Panel 3 "Despolome of the prices of oil. Crisis in the mexican oil instrument".

APRIL 1 TO MAY 19, 2020

STRATEGY + INNOVATION IS WHAT WILL ALWAYS TRANSFORM THE ENERGY INDUSTRY

PRESENTED BY

OFFICIAL MEDIA

MEDIA PARTNERS

OPENING MESSAGE

PAGE 02

OIL AND GAS ALLIANCE MEMBERS

PARTICIPANTS Engineer Jeimy Mathison - General Manager - Kas Oil Integrated Services Lic. Sergio Sentíes - General Director - CMX 360 Lic. Ricardo Zúñiga - Executive Director - Financial Collective At this moment, the most important thing is to be responsible for each of the actions we take in each niche where it is our responsibility to play and to have the capacity to face adversity.

Throughout the history of the oil market in oil prices we always have highs and lows, we have experienced many crises and each one of these has helped us transform and strengthen ourselves.

On the subject of the COVID-19 pandemic, it has led companies to take actions that help safeguard the integrity of human resources where health is the priority, which is what will generate value for each of the companies.

The oil sector is classified as one of the essential activities of the country and the economy, for this reason all those invoked must continue walking with the same force, transforming the way of operating, continuing to operate and generating value.

OPENING MESSAGE

PAGE 03

It has to continue operating, the energy

These are difficult times, but it can be

industry is what moves the country, this is

taken as a window of opportunity to

the right time to help the industry and

reflect and rethink strategies to succeed,

society by putting a grain of sand in what

life is full of challenges and this is one of

touches everyone from their trenches.

them that must be overcome.

It is time to put the best skills at stake, be

The

creative and use digital platforms, they

synergies, this will be what strengthens

are

and

undoubtedly

tools

that

already

existed, however they were not used and now is the opportunity to start using them to be able to connect with our clients and colleagues most of the time.

sum is

the

of

wills

generates

guideline

to

positive

keep

forward and keep walking the path.

moving

PANEL 3 - WEDNESDAY APRIL 15, 2020

PAGE 04

"DESPOLOME OF THE PRICES OF OIL. CRISIS IN THE MEXICAN OIL INSTRUMENT. HOW TO FACE THIS CRISIS IN MEXICO?"

PARTICIPANTS Moderator:

TOPICS

Engineer.

Alfredo

García

Mondragón - CEO - Siete Energy

1. What should Mexico do in light of the situation in which it finds itself?

2. Is it time to extract to refine or to

Engineer. José Friedrich García Mallitz Undersecretary Promotion

and

for Attraction

Investment -

SEDEC

Tabasco

store?

3. How to operate within a pandemic scenario?

4. How can the cost of operating Pemex be

Engineer. Merlín Cochran - General Director - AMEXHI

lowered to reasonable levels?

5. In the face of the health crisis and the

Lic. Larry Rubin - President - American

lack of resources of Pemex, how do you

Society

see it affecting production in Mexico in

Lic.

Diana

María

Pineda

Esteban

Partner - González Calvillo S.C.

-

the short term?

PANEL 3

PAGE 05

The COVID-19 pandemic and oil prices put

This global scenario landed in Mexico

the Mexican oil industry in one of the

invites companies to be very cautious

most complicated scenarios to reestablish

regarding the risk scenario and to assess

investments and operations as planned.

where

they

are

going

to

focus

investments.

Although the main focus is Mexico, the global

panorama

that

influences

the

The impact of COVID-19 has impacts on

current circumstances of the oil industry

the

in Mexico has to be analyzed a bit, there is

bottlenecks, so it is necessary to continue

a process of over-supply of hydrocarbons,

looking for how to navigate, operate,

specifically motivated by the pandemic,

maintain suppliers, among others, so that

China was the main country affected, it is

the

the main consumer of oil, having outside

commitments .

this

main

consumer

seriously

supply

industry

chain,

can

there

carry

are

out

many

all

its

affects

prices.

The best strategy for Mexico would be to store all the oil the country produces and

"Mexico as a country has to become more

sell it more expensive, a strategy they

selective in terms of the resources it will

have used in other countries.

want to exploit in the short and medium term, to make the investments it will make more efficient, to look at what type of crude oil, quality, costs, and how It intends to carry out, whether it will only be an investment by Pemex as the main banner in oil production in Mexico or if it will share the financial costs with the private sector and the opportunities that it will present to them”, said Lic. Diana María Pineda.

