RESPONSIBI SOCIAL - Pemex

e c o n o m y + e n v i r o n m e n t + s o c i a l r e s p o n s i b i l i t y

P E T R Ó L E O S M E X I C A N O S

SUSTAINABLE DEVELOPMENT

S a f e t y ,H e a l t h a n dE n v i r o n m e n t

R e p o r t 2001

Re

po

rt

20

01

Infrastructure

Producing fields 303•Producing wells 4,185•Offshore platforms 185

Gas processing centers 10•Gas sweetening plants 19•Cryogenic plants 14•Absorption plants 2•Fractionating plants 7•Condensate sweetening plants 6•Sulfur recovery plants 12

Refineries 6

Petrochemical centers 8•Petrochemical plants 50

Liquid gas storage anddistribution terminals 16

Refined products storage anddistribution terminals 77

CONTENTSWho we are, what we do, where we do it ii

Message from the Director General 2

Sustainable development in Petróleos Mexicanos 4

We are working 5

Strategy: safety, health and environment 6

Occupational health 8

Safety 9

Total emissions and discharges 12

Emissions per unit of throughput 13

Emissions to air 14

Discharges to water 16

Hydrocarbon spills and leaks 18

Hazardous wastes 20

Greenhouse gases 22

Energy consumption 24

Environmental auditsand clean industry certificates 26

Research and development 28

Social responsibility 30

Sensitive areas 34

Expenditure: safety and environment protection 36

Management systems 38

Reinsurance 40

Plans for 2002 41

Statistical appendix 42

Auditor’s report 46

Letter from UNDP 48

Glossary iv

Notes v

Producing Zones

Refineries

Petrochemical Centers

Gas Processing Centers

Wholesale Centers

Pipelines

Maritime Routes

PETRÓLEOS MEXICANOS

WHO WE ARE, WHAT WE DO AND WHERE WE DO IT

Petróleos Mexicanos is a state-owned company comprehensively dedicated to explore, produce and

process oil and natural gas, to produce petrochemicals and refined products and to commercialize them

in the domestic and foreign markets.

PEMEX is integrated by a corporate division and four subsidiaries:

Pemex CorporativoIn charge of the strategic management and coordination of the company’s

functions, it seeks integrity and synergy in its activities.

Pemex Exploración y Producción (PEP)Explores and develops crude oil and natural gas reserves, which

are principally located in the country’s northeast and southeast

regions and offshore in the Gulf of Mexico.

Pemex Refinación (PR)Transforms crude oil into commonly used fuels

such as gasoline, aviation fuel, diesel, fuel oil and

liquid gas, most of which it commercializes and

distributes throughout the country.

ii

Pemex Gas y Petroquímica Básica (PGPB)Processes natural gas and produces basic

petrochemical products; it transports and

commercializes them —along with liquid

petroleum gas— within the country.

Pemex Petroquímica (PPQ)Manufactures and commercializes a wide variety

of raw materials for the country’s chemical and

petrochemical industries, including methane,

ethane and propylene derivatives —such as

ammonia , methanol , polyethylene and

polypropylene— as well as olefins and aromatics.

PEMEX IN MÉXICO

Petróleos Mexicanos is the country’s leading company in terms of sales and assets.Its exports account for 15.4% of Mexico’s overall international sales.

PEMEX contributed with approximately 36% of the Federal Government’sincome during 2001, which makes it the country’s main taxpayer.

PEMEX AND THE WORLD

According to the last Petroleum Intelligence Weekly report2, in the year 2000Petróleos Mexicanos obtained the sixth place among the world’s most importantoil companies, the third place in annual crude oil production, the seventh incrude oil reserves, the seventh in natural gas production and the tenth in refiningcapacity .

In addition, PEMEX relies on the services of the

following organizations1:

PMI Comercio Internacional, S.A. de C.V.A service company that exports crude oil and

products made by PEMEX subsidiaries.

Instituto Mexicano del PetróleoA decentralized governmental organization with

legal capacity and assets of its own; it provides

technological and scientific support for the

production of hydrocarbons and derivatives.

iii

SAFETY, HEALTH AND ENVIRONMENT, 2001 1

Operational highlights.In 2001 Petróleos Mexicanos reached the

proposed goals, it even exceeded the most

important ones.

During 2001 the company set up projects that

have increased the transparency of its processes

and that have focused the working culture on a

corporate vision . PEMEX Corporativo’s

management has been reinforced, working on

structural changes that will lead the company to a

new stage of growth and operation performance

improvement, beginning by expanding proven

crude oil and gas reserves.

