 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.
  Item 4. Information on the CompanyDescription of Principal AgreementsThe Fiscal
Agency AgreementEvents of Default Funding and Administration of Retention Account
 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.
   3




---



##### Table of Contents




    
    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.
 Item 4. Information on the CompanyDescription of Principal
AgreementsThe Receivables Purchase AgreementSubstitution and Repurchase of Receivables
 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.
  4




---



##### Table of Contents



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.
    Treatment Under Netherlands Law
 Treatment Under New York Law
  Item 5. Operating
and Financial Review and
ProspectsManagements Discussion and Analysis of Financial Condition and Results of
OperationsLiquidity and Capital Resources
  5




---



##### Table of Contents



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.
   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.
 Item 4. Information on the
CompanyDescription of Principal AgreementsThe Fiscal Agency AgreementFunding and
Administration of Retention Account
  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.
 Item 4. Information on the CompanyDescription of
Principal AgreementsThe Servicing and Collection Agency AgreementDuties of the Servicer
  6




---



##### Table of Contents



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.
   
    
    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 Risks Related to Mexico
  7




---



##### Table of Contents



Crude oil and natural gas prices are volatile, and low oil and natural gas prices negatively affect
PEMEXs income.
    The Mexican Government has entered into agreements with other nations to limit production.
  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.
  PEMEX is an integrated oil and gas company and is exposed to production, equipment and
transportation risks and deliberate acts of terror.
   8




---



##### Table of Contents



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.
   9




---



##### Table of Contents



Changes in Mexican taxes may occur which may allow us to redeem the Notes without paying a premium
to holders of Notes.
   
    
    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.
   10




---



##### Table of Contents



Changes in exchange rates or in Mexicos exchange control laws may hamper our ability to make
payments on the Notes.
   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.
 Item 4. Information on the CompanyDescription of Principal
AgreementsThe Fiscal Agency AgreementEvents of Default Specified Events
  11




---



##### Table of Contents



Actual Results of Our Operations May Differ From Those Contained in Forward-Looking Statements .
   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.
  
 Item 4. Information on the Company.
 DESCRIPTION OF BUSINESS
  The Designated Customers and
Eligible ReceivablesCrude Oil
 rd
  12




---



##### Table of Contents



Business
    
    
    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.
     13




---



##### Table of Contents



Year ended December 31,2005
    
    
    2006
    
    
    2007(in thousands of U.S. dollars)Interest income from
discount on purchased
accounts receivable
    
    $
    304,226
    
    
    $
    218,278
    
    
    $
    175,296Interest income from highly
liquid temporary investments
    
    
    12,412
    
    
    
    14,330
    
    
    
    16,625Total revenues
    
    $
    316,638
    
    
    $
    232,608
    
    
    $
    191,921
  
    
    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.
 Item 5. Operating and Financial Review and Prospects
  14




---



##### Table of Contents



Summary of Principal Agreements and Flow of Funds
 
 
  15




---



##### Table of Contents



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  for a more detailed description of these principal agreements. See also the section
entitled   where we define the capitalized terms
that appear in this annual report.
 The Designated Customers and
Eligible Receivables
 The Principal Agreements
 1.
    
    The Crude Oil Sale Agreement. PEP sells crude oil to PMI under a crude oil sale agreement
which has been in place since November 1, 1994. PEP and PMI may not terminate the crude oil
sale agreement prior to the termination of the receivables purchase agreement.2.
    
    The Receivables Purchase Agreement. We, PEP, PMI and PMI Services are parties to the
receivables purchase agreement under which:
 
    
    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.
 3.
    
    The Fiscal Agency Agreement. We entered into the fiscal agency agreement with The Chase
Manhattan Bank (now The Bank of New York), as the fiscal agent and paying agent, and Chase
Manhattan Bank Luxembourg S.A. (now The Bank of New York (Luxembourg) S.A.), as paying agent
in Luxembourg. We make interest and principal payments on all of our outstanding debt,
including the Notes, through the fiscal agent. Under the fiscal agency agreement, we agree,
among other things, to:
 
    
    comply with specified financial covenants;
    
    limit our activities to the purchase of existing and future receivables and the
issuance of debt;
  16




---



##### Table of Contents




    
    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 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.
 On any business day, amounts in the retention account are used to pay accelerated debt
service, if any, that is due and payable on that day. Holders of our Indebtedness receive
payments from the retention account proportionate to the amounts of accelerated debt service
we owe them.4.
    
    The Designated Customer Notices. We, Petróleos Mexicanos, PEP, PMI and PMI Services jointly
notified each designated customer through a designated customer notice that the eligible
receivables owed by the designated customer may have been sold to us.5.
    
    The Servicing and Collection Agency Agreement. We entered into the servicing and collection
agency agreement with PMI Services, PMI, Petróleos Mexicanos and UBS AG. Under this
agreement, UBS AG acted as the initial collection agent. On October 1, 1999, Standard
Chartered Bank replaced UBS AG as collection agent, in accordance with the terms of the
servicing and collection agency agreement. Under the servicing and collection agency
agreement, PMI acts as the servicer. The servicer services, manages, administers and collects
any eligible receivables that are sold as described above.6.
    
    The Subordinated Debt. Petróleos Mexicanos provided us with subordinated debt for our
initial capitalization and again each time we issued notes as necessary to maintain the
required debt to equity ratio specified in the transaction documents.7.
    
    The Letter Agreement. Petróleos Mexicanos agreed with us in a letter agreement to cause PEP,
PMI Services and PMI to perform their material obligations under the receivables purchase
agreement and the crude oil sale agreement under which PEP sells crude oil to PMI.Under the fiscal agency agreement, our performance of our obligations is intended to be for
the benefit of the trustee and any other agent or representative of holders of our
Indebtedness named under any of our debt agreements. The receivables purchase agreement and
the servicing and collection agency agreement
are similar: they provide that PEPs, PMIs, PMI Services and our rights and performance
under those agreements are intended for the benefit of the trustee and any other agent or
representative of holders of our Indebtedness.
  17




---



##### Table of Contents



The Flow of Funds Under the Agreements
 1.
    
    Petróleos Mexicanos provided us with subordinated debt for our initial capitalization and
again each time we issued notes.2.
    
    We issued four series of fixed rate notes in December 1998, four series of fixed rate notes
and one series of floating rate notes in February 1999, five series of fixed rate notes and
two series of floating rate notes in July 1999 and two series of fixed rate notes in February
2000. In the future we may issue additional debt.3.
    
    We purchase the eligible receivables from PMI Services and PMI Services purchases the
eligible receivables from PMI.4.
    
    The designated customers make their payments on the receivables for the crude oil they
purchase from PMI, whether or not for Maya crude oil, into the collection account when
payments are due.5.
    