"Mexico as a country has to become more selective in terms of the resources it will want to exploit in the short and medium term, to make the investments it will make more efficient, to look at what type of crude oil, quality, costs, and how It intends to carry out, whether it will only be an investment by Pemex as the main banner in oil production in Mexico or if it will share the financial costs with the private sector and the opportunities that it will present to them” - Lic. Diana María Pineda.

PANEL 3

PAGE 06

"You have to find a different Energy Policy,

One of the challenges will be to continue

you have to continue attracting investment,

exploring

although right now is not the time to sell, if

demand while still being the engine that is

it is time to continue long-term extraction

today the oil sector in Mexico for the

projects”, said Lic. Larry Rubin.

creation of companies and the generation

and

producing,

anticipating

and recovery of jobs.

The economy will rejoin soon, however the decline will continue and Mexico must be

When the subject of the pandemic ends,

in a different environment.

the economy must be relaunched and if demand increases, it is necessary to have

If we look at history we can see that these

the infrastructure that was planned, this is

situations are cyclical and the industry is

also a capital decision, if Mexico will have

used to it and has known how to handle it

the available capital to continue investing

in the past, the additional issue that we

or falling to the private ones, in addition,

have is the part of uncertainty on the part

to analyze the speed at which association

of demand, we are facing a situation that

contracts

will depend a lot on how each country

investment, so that when the commercial

handles its epidemiological control.

part is opened in Mexico, you have the

can

be

made

to

ensure

legal instruments with those investment "It

is

a

critical

moment

for

all

oil

companies and for countries like Mexico

engines

to

get

out

of

this

economic

situation in which Mexico will fall.

that we have one of the strong revenues and one of the most important development

Mexico has a great opportunity, it is still

engines, which is the hydrocarbon sector,

attractive, the Gulf of Mexico is very

which is why they have to consider short

relevant,

and long-term strategies term”, mentioned

country to take advantage of this and

the Engineer José Friedrich García.

make it more productive and efficient.

however

it

is

time

for

this

"It is a critical moment for all oil companies and for countries like Mexico that we have one of the strong revenues and one of the most important development engines, which is the hydrocarbon sector, which is why they have to consider short and long-term strategies term” - Engineer José Friedrich García.

PANEL 3 The

PAGE 07 retaining

We have to work together to guarantee

investments is very important, and it has a

issue

of

this investment security, retain that which

lot to do with legal security, the security

is

that can be given to the investor in the

compete with those future investments.

matter

Mexico

that

attracting

their

and

investment

will

be

already

in

will

protected in the parameters in which it

competitive

was offered. In addition, they must be

investments.

Mexico have

side

and

to to

be

show fight

able its

for

to

most those

provided with legal security through the implementation of the mechanisms that

"It

the

impacts are not immediate, when you stop

federal

designed

government

through

the

has

recently

agreements

for

is

important

investing

you

to

have

highlight an

that

impact

in

the the

suspensions of non-essential activities,

medium and long term, it is true that the

this must be throughout the entire public

rounds are not a priority, however it is not

administration

understands

production

hydrocarbons

supply

of

considered

of

petroleum an

essential

the

an issue that you want to remove from the

and

the

table�, commented the Engineer Merlin

products

is

activity,

as

that

determined by the Health Council.

Cochran.

It is a complicated situation for Mexico, especially

since

Pemex

is

the

most

all

of

Latin

"We have to see regulators such as CRE,

vulnerable

ASEA, CNH, SCT, among others, acting

America, since it has the most difficult and

accordingly,

weak capital and liquidity structures in

that

they

are

pending

production not to be slowed down, grant

company

in

the entire region.

permits, authorize insurance records and allow those activities to continue", Lic. Diana MarĂ­a Pineda commented.

"It is important to highlight that the impacts are not immediate, when you stop investing you have an impact in the medium and long term, it is true that the rounds are not a priority, however it is not an issue that you want to remove from the table� - Engineer Merlin Cochran.