In order to keep an adequate level of hydrocarbon

reserves and to initiate a new growth stage, the

investment budget for 2002 is the highest in the

last 20 years , which will allow PEMEX to

implement a portfolio of highly profitable projects.

Highlights 2001*(millions of pesos)

Revenues 424,631Income before taxes 242,002Taxes and duties 263,016

*Unaudited figures

Operation statisticsCrude oil production(thousands of barrels per day) 3,127

Natural gas production(thousands of cubic feet per day) 4,511

Crude oil processing(thousands of barrels per day) 1,252

Refined products(thousands of barrels per day) 1,528

Petrochemicals productiona

(thousands of tons per year) 10,377a

Includes petrochemicals produced by PPQ (5,994 thousand

tons), PR, and ethane and sulfur obtained by PGPB

CASE: PARTICIPATION IN SPECIALIZED ORGANIZATIONS.Petróleos Mexicanos participates in safety and environment issues in the following oil industryorganizations:

• Regional Association of Latin American and Caribbean Oil and Natural Gas Companies(ARPEL), in the Environment, Health and Industrial Safety Committee (CASYSIA) and theClimate Change Working Group.

• Western Hemisphere Oil, Gas and Environment Forum (WHOGEF)

• International Association of Oil & Gas Producers (OGP).


2 PETRÓLEOS MEXICANOS

Petróleos Mexicanos is Mexico’s most important company and the world’s sixth oil corporation.

As a result of its operations, during 2001 it remained the principal contributor to the country’s

fiscal resources; its sales reached 424,631 million pesos and its revenues amounted to 242,002

million pesos.

PEMEX is a state-owned company that supplies fuels and petrochemical raw materials to the

country’s most vital productive sectors; its strategic objective is to contribute to Mexico’s

sustainable development through an efficient exploitation of its hydrocarbons.

Sustainable development is a pillar of the company’s transformation, it means PEMEX must

achieve its economic objectives with safe processes and facilities, with respect for the environ-

ment and in harmony with its neighboring communities.

Petróleos Mexicanos is committed to prove with facts that, concerning safety and environment

protection, it is consistent with its outstanding position in the country and within the interna-

tional oil industry; it is a complex organization that has to take preventive measures to manage

the intrinsic risks in its activities.

As for social responsibility, PEMEX, in addition to granting a substantial amount of economic

resources to the Government so it can comply with its social objectives, performs occupational

health actions that benefit its workers and their families and strives to improve its relationship

with communities neighboring its work centers, contributing to their development.

MESSAGE FROM THE DIRECTOR GENERAL


The implementation of the safety and environmental protection management systems SIASPA

and PROSSPA in all of PEMEX’s work centers will allow us to improve our performance, which

we will be able to measure and report with greater accuracy through the Safety and Environmen-

tal Protection Information Sub-System (SISPA).

These essential issues are covered by the PEMEX Safety, Health and Environment

Report 2001, which I am honored to present, and which has been verified by the external

auditors Mancera, Ernst & Young.

I am convinced that this is an adequate means to achieve accountability in these fields, which is

the basis for establishing a constructive relationship with society. The results published in this

Report show PEMEX is on the right track. However, we must admit there is still work to do, and

we will do it in a responsible and enthusiastic manner.

Finally, I believe this is a great opportunity to corroborate our objective: to make of Petróleos

Mexicanos the efficient, safe and environmentally sound organization Mexico requires. This is a

commitment subscribed by all of the company’s officers and workers.

RAÚL MUÑOZ LEOS

Mexico City

June 3rd, 2002


PEMEX has adopted sustainable development as

one of the pillars of its transformation. Economic

success is no longer enough for a company to

sustain its dynamism; to achieve permanent

development, the balance between economic

growth, quality of life and environmental

preservation is paramount.

The world’s leading companies are applying this

practice and its success can be corroborated in

the financial markets, where their stocks’ average

index exceeds by approximately 30 percent that

of companies that have not included sustainability

in their corporate vision.

For PEMEX, sustainable development involves,

in terms of economic growth, generating enough

income and profits to cover its fiscal obligations

and its investment on exploration, which will allow

it to maintain adequate hydrocarbon reserves. It

means retaining intellectual assets that manage its

activities in an efficient intelligent and transparent

manner, with an accurate strategic planning and

adequate research and development that lead it

to technological self-determination and advance

on specific areas.