    The collection agent allocates the money received from the designated customers to us, PMI
Services, PMI and the retention account, if applicable, in accordance with the servicing and
collection agency agreement. We fund and maintain the liquidity facility.6.
    
    We make payments of principal and interest on our debt, including the Notes, to the holders
when those payments are due. We buy additional receivables and cover our general corporate
expenses, including any insurance premiums.7.
    
    We make periodic payments on our subordinated debt to Petróleos Mexicanos.
 PMI Services
  Taxation of PMI Services
    Property, Plants and Equipment
   18




---



##### Table of Contents



The Designated Customers and Eligible Receivables
 Description of Principal AgreementsThe Receivables
Purchase Agreement
 Crude Oil
   Selection of the Designated Customers
      19




---



##### Table of Contents




    
    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
    
    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.
  20




---



##### Table of Contents



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.
   21




---



##### Table of Contents



Designated Customer
    
    Total Years of RelationshipChevron U.S.A. Inc. (1)
    
    
    31CITGO Petroleum Corp. (1)
    
    
    30Conoco-Phillips Company (1)
    
    
    24Exxon Mobil Sales and Supply Corporation (1)
    
    
    30Hunt Crude Oil Supply Company (1)
    
    
    22Marathon Petroleum Supply L.L.C. (1)
    
    
    27Pecten Trading Company (1)
    
    
    32Petro-Canada (1)
    
    
    28P.M.I. Norteamérica S.A. de C.V. (1)
    
    
    15Shell (US) Trading Co. (STUSCO)(2)
    
    
    7Trigeant Ltd/Marine Asphalt Ltd/Trigenr EP (1)
    
    
    8Valero Marketing and Supply Co. (1)
    
    
    14
 
 (1)
    
    Purchases of Maya crude oil from PMI made in 2007 and 2008 through May 31.(2)
    
    Maya crude oil supply for Shell is sent to Canada. Motiva Enterprises and Equiva Trading Co
buy cargoes for the USA market.    The Eligible Receivables
   
    
    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);
  22




---



##### Table of Contents




    
    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.
  Description of Principal AgreementsThe Receivables Purchase AgreementSubstitution and
Repurchase of Receivables
 Description of Principal AgreementsThe Receivables
Purchase AgreementCovenants
   23




---



##### Table of Contents



PEMEXs Customers and Receivables
  Overview
    
    
    80.2% were to the United States,
    
    7.4% were to Spain,
    
    4.1% were to the Netherlands Antilles,
    
    1.8% were to Canada, and
    
    6.5% were to others.
  
    
    1,200 tbpd were exported to the United States designated customers,
    
    22 tbpd were exported to the Canadian designated customers, and
    
    69 tbpd were exported to the Aruban designated customers.
     24




---



##### Table of Contents



Crude Oil Exports
 Base de Datos Institucional
  25




---



##### Table of Contents



Source:
    
    Pemex BDI and PMIs operating statistics.  26




---



##### Table of Contents



Year Ended December 31,2003

    
    2004

    
    2005

    
    2006

    
    2007(tbpd)
    
    
    (%)
    
    
    (tbpd)
    
    
    (%)
    
    
    (tbpd)
    
    
    (%)
    
    
    (tbpd)
    
    
    (%)
    
    
    (tbpd)
    
    
    (%)Crude Oil Exports (by volume)Olmeca (API gravity of 38°-39°)
    
    
    216
    
    
    
    12
    %
    
    
    221
    
    
    
    12
    %
    
    
    216
    
    
    
    12
    %
    
    
    231
    
    
    
    13
    %
    
    
    173
    
    
    
    10
    %Isthmus (API gravity of 32°-33°)
    
    
    25
    
    
    
    1
    
    
    
    27
    
    
    
    1
    
    
    
    81
    
    
    
    4
    
    
    
    68
    
    
    
    4
    
    
    
    41
    
    
    
    2Maya (API gravity of 21°-22°)
    
    
    1,590
    
    
    
    86
    
    
    
    1,608
    
    
    
    86
    
    
    
    1,506
    
    
    
    83
    
    
    
    1,480
    
    
    
    81
    
    
    
    1,460
    
    
    
    87Altamira (API gravity 15.0°-16.5°)
    
    
    14
    
    
    
    1
    
    
    
    13
    
    
    
    1
    
    
    
    15
    
    
    
    1
    
    
    
    14
    
    
    
    1
    
    
    
    13
    
    
    
    1Total
    
    
    1,844
    
    
    
    100
    %
    
    
    1,870
    
    
    
    100
    %
    
    
    1,817
    
    
    
    100
    %
    
    
    1,793
    
    
    
    100
    %
    
    
    1,686
    
    
    
    100
    %
 
 Notes:
    
    Numbers may not total due to rounding.tbpd = thousand barrels per day.Source:
    
    PMI operating statistics, which are based on information in bills of lading. Year Ended December 31,2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007(U.S. dollars per barrel)Crude Oil PricesWeighted average realized price
    
    $
    24.78
    
    
    $
    31.05
    
    
    $
    42.71
    
    
    $
    53.04
    
    
    $
    61.64Olmeca
    
    
    29.32
    
    
    
    39.34
    
    
    
    53.91
    
    
    
    64.67
    
    
    
    70.89Isthmus
    
    
    28.08
    
    
    
    38.04
    
    
    
    53.11
    
    
    
    57.29
    
    
    
    69.92Maya
    
    
    24.13
    
    
    
    29.82
    
    
    
    40.61
    
    
    
    51.10
    
    
    
    60.38Altamira
    
    
    22.81
    
    
    
    28.12
    
    
    
    36.08
    
    
    
    47.74
    
    
    
    53.71
 
 Source:
    
    PMI operating statistics, which are based on information in bills of lading.  Geographic Distribution of Exports
  Exports by Country of Destination of Shipment
 Percentage ofExportsCountryUnited States of America
    
    
    80.2
    %Spain
    
    
    7.4Netherlands Antilles
    
    
    4.1Canada
    
    
    1.8India
    
    
    2.1Others
    
    
    4.4Total
    
    
    100
    %
 
 Note:
    
    Numbers may not total due to roundingSource:
    
    PMI operating statistics, which are based on information in bills of lading.  27




---



##### Table of Contents



Composition and Geographic Distribution of Crude Oil Export Sales
 At December 31,2003
    
    2004
    
    2005
    
    2006
    
    2007(tbpd)
    
    
    (%)
    
    
    (tbpd)
    
    
    (%)
    
    
    (tbpd)
    
    
    (%)
    
    
    (tbpd)
    
    
    (%)
    
    
    (tbpd)
    
    
    (%)PMI Crude Oil Export Sales to:United States and Canada
    
    
    1,466.72
    
    
    
    79.54
    %
    
    
    1,510.12
    
    
    
    80.74
    %
    
    
    1,464.35
    
    
    