PANEL 3

PAGE 08

Today we are seeing a 30% drop in

We have to be prepared for a totally

consumption and although the economy is

uncertain future. Decision making will

reactivated in the short term, there is an

play a very fundamental role, today more

over-inventory of hydrocarbons in the

than ever the federal government needs

market. With this conjuncture the issue of

investment.

oil will not be fixed once the economy starts to move globally, the oversupply will be there, for this reason Mexico will have to see what it will do in the coming months, particularly with this oversupply

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that exists and how it will be managed to make it attractive for investment, since

*Replays of the panels are available on

the oil companies are with less flow and

our

less capacity to invest, for this reason

Alliance.

Mexico is facing a rather complicated situation.

In conclusion, it must be understood that today the oil companies that want to invest in Mexico have less capacity to do so, which is why Mexico has to be more attractive.

YouTube

channel

Oil

and

Gas

PANEL STATISTICS

PAGE 09

4,370 IMPACTS 4,370Â impacts that entered through different channels, which entered an average of 1.893 times with a duration of 00:40:59 per user.

BUSINESS TABLE DIARQCO GROUP

PAGE 10

BUSINESS TABLE DIARQCO GROUP

Engineer

Ricardo

de

Jesús

García

Guerrero - Director of Field Development Mayacaste Oil & Gas S.A.P.I. de C.V. Diarqco Group Mexican and foreign operators have to adapt

to

market,

participate working

in based

the

national on

the

corresponding objectives. In the part of the oil industry in Mexico, it is known that according to the Energy Reform there are at least 17 countries that through their different

operators

different projects.

are

working

on

BUSINESS TABLE DIARQCO GROUP

PAGE 11

In a state scenario in which Mayacaste Oil

Diarqco Group business opportunities

& Gas is located, the winning operating company of contractual area number 13

They are focused on the production of the

Mayacaste, it is known that the state of

contractual area, finally they are in a

Tabasco is an oil and gas producing state

round

par excellence.

guidelines

in

which and

they

have

compliance

certain

with

the

authorities, in this case with the National Facing the situation we are going through,

Hydrocarbons

Diarqco Group shares the actions it is

they have committed certain activities

developing.

such

as

Commission,

scheduled

major

with and

whom minor

repairs. for the second semester of this Shares being generated by Diarqco Group 1. Understand that successful companies

year.

"We have the resources to detonate these activities, this is with money that we had

have to make long-term plans.

2. Efficiency in the way of producing and

budgeted

in

order

that

the

production

producing in a rationalized way, not

scenarios will meet in the next few months

stopping production but producing in a

with a slightly negative price that we had

moderate

already planned”, said Engineer Ricardo

way

to

continue

counting

with cash flow, hoping that in the coming months the price will stabilize according to the needs of investors and seeking

financial

and

economic

stability, that is, preserving liquidity and knowing how to deal with debt.

3. Focusing

on

working

hand

alliances,

especially

in

with

hand

the

government and private companies, the only way to get out of this crisis is to work together and try to spread the risk, in order to increase productivity.

de Jesús García .

BUSINESS TABLE DIARQCO GROUP Diarqco

PAGE 12

Group

synergies

with

is

open

other

to

generate

"These are moments that as a company we

that

need to have the highest efficiency, it is

require to detonate projects either as

important to share with you that it is a

suppliers or jointly in activities related to

time to cheer ourselves up, the market has

the

always

exploration,

companies

extraction

and

commercialization of hydrocarbons.

been

variable,

it

has

been

complicated lately, however the situation at this time of the pandemic and the war

To

have

contact

through

with its

Diarqco

Group

of the prices has given us to attend to that

website

we must foresee, organize and readjust

www.grupodiarqco.com

our plans, we have to be present in the market

supporting

our

country

to

As for the parameters to be a reliable

continue in force in the market ”, pointed

supplier of this company, for Diarqco

out Engineer Ricardo de Jesús García, thus

Group it is of utmost importance that even

closing the talk.

in these situations there are no excuses to provide quality services, both machinery and personnel.

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STATISTICS

PAGE 13

5,431 IMPACTS 5,431 impacts that entered through differente channels, which entered an average of 1.987 times with a duration of 00:15:52 per user.

OUR SPONSORS

PAGE 14

SPONSORS We extend a heartfelt thanks to those who make the first Virtual Oil Expo in Mexico possible, who also join our #VaPorMéxico campaign to move the Mexican oil industry forward.

QUESTIONS AND COMMENTS If you have any questions through our Twitter account @oilgasalliance, you can ask the panelists questions. Whenever possible, they will respond within 12 hours of the panel.