SUSTAINABLE DEVELOPMENT IN PETRÓLEOS MEXICANOS

In terms of environmental protection, it implies a

full commitment to standards, which means

reducing polluting emissions and minimizing

waste; in sum, a continuous improvement on its

environmental performance.

In terms of social responsibility it means being a

leader in the community, actively participating in

civil protection plans and actions, maintaining

suitable conditions in its work centers and

becoming a zealous defender of human rights. It

also means maintaining a close and ethical

relationship with the different stakeholders

(authorities, customers, suppliers, etc.).

The practice of sustainability in the company will

create value, which will generate more

advantageous conditions for its operation and

development in the long term. Petróleos Mexica-

nos believes that developing a proactive and

sustainable culture is imperative for the oil industry

since its principal activity —the exploitation of non-

renewable resources— carries inherent risks.

Some of these issues have been approached in

the past, albeit in an inarticulate manner. Today,

actions are being taken toward an integral advance

in order to achieve better socioeconomic, socio-

environmental and ecoefficiency levels that make

Petróleos Mexicanos a more efficient and

competitive industry in the future.

L

E

V

E

L

S

ECONOMIC GROWTH

SOCIAL RESPONSIBILITY ENVIRONMENTAL PROTECTION

SUSTAINABILITY

ECOEFFICIENCY- Efficient use of energy and natural resources- Product competitiveness- Attention to products’ life cycle

SOCIO-ENVIRONMENTAL- Safety and Environmental Protection Policy- Safety and health- Local and regional environment- Climate change- Safety, health and environment reports

SOCIOECONOMIC- Job generation- Training and professional development- Impact on local economy- Social investment- Code of ethics


Information is essential to evaluate safety,

environment and energy use performance in

PEMEX’s industrial facilities . Based on

recommendations made by the external auditor

Mancera, Ernst & Young in its 2000 report, Petró-

leos Mexicanos developed the Industrial Safety

and Environmental Protection Subsystem (SISPA).

SISPA’s main objective is to reinforce information

processing in the indicated areas in order to obtain

timely and reliable data on the operational

condition, incidents and accidents, environmental

performance and emergency response in the

company’s work centers.

This way the auditor’s recommendations will be

fulfilled by integrating and assigning greater

responsibilities to all personnel involved in

operating, safety and environmental protection

activities to raise the quality of the company’s

information.

The company’s environmental and safety

information is also aggregated in real time to

different organizational levels, which generates

greater transparency since data can be traced to

the source.

During 2001 substantial advances were made in

the implementation of SISPA. As of December,

3,134 plants and facilities —assembled in 335 work

centers— and 2,518 registered users had been

brought into the system, and environmental

information starting from the second half of that

year has been consolidated. Such information

constitutes the groundwork for this Report.

Of all emission sources configured into SISPA,

93% of the air emissions reports, 89% of the water

balance’s, 86% of the hazardous wastes’ as well

as 86% of the energy data were processed.

Inventories of emergency response resources and

regional drills —particularly those related to

hydrocarbon spills at sea— were also processed.

Currently, SISPA comprises a series of

environmental indicators specific to each business

line, which allows follow-up on compliance with

established goals and benchmarking among simi-

lar facilities.

WE ARE WORKING

SISPA will be consolidated in 2002 as the

institutional information tool to measure, evaluate

and —most of all— prevent the company’s

environmental impact by reinforcing its use in

emergency management drills and to report

relevant on-site incidents.

It is important to point out that this Report does

not compare the environmental figures obtained

in 2001 to those of previous years, since SISPA’s

information and methodology sources are

different. Thus, 2002 will become the company’s

base line for future evaluations.

In addition, SISPA will serve to promote the

development of other consequential projects,

such as the Internal CO2 Permit Trading System

and PEMEX’s Environmental Atlas.


STRATEGY

CASE: ENVIRONMENT WEEK 2001The PEMEX 2001 Environment Week took place in Mexico City on June 4th to 8th.

The inauguration was presided by Ernesto Martens Rebolledo, Secretary of Energy, Víctor LichtingerWaisman, Secretary of Environment and Natural Resources, Raúl Muñoz Leos, Petróleos Mexicanos’sDirector General and Rafael Fernández de la Garza, Corporate Director of Industrial Safety andEnvironmental Protection.

The company’s advances during the year —reported in the Safety Health and Environment Report 2000—were made known. The following are some of the most relevant observations:

• In terms of industrial safety, the decline of the accident frequency and severity indexes in the 1995-2000 period places PEMEX among the oil companies with the lowest accident levels in the world.