    80.59
    %
    
    
    1,476.73
    
    
    
    82.37
    %
    
    
    1,383.47
    
    
    
    82.05
    %Europe
    
    
    175.72
    
    
    
    9.53
    
    
    
    178.43
    
    
    
    9.54
    
    
    
    193.89
    
    
    
    10.67
    
    
    
    170.77
    
    
    
    9.53
    
    
    
    163.28
    
    
    
    9.68Central and South America
    
    
    137.05
    
    
    
    7.43
    
    
    
    145.47
    
    
    
    7.78
    
    
    
    124.74
    
    
    
    6.86
    
    
    
    113.19
    
    
    
    6.31
    
    
    
    104.15
    
    
    
    6.18Far East
    
    
    63.22
    
    
    
    3.43
    
    
    
    36.31
    
    
    
    1.94
    
    
    
    34.15
    
    
    
    1.88
    
    
    
    32.03
    
    
    
    1.79
    
    
    
    35.24
    
    
    
    2.09Africa
    
    
    1.21
    
    
    
    0.07
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    1,843.92
    
    
    
    100.0
    %
    
    
    1,870.32
    
    
    
    100.0
    %
    
    
    1,817.14
    
    
    
    100.0
    %
    
    
    1,792.73
    
    
    
    100.0
    %
    
    
    1,686.14
    
    
    
    100.0
    %Olmeca (API gravity of 38°-39°)United States and Canada
    
    
    194.93
    
    
    
    10.57
    %
    
    
    207.77
    
    
    
    11.11
    %
    
    
    200.12
    
    
    
    11.01
    %
    
    
    213.56
    
    
    
    11.91
    %
    
    
    160.08
    
    
    
    9.49
    %Others
    
    
    20.70
    
    
    
    1.12
    
    
    
    13.65
    
    
    
    0.73
    
    
    
    15.69
    
    
    
    0.86
    
    
    
    17.04
    
    
    
    0.95
    
    
    
    12.64
    
    
    
    0.75Total
    
    
    215.64
    
    
    
    11.69
    %
    
    
    221.42
    
    
    
    11.84
    %
    
    
    215.80
    
    
    
    11.88
    %
    
    
    230.60
    
    
    
    12.86
    %
    
    
    172.72
    
    
    
    10.24
    %Isthmus (API gravity of 32°-33°)United States and Canada
    
    
    10.77
    
    
    
    0.58
    %
    
    
    5.54
    
    
    
    0.30
    %
    
    
    37.67
    
    
    
    2.07
    %
    
    
    41.50
    
    
    
    2.31
    %
    
    
    15.80
    
    
    
    0.94
    %Others
    
    
    14.15
    
    
    
    0.77
    
    
    
    21.82
    
    
    
    1.17
    
    
    
    43.30
    
    
    
    2.38
    
    
    
    26.80
    
    
    
    1.49
    
    
    
    25.34
    
    
    
    1.50Total
    
    
    24.91
    
    
    
    1.35
    %
    
    
    27.36
    
    
    
    1.46
    %
    
    
    80.97
    
    
    
    4.46
    %
    
    
    68.29
    
    
    
    3.81
    %
    
    
    41.14
    
    
    
    2.44
    %Maya (API gravity of 21°-22°)United States and Canada
    
    
    1,247.27
    
    
    
    67.64
    %
    
    
    1,283.38
    
    
    
    68.62
    %
    
    
    1,211.85
    
    
    
    66.69
    %
    
    
    1,207.98
    
    
    
    67.38
    %
    
    
    1,194.91
    
    
    
    70.87
    %Others
    
    
    342.35
    
    
    
    18.57
    
    
    
    324.74
    
    
    
    17.36
    
    
    
    293.80
    
    
    
    16.17
    
    
    
    271.54
    
    
    
    15.15
    
    
    
    264.70
    
    
    
    15.70Total
    
    
    1,589.62
    
    
    
    86.21
    %
    
    
    1,608.12
    
    
    
    85.98
    %
    
    
    1,505.65
    
    
    
    82.86
    %
    
    
    1,479.52
    
    
    
    82.53
    %
    
    
    1,459.60
    
    
    
    86.56
    %Altamira (API gravity of
15.0°-16.5°)United States and Canada
    
    
    13.75
    
    
    
    0.75
    %
    
    
    13.43
    
    
    
    0.72
    %
    
    
    14.72
    
    
    
    0.81
    %
    
    
    13.70
    
    
    
    0.76
    %
    
    
    12.68
    
    
    
    0.75
    %Others
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.61
    
    
    
    0.03
    
    
    
    
    
    
    
    Total
    
    
    13.75
    
    
    
    0.75
    %
    
    
    13.43
    
    
    
    0.72
    %
    
    
    14.72
    
    
    
    0.81
    %
    
    
    14.31
    
    
    
    0.80
    %
    
    
    12.68
    
    
    
    0.75
    %
 
 Notes:
    
    Numbers may not total due to rounding.tbpd = thousand barrels per day.Source:
    
    PMI operating statistics, which are based on information in bills of lading.  28




---



##### Table of Contents



Sales to Designated Customers
  2005
    

    2006
    
    2007Exports of all types of crude oil to
designated customers as a percentage
of total exports
    
    
    87.0
    %
    
    
    87.5
    %
    
    
    88.1
    %Exports of Maya Crude Oil to designated
customers as a percentage of total exports of
Maya Crude Oil
    
    
    86.7
    %
    
    
    86.6
    %
    
    
    87.7
    %
    2003
    

    2004
    

    2005
    

    2006
    

    2007tbpd
    
    
    %
    

    tbpd
    
    
    %
    

    Tbpd
    
    
    %
    

    tbpd
    
    
    %
    

    tbpd
    
    
    %PMI NASA
    
    
    16
    
    
    
    1.2
    %
    
    
    31
    
    
    
    2.2
    %
    
    
    38
    
    
    
    2.8
    %
    
    
    34
    
    
    
    2.6
    %
    
    
    103
    
    
    
    8.0
    %Non-Affiliates
    
    
    1,350
    
    
    
    98.8
    
    
    
    1,380
    
    
    
    97.8
    
    
    
    1,282
    
    
    
    97.2
    
    
    
    1,260
    
    
    
    97.4
    
    
    
    1,188
    
    
    
    92.0Total
    
    
    1,366
    
    
    
    100.0
    %
    
    
    1,411
    
    
    
    100.0
    %
    
    
    1,319
    
    
    
    100.0
    %
    
    
    1,294
    
    
    
    100.0
    %
    
    
    1,291
    
    
    
    100.0
    %
 
 Note:
    
    Numbers may not total due to rounding.Source:
    
    PMI.  Total Crude Oil Exported by Type as of December 31, 2007Type of Crude Oil ExportedIsthmus
    
    

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
    
    
    
    
    
    $
    
    
    
    
    9
    
    
    $
    235
    
    
    
    103
    
    
    $
    2,340
    
    
    
    
    
    
    $
    
    
    
    
    112
    
    
    $
    2,575Third parties
    
    
    41
    
    
    
    1,050
    
    
    
    164
    
    
    
    4,234
    
    
    
    1,357
    
    
    
    29,830
    
    
    
    13
    
    
    
    249
    
    
    
    1,574
    
    
    
    35,362Total
    
    
    41
    
    
    $
    1,050
    
    
    
    173
    
    
    $
    4,469
    
    
    
    1,460
    
    
    $
    32,170
    
    
    
    13
    
    
    $
    249
    
    
    
    1,686
    
    
    $
    37,937
 
 Note:
    
    Numbers may not total due to rounding.Source:
    
    PMI.  29




---



##### Table of Contents



Accounts Receivable Purchased by Pemex Finance by Customer Affiliation for Designated Customers
(Maya crude oil only)
(as of December 31, 2007)
 Accounts Receivable(millions of U.S. dollars)Type of CustomerPMI NASA
    
    $
    0Third parties
    
    $
    1,503Total
    
    $
    1,503
 PMIs Delinquency and Loss Experience
   Maximum Number of Days ofYear
    
    Past Due Accounts1996
    
    
    41997
    
    
    71998
    
    
    51999
    
    
    32000
    
    
    42001
    
    
    42002
    
    
    72003
    
    
    62004
    
    
    42005
    
    
    52006
    
    
    32007
    
    
    5
  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.
    30




---



##### 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)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 31
    
    
    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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007March 31
    
    
    6,977.52
    
    
    
    6,977.52June 30
    
    
    8,467.77
    
    
    
    8,467.77September 30
    
    
    9,612.34
    
    
    
    9,612.34December 31
    
    
    11,571.17
    
    
    
    11,571.17
 
 (1)
    
    All designated customers have 30 days from the bill of lading to pay each invoice.Source:
    
    PMI. Credit and Collection Policies
 Credit Approval Process
  
    
    from an open account,
    
    through a letter of credit, or
    
    with advance payments.
   31




---



##### 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
   Monitoring of Existing Accounts
   32




---



##### Table of Contents



Marketing
   Sales to Affiliates .
 Sales to Third Parties .
 DESCRIPTION OF PRINCIPAL AGREEMENTS
     33




---



##### Table of Contents



th
 Glossary of Certain Defined Terms Used Primarily Under the Captions
Description of the Principal Agreements Description of the Indenture
 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
    34




---



##### 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;
    
    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.
  35




---



##### Table of Contents




    
    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;
    
    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;
  36




---



##### Table of Contents




    
    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.
  
    
    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.
  37




---



##### Table of Contents




    
    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 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.
  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.
  38




---



##### Table of Contents



(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
  (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.
  39




---



##### Table of Contents



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.
  
    
    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.
  40




---



##### Table of Contents




    
    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.
  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.
  41




---



##### Table of Contents



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;
 
    
    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.
  42




---



##### Table of Contents



Financial Covenants
 Limitation on Restricted
Payments
 
    
    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 bythe maximum aggregate amount of scheduled debt service for any fiscal quarter
during which our Indebtedness is outstanding.By debt service we mean all interim and final (at scheduled maturity, upon
acceleration or otherwise) payments of principal, including any amount in respect of
original issue discount, of, and premium, if any, and interest on, including additional
amounts or similar gross-ups in respect of taxes, and other amounts, including fees and
commissions, in respect of our Indebtedness, including any payments, prepayments,
redemptions and repurchases of Indebtedness.By scheduled debt service we mean, on any date, payments of principal of, and premium,
if any, interest on, and other amounts, including fees and commissions, in respect of
our Indebtedness that are scheduled to become due and payable on or after that date in
amounts that are determinable as of that date, assuming prevailing interest rates in the
case of floating rate Indebtedness.
 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.
  43




---



##### Table of Contents



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 as issued by IASB) 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
   Compliance with Law and Contractual Obligations
  Delivery of Collections
   44




---



##### Table of Contents



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;
 (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 as issued by IASB) or U.S. GAAP; and
  45




---



##### Table of Contents



(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 as
issued by IASB) 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.
   
    
    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.
  46




---



##### Table of Contents




    
    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;
 
    
    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.
  47




---



##### Table of Contents



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.
  48




---



##### Table of Contents



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.
  49




---



##### Table of Contents




    
    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 3⁄4Liquidity 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 covenantby 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;
 For purposes of determining whether a failure to comply with the Debt Service
Coverage Ratio covenant or the Total Liabilities to Equity Ratio covenant has
been cured, any capital contributions obtained after we became aware of the failure
to comply will be considered payments made to us by obligors on purchased
receivables during the three months immediately prior to such failure.(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;By change of control, we mean the occurrence of any of the following events:
 
    
    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;
  50




---



##### Table of Contents




    
    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;
 and the aggregate value of (1) and (2) together is less than the outstanding
principal amount of our Indebtedness as of the date of determination. However, if
that failure results from a defect in the validity of the ownership interest or an
encumbrance which may be cured or removed, and we are taking steps to effect the
cure or removal, then the failure will have to have continued for a period of 10
days for it to constitute an event of default.By next payment of scheduled debt service, we mean, on any date of determination
for any debt agreement, the amount of the first payment of scheduled debt service on
the outstanding Indebtedness under that debt agreement that is scheduled to be paid
after that date of determination. Amounts scheduled to be paid on the same date
shall be treated as a single payment whether the amounts are principal, interest or
otherwise.(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
 
    
    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;
  51




---



##### Table of Contents



(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;
  52




---



##### Table of Contents



(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
 
    
    80% of PMIs total eligible receivables generated from sales of Maya crude
oil;
  53




---



##### Table of Contents



(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
3⁄4Acceptable 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.
  54




---



##### Table of Contents



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
  Glossary of Certain Defined Terms Used Primarily Under the Captions
Description of Principal Agreements Description of the Indenture
  55




---



##### Table of Contents




    
    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;
  56




---



##### Table of Contents




    
    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;
 
    
    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
 The Fiscal Agency AgreementFunding and
Administration of Retention Account
   
    
    if it fails to perform its duties, or
 
    
    if it ceases to meet the qualifications specified in the servicing and collection
agency agreement.
  57




---



##### Table of Contents



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.
  58




---



##### Table of Contents




    
    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.
   59




---



##### Table of Contents




    
    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;
 
    
    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.
  60




---



##### Table of Contents



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 Mexicanos and PEP. Therefore, Petróleos Mexicanos is entitled to immunity in
respect to such exclusive rights and power.
   61




---



##### Table of Contents



DESCRIPTION OF THE INDENTURE
  Series of Note
    
    Principal Amount
    
    Final Maturity
    
    Supplemental Indenture1998 notes9.15% 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 notes8.875% 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 notes9.69% 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, 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 IssuancesSeries 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, 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, 2000
       62




---



##### Table of Contents



(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 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).
 Glossary of Certain Defined Terms Used Primarily Under the
Captions Description of Principal Agreements Description of the Indenture
 General
  Covenants
 Description
of Principal AgreementsThe Fiscal Agency AgreementCovenants
    63




---



##### Table of Contents



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;
 (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.
 Description of Principal AgreementsThe Fiscal Agency AgreementFunding and Administration of
the Retention Account 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 66 2/3% 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.
  64




---



##### Table of Contents



Description of Principal AgreementsThe Fiscal Agency
AgreementPayment of Accelerated Debt Service
 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.
  65




---



##### Table of Contents



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,
 
    
    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
   66




---



##### Table of Contents



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.
  