• Environmental protection advances have been continual, especially those related to the reduction ofemissions to air and discharges to water generated at PEMEX facilities.

• Just as production and productivity, the industrial safety and environment protection issues are strategicand fundamental for Petróleos Mexicanos.



Safety and Environmental ProtectionThe strategy of focusing on compliance with

standards , risk management and internal

development of management systems stressed by

PEMEX in the last three years has yielded

advantageous results: the accident frequency and

severity indexes have substantially declined.

With SISPA as an institutional tool, the advances

in environmental data collection and processing

will allow us to accurately evaluate our

performance in this field.

Control calls for measurement , and good

decisions demand reliable, homogeneous and

timely information. It is paramount to get SISPA

—in process of implementation since January

2001— to conclude the stabilization stage and be

used as the basis for all kinds of institutional

reports on these subjects.

However, in order to sustain advances and avoid

regressions, it is necessary to consolidate the

implementation of the SIASPA and PROSSPA

safety and environmental protection management

systems.

In order to promote these systems, in the short

term PEMEX will prevent its work centers from

seeking external certifications, such as ISO, until

they complete the SIASPA Level 3 –implementation

of processes required by each of the system’s

elements– except in the case of tangible benefits

or unavoidable commitments.

This, in addition to encouraging support to internal

systems, will later help to obtain external

certifications by applying procedures and actions

developed in SIASPA.

The Corporate Direction of Industrial Safety and

Environmental Protection (DCSIPA) will be

reorganized and the subsidiaries’ Safety and

Protection Audits will be adjusted to promote the

institutional policy in these matters, to make each

worker accountable for them on a daily basis and

to make the specialized structures basically

consultants and leaders.

As a long-term strategy, the company will keep

advancing toward sustainable development. The

Permanent Campaign for the Efficient Use and

Saving of Energy will remain in force to obtain the

economic and environmental benefits produced

by the rational use of energy, and the Internal CO2

Permit Trading System will continue in operation.

• PEMEX will strive to reach or exceed the safety and environment results of other oil companiesacknowledged for their performance in these issues.

• PEMEX has the purpose of being recognized as a company that harmonizes an efficient operating andfinancial performance with care for the environment and a rational use of natural and energy resources.

• In June 2001, PEMEX established an Internal CO2 Permit Trading System, which places it among the

world’s oil companies that have implemented greenhouse gas emissions reduction systems, and makesit the first company from a developing country to do so.

• It is imperative for the company to get the general public to know its safety and environmental protectionachievements. PEMEX’s image must change to that of an excellence company in all senses.

During the ceremony, ISO-14001 certificates were awarded to PEMEX Petroquímica’s La Cangrejera,Morelos, Escolín, Pajaritos, Tula, Camargo and Independencia petrochemical complexes. Later, in thePEMEX Executive Tower, the Environment Week Exposition was inaugurated and remained open fromJune 4th through 8th. PEMEX and its subsidiaries, SEMARNAT, the UN, IMP, CONAE and USAIDparticipated in this exposition.



HEALTHOCCUPATIONAL

PEMEX’s Sub-Direction of Medical Services has

established the promotion of health among its

active and retired workers and their families as

the main objective of its 2000-2003 Strategic Plan,

focusing on extensive care and prevention.

During February 2001, the Integral Medical Care

Program was installed in Baja California at the

Rosarito, Ensenada and Mexicali Storage and

Distribution Terminals (SDT). 360 workers and

their families were examined, with positive results

in reducing risk factors associated to lifestyle and

work exposure. The program was subsequently

extended to the SDT in Chihuahua (280 workers)

and to Petroquímica Camargo (360 workers).

Environmental and biological monitoring of the

workers’ exposure to gasoline organic fumes

(benzene, toluene and xylene) were carried out

at the Rosarito, Ensenada and Mexicali SDT,

measuring metabolic indicators in the workplace

and in the workers’ organisms. The results

obtained fall within the limits allowed by the

Mexican official guidelines.

In 2001, 86,541 medical check-ups were

performed to assemble the workers’ Health

Profiles. Moreover, the control of lifestyle and

work exposure risk factors was encouraged.

The SIASPA and PROSSPA Occupational Health

Strategic Plan was devised in May 2001. Its

purpose is training the medical personnel at the

subsidiaries’ work centers.

The Plan has five stages:

• Review and update of the internal Occupational

Health framework.