    
    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
    67




---



##### Table of Contents



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
 (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
 Description of Principal Agreements 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
  68




---



##### Table of Contents



Equity
 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
  69




---



##### Table of Contents



(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 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 Description of Principal AgreementsThe Fiscal
Agency AgreementEvents of Default
  70




---



##### Table of Contents



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.
  71




---



##### Table of Contents



Item 5. Operating and Financial Review and Prospects.
 MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  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.
 Item 4. Information on the CompanyDescription of BusinessPEMEXs Customers and
Receivables
     72




---



##### Table of Contents




    
    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.
   Taxation of Pemex Finance
  Basis of Presentation
    73




---



##### Table of Contents



Principal Payments Due by PeriodLess than 1Total due
    
    
    year
    
    
    1-3 years
    
    
    4-5 years
    
    
    After 5 years(in millions of U.S. dollars)Long-term Debt1998 notes
9.15% notes due 2018
    
    $
    250
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    250February 1999 notes
8.875% notes due 2010
    
    
    160
    
    
    
    53
    
    
    
    107
    
    
    
    0
    
    
    
    0February 1999 floating rate notes
Series A floating rate notes
    
    
    100
    
    
    
    0
    
    
    
    25
    
    
    
    67
    
    
    
    8July 1999 notes
9.69% notes due 2009
    
    
    210
    
    
    
    120
    
    
    
    90
    
    
    
    0
    
    
    
    010.61% notes due 2017
    
    
    200
    
    
    
    0
    
    
    
    0
    
    
    
    13
    
    
    
    188July 1999 additional issuances
Series B floating rate notes
    
    
    90
    
    
    
    0
    
    
    
    0
    
    
    
    45
    
    
    
    45February 2000 notes
9.03% notes due 2011
    
    
    520
    
    
    
    160
    
    
    
    360
    
    
    
    0
    
    
    
    0Subordinated Debt ObligationsTotal
    
    
    715
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    715Total
    
    $
    2,245
    
    
    $
    333
    
    
    $
    582
    
    
    $
    124
    
    
    $
    1,206
  Maturity inSource of Fair
    
    Maturity less
    
    
    Maturity
    
    
    Maturity
    
    
    excess of
    
    
    Total fairValue
    
    than 1 year
    
    
    1-3 years
    
    
    4-5 years
    
    
    5 years
    
    
    valuePrices actively quoted
    
    $
    363
    
    
    $
    615
    
    
    $
    83
    
    
    $
    488
    
    
    $
    1,549Prices based on
models and other
valuation methods
    
    
    0
    
    
    
    26
    
    
    
    117
    
    
    
    56
    
    
    
    199
   74




---



##### 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 31,2005
    
    
    2006
    
    
    2007(in thousands of U.S. dollars)Interest income from discount on purchased accounts receivable
    
    $
    304,226
    
    
    $
    218,278
    
    
    $
    175,296Interest income from highly liquid temporary investments
    
    
    12,412
    
    
    
    14,330
    
    
    
    16,625Total revenues
    
    $
    316,638
    
    
    $
    232,608
    
    
    $
    191,921
    
    
    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.
    75




---



##### Table of Contents



Interest Expenses and Make-whole Premium
    76




---



##### Table of Contents



Interest expense during2005
    
    
    2006
    
    
    2007(in thousands of U.S. dollars)1998 notes
    
    $
    53,978
    
    
    $
    32,232
    
    
    $
    24,045February 1999 notes
    
    
    29,508
    
    
    
    19,863
    
    
    
    16,507February 1999 floating rate notes
    
    
    6,646
    
    
    
    8,410
    
    
    
    8,720July 1999 notes
    
    
    79,649
    
    
    
    59,011
    
    
    
    47,383July 1999 additional issuances
    
    
    6,193
    
    
    
    7,832
    
    
    
    8,007February 2000 notes
    
    
    77,993
    
    
    
    68,177
    
    
    
    54,180Subordinated debt
    
    
    56,852
    
    
    
    29,778
    
    
    
    29,990Insurance premium and
amortization of debt issuance
costs
    
    
    7,087
    
    
    
    43
    
    
    
    21Redeemed notes make-whole premium
    
    
    96,377
    
    
    
    
    
    
    
    Total
    
    $
    414,283
    
    
    $
    225,346
    
    
    $
    188,853
 General and Administrative Expenses
    Taxes
  Net Income
   77




---



##### Table of Contents



Liquidity and Capital Resources
    
    
    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.
 Item 11. Quantitative and Qualitative Disclosures About
Market Risk
 2008 Financing Activities
 Principal Payments dueTotal due
    
    
    Feb 15th. 2008
    
    
    May 15th. 2008(in millions of dollars)Long-term DebtFebruary 1999 notes8.875% notes due 2010
    
    
    27
    
    
    
    13.3
    
    
    
    13.3July 1999 notes9.69% notes due 2009
    
    
    60
    
    
    
    30
    
    
    
    30February 2000 notes9.03% notes due 2011
    
    
    80
    
    
    
    40
    
    
    
    40Total
    
    $
    167
    
    
    $
    83.3
    
    
    $
    83.3
 2007 Financing Activities
 2006 Financing Activities.
   78




---



##### Table of Contents



2005
    
    
    2006
    
    
    2007(in millions of U.S. dollars)Collections on current purchased receivables
    
    $
    19,104.9
    
    
    $
    24,202.2
    
    
    $
    27,173.2Receivables that were generated and became current eligible receivables
    
    
    1,570.5
    
    
    
    1,557.4
    
    
    
    1,499.2Receivables to be generated in the future*
    
    
    821.6
    
    
    
    541.1
    
    
    
    0
 
 *
    
    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
  Critical Accounting Policies
   79




---



##### Table of Contents



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.
    80




---



##### Table of Contents



Position withName
    
    Pemex Finance
    
    AppointmentEduardo R. Calvo Barbeau
    
    Director and President
    
    2007Darren Riley
    
    Director and Vice President
    
    1998Candace Ebanks
    
    Director
    
    2003Michael Austin
    
    Independent Director
    
    1998Piccadilly Directors Limited
    
    Director
    
    1998
  Eduardo R. Calvo Barbeau
 Darren Riley
 Candace Ebanks
 Michael Austin
 Piccadilly Directors Limited
 Compensation of Directors and Officers
  Employees
   81




---



##### Table of Contents



Share Ownership
  
 Item 7. Major Shareholders and Related Party Transactions.
     
 Item 8. Financial Information.
 Item 18Financial Statements
  Item 10. Additional InformationMemorandum and Articles of
AssociationRights and Obligations of ShareholdersDividends
 
 Item 9. The Offer and Listing.
   82




---



##### 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
    83




---



##### 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.
   84




---



##### 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, 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
   85




---



##### Table of Contents



U.S. Holders
 Interest and Additional Amounts
  Disposition of the Notes.
   Premium
  Market Discount
   86




---



##### Table of Contents



Non-U.S. Holders
   (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
  DOCUMENTS ON DISPLAY
 http://www.sec.gov th
 
  87




---



##### 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, 2007TotalOutstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Carrying
    
    FairDebt
    
    2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    Thereafter
    
    Value
    
    ValueFixed rate debt
    
    $
    333,333
    
    
    $
    303,333
    
    
    $
    213,333
    
    
    $
    65,000
    
    
    $
    33,333
    
    
    $
    491,667
    
    
    $
    1,439,999
    
    
    $
    1,548,980Average interest rate
    
    
    9.34
    %
    
    
    9.22
    %
    
    
    9.09
    %
    
    
    9.02
    %
    
    
    9.19
    %
    
    
    9.87
    %
    
    
    
    
    
    
    Variable rate debt floating rate
notes
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    25,000
    
    
    
    33,333
    
    
    
    131,667
    
    
    
    190,000
    
    
    
    198,975Subordinated debt to
PEMEX
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    234,750
    
    
    
    234,750
    
    
    
    317,338
 
 Note:
    
    Numbers may not total due to rounding. 
 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 15T. Controls and Procedures
 (a) Disclosure controls and procedures.
    88




---



##### Table of Contents



(b) Managements annual report on internal controls over financial reporting.
  (1)
    
    pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of Pemex Finance;(2)
    
    provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with IFRS as issued by IASB
and that receipts and expenditures of Pemex Finance are being made only in accordance
with authorizations of management and directors of the company; and(3)
    
    provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of Pemex Finances assets that could have
a material effect on our financial statements.
      (c) Changes in internal control over financial reporting
  
 Item 16. [Reserved]
 
 Item 16A. Audit Committee Financial Expert.
    89




---



##### Table of Contents



Item 16B. Code of Ethics
  
 Item 16C. Principal Accountant Fees and Services
 Audit and Non-Audit Fees
  Year ended December 31,2006
    
    
    2007Audit fees
    
    $
    78,000
    
    
    $
    69,600Audit-related fees
    
    
    
    
    
    
    Tax fees
    
    
    
    
    
    
    Other fees
    
    
    
    
    
    
    Total fees
    
    $
    78,000
    
    
    $
    69,600
   
 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.
  
 Item 18. Financial Statements.
   90




---



##### Table of Contents



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 independent registered public accounting firm
    
    
    F-3Balance sheets
    
    
    F-4Statements of income
    
    
    F-5Statements of changes in shareholders equity
    
    
    F-6Statements of cash flows
    
    
    F-7Notes to the financial statements December 31, 2007 and 2006
    
    
    F-8
 (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))
  91




---



##### Table of Contents



(b) Exhibit No:
    
    DescriptionExhibit 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))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))
  92




---



##### Table of Contents



(b) Exhibit No:
    
    DescriptionExhibit 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, 2006, as filed with the SEC
(Commission file No. 0-99) on July 2, 2007 (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))
  93




---



##### Table of Contents



SIGNATURE
  PEMEX FINANCE LTD./s/ Eduardo R. Calvo BarbeauEduardo R. Calvo BarbeauDirector and President




---



##### Table of Contents



PEMEX FINANCE LIMITED
 AUDITED FINANCIAL STATEMENTS
 DECEMBER 31, 2007 AND 2006
  F-1




---



##### Table of Contents



PEMEX FINANCE LIMITED
 AUDITED FINANCIAL STATEMENTS
 DECEMBER 31, 2007 AND 2006
 INDEX
 Contents
    
    PageReport of independent registered public accounting firm
    
    F-3Financial statements:Balance sheets
    
    F-4Statements of income
    
    F-5Statements of changes in shareholders equity
    
    F-6Statements of cash flows
    
    F-7Notes to the financial statements
    
    F-8
  F-2




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
   F-3




---



##### Table of Contents



PEMEX FINANCE LIMITED
 
 BALANCE SHEETS
  Thousands of U.S. dollars
 December 31,2007
    
    
    2006AssetsCURRENT ASSETS:Cash and cash equivalents
    
    $
    237,411
    
    
    $
    37,610Liquidity account (Note 4)
    
    
    180,251
    
    
    
    171,606Current purchased accounts receivable (Notes 2c. and 5)
    
    
    1,499,225
    
    
    
    1,557,388Other accounts receivable
    
    
    
    
    
    
    8Rights to future (ungenerated) purchased accounts
receivable (Notes 2c. and 5)
    
    
    
    
    
    
    541,075Total current assets
    
    
    1,916,887
    
    
    
    2,307,687Total assets
    
    $
    1,916,887
    
    
    $
    2,307,687Liabilities and Shareholders EquityCURRENT LIABILITIES:Current portion of long-term debt (Note 6)
    
    $
    351,129
    
    
    $
    408,982Accounts payable and accrued expenses
    
    
    302
    
    
    
    482Total current liabilities
    
    
    351,431
    
    
    
    409,464LONG-TERM LIABILITIES:Long-term debt (Note 6)
    
    
    1,196,669
    
    
    
    1,530,001Subordinated debt to Petróleos Mexicanos (Notes 6 and 7)
    
    
    238,486
    
    
    
    238,490Total long-term liabilities
    
    
    1,435,155
    
    
    
    1,768,491Total liabilities
    
    
    1,786,586
    
    
    
    2,177,955SHAREHOLDERS EQUITY (Note 10):Capital stock
    
    
    1
    
    
    
    1Retained earnings
    
    
    130,300
    
    
    
    129,731Total shareholders equity
    
    
    130,301
    
    
    
    129,732Total liabilities and shareholders equity
    
    $
    1,916,887
    
    
    $
    2,307,687
   F-4




---



##### Table of Contents



PEMEX FINANCE LIMITED
 
 STATEMENTS OF INCOME
  Thousands of U.S. dollars
 Year ended December 31,2007
    
    
    2006
    
    
    2005Revenues:Interest income from discount on purchased accounts
Receivable (Note 2d.)
    