• Pilot tests in seven work centers (subsidiaries

and corporate).

• Evaluation of the pilot test.

• Implementation in all occupational health

medical units.

• Follow-up and control.

The following advances have been obtained:

• The Organization Manual —containing more

than 25 operating instructions— was authorized.

• A procedure for the biological monitoring of

workers exposed to organic solvents and the

framework for the Risk Atlas and Maps were

devised.

• Pilot work centers were chosen: PEP’s Akal

DB platform, Nohoch “A” and the Burgos asset’s

General Bravo area; the Cadereyta refinery, the

Nuevo Pemex GPC, the Cangrejera PQC and

the Ciudad Madero Regional Hospital.

• The first meeting with the Well Drilling and

Maintenance Unit to program training sessions

was held in November.

• The Health and Disability Profile Information

Systems were set up.


SafetyPEMEX has achieved significant advances in the

strengthening of industrial safety, as reflected by

the frequency and severity indexes’ downtrend

of the last 6 years. The following are the results

reported in 2001:

• PEMEX’s overall frequency index dropped

17% compared to 2000 (from 1.19 to 1), while

the severity index decreased by 38% (from 170

to 106).

• These figures reveal a substantial contraction;

there was only one disabling accident per more

than 1 million hours worked (1,007,561 man-

hours), which represents a 20% increase in

hours worked per disabling accident compared

to 2000.

• Although statistics show advances, in 2001 PE-

MEX underwent five fatal work accidents.

• Petróleos Mexicanos is executing a deep

technical analysis of each of these accidents to

ascertain their cause, studying all the elements

that can help determine the conditions in which

they occurred in order to take the necessary

measures to prevent future similar accidents.

The safety performance of all the PEMEX

subsidiaries during 2001 compared to the

previous year is shown below:

Pemex Exploración y Producción. Although

it experienced three fatal accidents, its severity

index dropped 44% and its frequency index

fell 26%.

Pemex Refinación. In December, an accident

of considerable dimensions occurred in the Tula

refinery in Hidalgo. However, its severity and

frequency indexes declined, respectively, 33% and

4%, with which it remains as one of the subsidiaries

with the lowest indexes (0.69 frequency and 85

severity).

Pemex Gas y Petroquímica Básica. It has

reported no fatal accidents for the second

consecutive year and its frequency index (0.50,

or a 44% decrease from the previous year)

remains Petróleos Mexicanos’s best. Its severity

index fell from 109 to 88, a 19% reduction.

Pemex Petroquímica. 2001 has been this

subsidiary’s best year in terms of safety. Its

frequency index dropped 50% (from 1.06 to

0.53) and its severity index declined 51% (from

170 to 84), obtaining Petróleos Mexicanos’s

greatest reduction in both indexes.

SAFETY


CASE: REINFORCEMENT OF A CULTURE OF SAFETY IN PEMEX• The company carried out a campaign that included training of floor supervisors and diffusion of postersdescribing the Executive Tower’s risk circumstances and safety features, and five partial emergency drillsfor explosion, fire, and care of injured individuals for an integral management of emergencies.

• The Petróleos Mexicanos Mixed Group for the Coordination of Local Mixed Safety and HygieneCommissions (GMC) operated according to the contractual commitments for the 1999-2001 period.Its function is to coordinate representatives from the Medical Services Sub-Direction, the AdministrativeCenter’s Integrated Services Unit and the Telecommunications Engineering Management —members ofthe GMC.

• Two integral fire evacuation drills were carried out, one at the Coatzacoalcos CENDI and the other atthe Nanchital CENDI.


1996

19971998

1999

2000

2001

1996

1997

1998

19992000

2001

1996

1997

19981999

2000

2001

1996

1997

1998

19992000

2001

19961997

1998

1999

20002001

1996

19971998

1999

2000

20011.00

4.92

3.96

2.68

1.39

1.19

477

307

325

180

170

106

1.86

3.11

2.05

1.84

1.25

1.49

197

38

69

21

32

53

0.53

2.33

2.31

1.48

1.92

1.06

326

152

175

173

170

84

0.50

4.86

1.04

0.50

0.55

0.90

1,004

224

327

118

109

88

9.04

7.48

4.66

1.76

1.66

0.69

2.70

2.59

1.92

1.08

0.72

1.26

702

572

436

180

277

155

302

229

350

253

126

85

aSome indexes’ variations from the 2000 report are due toimprovements on the subsidiaries’ databases, including the recentevaluation of partially or permanently disabling accidents which, insome cases, are determined up to two years after they happen.