    $
    175,296
    
    
    $
    218,278
    
    
    $
    304,226Interest income from highly liquid temporary
investments
    
    
    16,625
    
    
    
    14,330
    
    
    
    12,412Total revenues
    
    
    191,921
    
    
    
    232,608
    
    
    
    316,638Interest expense (Notes 6 and 7)
    
    
    (188,853
    )
    
    
    (225,344
    )
    
    
    (317,906
    )Make-whole premium (Note 6)
    
    
    
    
    
    
    
    
    
    
    (96,377
    )General and administrative expenses (Note 8)
    
    
    (2,499
    )
    
    
    (2,446
    )
    
    
    (2,781
    )Net income (loss)
    
    $
    569
    
    
    $
    4,818
    
    
    $
    (100,426
    )
   F-5




---



##### Table of Contents



PEMEX FINANCE LIMITED
 
 STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY  FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
  Thousands of U.S. dollars
 TotalCapital
    
    
    Retained
    
    
    shareholdersstock
    
    
    earnings
    
    
    equityBalances as of January 1, 2005
    
    $
    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
    
    
    
    129,732Net income
    
    
    
    
    
    
    569
    
    
    
    569Balances as of December 31, 2007
    
    $
    1
    
    
    $
    130,300
    
    
    $
    130,301
   F-6




---



##### Table of Contents



PEMEX FINANCE LIMITED
 
 STATEMENTS OF CASH FLOWS
  Thousands of U.S. dollars
 Year ended December 31,2007
    
    
    2006
    
    
    2005Operating activities:Net income (loss)
    
    $
    569
    
    
    $
    4,818
    
    
    $
    (100,426
    )Adjustments to reconcile net income (loss) to net
cash provided by operating activities:Amortization of debt issuance costs
    
    
    21
    
    
    
    44
    
    
    
    191Change in assets and liabilities:Current purchased accounts receivable
    
    
    7,201
    
    
    
    1,843
    
    
    
    9,682Other
    
    
    8
    
    
    
    18
    
    
    
    (23
    )Accounts payable and accrued expenses
    
    
    (180
    )
    
    
    335
    
    
    
    (1,850
    )Accrued interest payable
    
    
    (4,543
    )
    
    
    (3,979
    )
    
    
    (18,422
    )Liquidity account
    
    
    (8,645
    )
    
    
    (45,644
    )
    
    
    54,883Collections of accounts receivable, net of discounts
collected
    
    
    26,964,031
    
    
    
    23,951,434
    
    
    
    18,767,169Purchases of accounts receivable and rights to future
(ungenerated) accounts receivable
    
    
    (26,371,994
    )
    
    
    (23,659,546
    )
    
    
    (16,807,310
    )Net cash provided by operating activities
    
    
    586,468
    
    
    
    249,323
    
    
    
    1,903,894Financing activities:Subordinated debt reborrow
    
    
    
    
    
    
    
    
    
    
    70,000Payments of long-term debt
    
    
    (386,667
    )
    
    
    (390,001
    )
    
    
    (1,849,412
    )Net cash used in financing activities
    
    
    (386,667
    )
    
    
    (390,001
    )
    
    
    (1,779,412
    )Cash and cash equivalents:Net change of the year
    
    
    199,801
    
    
    
    (140,678
    )
    
    
    124,482At the beginning of the year
    
    
    37,610
    
    
    
    178,288
    
    
    
    53,806At the end of the year
    
    $
    237,411
    
    
    $
    37,610
    
    
    $
    178,288Supplemental cash flow information:Interest and make-whole premium paid
    
    $
    193,375
    
    
    $
    229,280
    
    
    $
    425,617
   F-7




---



##### Table of Contents



PEMEX FINANCE LIMITED
 
 NOTES TO THE FINANCIAL STATEMENTS
 DECEMBER 31, 2007 AND 2006
 Amounts in thousands of U.S. dollars
 NOTE 1  THE COMPANY
      F-8




---



##### Table of Contents



NOTE 2  SIGNIFICANT ACCOUNTING POLICIES
  a.
    
    Basis of presentation -The financial statements have been prepared in accordance and comply with International Financial
Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).
The measurement basis used in preparing these financial statements is historical basis. The
Companys functional and reporting currency is the U.S. dollar.b.
    
    Financial assets -The Companys financial assets are cash and cash equivalents and receivables. The receivables
are classified in current purchased accounts receivable and rights to future (ungenerated)
purchased accounts receivable.The Companys current purchased accounts receivable are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active market.c.
    
    Accounts receivable -The rights to future (ungenerated) purchased accounts receivable, is equal to the amount paid to
Services to purchase Eligible Receivables to be generated by Comercio, approximately within the
following 15 days. As Comercio exports crude oil to the Designated Customers, evidenced by a
bill of lading, such amount becomes current purchased accounts receivables.Current purchased accounts receivable are originally recorded at fair value to be received from
the Designated Customers, pursuant to the terms and conditions agreed with Comercio. The
originally recorded amount may be adjusted pursuant to such terms and market conditions and, in
such case, the adjusted amount would be the actual amount payable by Designated
Customers. All proceeds received from the Designated Customers are applied to reduce the current
purchased accounts receivable. These proceeds are used to purchase from Services new future
Eligible Receivables.
  F-9




---



##### Table of Contents



The Designated Customers are normally major oil companies, highly rated by recognized rating
agencies and strictly monitored by Comercio with respect to their financial position and results
of operation. The Designated Customers ability to comply with their financial commitments has
not historically resulted in delinquencies. However, in the event the Company had objective
evidence that it will not be able to collect all amounts due according to the original terms of
receivables, a provision for impairment of accounts receivable would be established. Significant
financial difficulties of the Designated Customers, probability that the Designated Customers
will enter bankruptcy or financial reorganization, and default or delinquency in payments are
considered indicators that the receivable is impaired. During the years ended December 31, 2007,
2006 and 2005, there were not delinquencies or other evidence of any receivable was impaired.
The amount of the provision for impairment of accounts receivable, if any, would be the
difference between the receivables carrying amount and the present value of estimated future
cash flows, discounted at the original effective interest rate. The amount of the loss is
recognized in the income statement. When an account receivable is uncollectible, it is written
off against the provision for impairment of accounts receivable. Subsequent recoveries of
amounts previously written off are credited in the income statement.As of December 31, 2007 and 2006, accounts receivable turnover is an average of 30 days.d.
    
    Revenue recognition -Revenue from the discount on purchased accounts receivable is recorded as income when interests
are generated as described below:
 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.The effective interest method is a method of calculating the amortized cost of a financial
asset and allocating the interest income over the relevant period. The effective interest
rate is the rate that discounts estimated future cash receipts through the expected life of
the financial assets or, when appropriate, a shorter period to the net carrying amount of the
financial assets.
  F-10




---



##### Table of Contents



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 Receivable is due from the Designated Customer to the date on which the purchase
price for such Eligible Receivable was paid to Services. As of December 31, 2007 the
discount rate for Eligible Receivables purchased was 9.73284% (9.74631% as of December 31,
2006). During 2007 the discount rate applied to purchase Eligible Receivables fluctuated
between a range of 9.73284% and 9.80386% (between 9.59709% and 9.74631% during 2006 and
between 9.21259% and 9.59709% during 2005).
 e.
    
    Accounting estimates -Preparation of financial statements in conformity with IFRS requires that management makes
estimates and assumptions that affect the amounts reported of assets and liabilities at the date
of the financial statements and the amounts reported of revenues and expenses during the reported
period. Actual results could differ from those estimates.f.
    
    Cash and cash equivalents -The Company considers as cash equivalents all deposits with original maturities of less than
three months.g.
    
    Borrowings -Borrowings are recognized at fair value, net of transactions costs incurred. Borrowings are
subsequently stated at amortized cost. Borrowings are classified as current liabilities unless
the Company has an unconditional right to defer settlement of the liability for at least 12
months after the balance sheet date.h.
    
    Provisions -Provisions on the balance sheet are recognized when the Company has a present legal or
constructive obligation as a result of past events; it is more likely than not that an
outflow of resources will be required to settle the obligation; and the amount has been
reliably estimated. Provisions are not recognized for future operating losses.
  F-11




---



##### Table of Contents



i.
    
    New accounting pronouncements under IFRS -In August 2005, the IASB issued an amendment to IAS 1, Presentation of Financial Statements.
In August 2005, the IASB issued IFRS 7, Financial Instruments: Disclosures, relating to
disclosure requirements for financial instruments. The Company adopted the amendments to IAS 1
and IFRS 7 as of January 1, 2007.
 
    
    IFRS 7 Financial Instruments: Disclosures. The impact of the new standard has been to
expand the disclosures provided in the financial statements regarding the Companys
financial instruments. The Companys financial instruments include cash equivalents,
accounts receivable and borrowings (see Note 3).
    
    IAS 1 (Amendment), Presentation of Financial Statements: Capital Disclosures requires
qualitative and quantitative disclosures to enable users to evaluate an entitys
objectives, policies and processes for managing capital.
   
    
    IFRS 4 Insurance contracts.
    
    IFRIC 7 Applying the restatement approach under IAS 29, Financial reporting in
hyperinflationary economies.
    
    IFRIC 8 Scope of IFRS 2.
    
    IFRIC 9 Re-assessment of embedded derivatives.
    
    IFRIC 10 Interim financial reporting and impairment.
    
    IFRIC 11 IFRS2  Group and Treasury Share Transactions.
  
    
    IAS 23 (Amendment) Borrowing costs.
    
    IFRS 8 Operating segments.
    
    IFRIC 14 IAS 19  The limit on a defined benefit asset, minimum funding requirements
and their interaction.
    
    IFRIC 12 Service concession arrangements.
    
    IFRIC 13 Customer loyalty programs.
 j.
    
    Segment reporting -Most of the Companys accounts receivable are related to companies based in the United States.
Accordingly the Companys one reportable segment is of acquired accounts receivable in the United
States.
  F-12




---



##### Table of Contents



NOTE 3  SIGNIFICANT RISKS
 Credit risk
      F-13




---



##### Table of Contents



Market risk
   F-14




---



##### Table of Contents



Liquidity risk
      F-15




---



##### Table of Contents



NOTE 4  LIQUIDITY ACCOUNT
  NOTE 5  CURRENT AND FUTURE PURCHASED ACCOUNTS RECEIVABLE
    F-16




---



##### Table of Contents



NOTE 6  LONG-TERM DEBT
  December 31,2007 *
    
    

2006 *December 14, 1998 issuances:8.02% Notes due 2007
    
    
    
    
    
    $
    58,9079.15% Notes due 2018
    
    $
    252,752
    
    
    
    252,742Subtotal
    
    
    252,752
    
    
    
    311,649February 25, 1999 issuances:8.450% Notes due 2007
    
    
    
    
    
    
    8,4218.875% Notes due 2010
    
    
    161,775
    
    
    
    202,219Floating Rate Notes due 2014
    
    
    101,053
    
    
    
    101,126Subtotal
    
    
    262,828
    
    
    
    311,766July 27, 1999 issuances:9.69% Notes due 2009
    
    
    212,544
    
    
    
    333,99710.61% Notes due 2017
    
    
    202,652
    
    
    
    202,652Subtotal
    
    
    415,196
    
    
    
    536,649July 27, 1999 additional issuances:Floating Rate Notes due 2014
    
    
    91,152
    
    
    
    91,243Subtotal
    
    
    91,152
    
    
    
    91,243February 10, 2000 issuances:9.03% Notes due 2011
    
    
    525,870
    
    
    
    687,676Subtotal
    
    
    525,870
    
    
    
    687,676Total debt
    
    
    1,547,798
    
    
    
    1,938,983Less: Current portion
    
    
    351,129
    
    
    
    408,982Total long-term debt
    
    $
    1,196,669
    
    
    $
    1,530,001
 *
    
    Includes accrued interest and, if applicable, unamortized debt issuance cost.   F-17




---



##### Table of Contents



Year ending2008
    
    $
    351,129Long-term debt:2009
    
    
    303,3332010
    
    
    213,3342011
    
    
    65,0002012
    
    
    33,3332013 and thereafter
    
    
    581,6691,196,669Total debt
    
    $
    1,547,798
  F-18




---



##### Table of Contents



December 31, 2007
    
    
    December 31, 2006Carrying value
    
    
    Fair value
    
    
    Carrying value
    
    
    Fair valueTotal debt
    
    $
    1,547,796
    
    
    $
    1,747,955
    
    
    $
    1,938,983
    
    
    $
    2,166,466Subordinated debt to PEMEX
(See Note 7)
    
    $
    238,487
    
    
    $
    332,014
    
    
    $
    238,490
    
    
    $
    322,222
 NOTE 7  SUBORDINATED DEBT TO PEMEX
   .
 NOTE 8  TRANSACTIONS WITH THE PEMEX GROUP
    F-19




---



##### Table of Contents



)
   NOTE 9  INCOME TAXES
  NOTE 10  SHAREHOLDERS EQUITY
    F-20




---



##### Table of Contents



EXHIBIT INDEX
 Exhibit No:
    
    DescriptionExhibit 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.Exhibit 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 2002.