Accident indexes1996-2001a

F r e q u e n c y Year S e v e r i t y

Pemex Gas y Petroquímica Básica

Pemex Exploración y Producción

Pemex Refinación

Pemex Petroquímica

Petróleos Mexicanos

PEMEX Corporativo

PEMEX Corporativo. Although not

performing industrial activities , corporate

personnel are also exposed to accidents. In 2001,

its frequency and severity indexes rose 25% (1.49

to 1.86) and 66% (32 to 53).

Contractors. In its safety improvement process,

Petróleos Mexicanos continues performing follow-

up on contractors’ safety. In 2001, the contractors’

frequency index rose 37% compared to 2000,

from 1.8 to 2.47.

Petróleos Mexicanos’s safety results in 2001 allow

us to reach two important conclusions:

• The Industrial Safety and Environmental

Protection Management Systems (SIASPA and

PROSSPA) have been successful, achieving

substantial improvements on the accident

indexes and on PEMEX’s overall safety culture.

• The unfortunate personal and industrial

accidents, such as the Tula refinery’s, indicate that

efforts at all levels must be maintained and that

actions to intensify the implementation of SIPA

Management Systems to safeguard personnel

and facilities safety must continue.


RegulationsPEMEX must comply with the Federal Metrology

and Standardization Law —particularly with the

Mexican Official Standards (NOM). According to

this Law, it must issue guidelines for the acquisition,

lease and contract of goods and services.

The Petróleos Mexicanos and Subsidiary

Organizations Standardization Committee was

created in October 1998; in 2001 it issued 19

guidelines that can be consulted at

www.pemex.com, as well as 46 projects for

standards that will become operative in 2002.

Guidelines help suppliers, contractors and other

purveyors of goods and services to comply with

official requirements , in addition to those

determined by the company. They provide a legal

framework in which representatives of the

domestic and international industry participate and

they cover the public consultation requisite

established by law.

PEMEX participates in 14 National Standardization

Consulting Committees and in the teams that

create and review the Mexican Official Standards.

During the First Seminar on Standardization and

Conformity, held in Mexico City in November

2001, the standardization advances on conformity

evaluation and third party certification were

analyzed. As a result of this seminar, the

Committee agreed to hold the First National

Crusade for Standardization and Conformity

Evaluation in PEMEX and its subsidiaries in 2002.

One of SIASPA’s objectives is to provide the PE-

MEX work centers with a complete and updated

standardization framework. To achieve this, the

Corporate Standards Library —which has 22

collections of international regulations available for

consultation— was created.

In addition, general Safety, Environmental

Protection, Quality, Civil Protection and

Occupational Health guidelines have been issued

to prevent risks during the design, construction,

operation, survey, maintenance and decommissioning

of company facilities.


The reported compounds are sulfur oxides

(SOx), nitrogen oxides (NOx), total suspended

particles (TSP) and total organic compounds

(TOC). This section does not include carbon

dioxide (CO2) emissions, which are reported in

greenhouse gases.

Discharges to water include compounds subject

to the established environmental legislation’s con-

trol, which are present in water streams as a result

of the use of water in the processing of

hydrocarbons and petrochemicals. There are

three main parameters: oils and greases (O&G),

total suspended solids (TSS) and total nitrogen

(Ntot). A fourth parameter (Others) includes

sulfurs, phenols and heavy metals.

Hazardous wastes include those specified as such

by the Mexican law.

Finally, hydrocarbon spills and leaks include those

occurred in land and sea.

Since 1997, Petróleos Mexicanos and its

subsidiaries have worked with a series of

indicators to measure performance and prevent

the environmental impact of oil activities.

This objective has been strengthened with the

implementation of SISPA in 2001. Through this

information platform, industrial and distribution

facilities directly record their environmental and

safety data, which are processed according to

internationally accepted factors —homologated

throughout the company— to obtain estimates for

each item.

PEMEX’s total emissions and discharges include

air emissions, discharges to water, hazardous

waste generation and hydrocarbon spills and leaks.

Emissions to air include the main compounds

generated by hydrocarbon combustion and

evaporation, as well as those produced by the

combustion of sulfurous gas and water streams.

TOTAL EMISSIONS AND DISCHARGES

EMISSIONSAND

Emissions and discharges (tons)

PEP 251,247 318 217,758 2,071

PR 460,413 2,658 40,277 5,900

PGPB 210,685 393 1,219 59

PPQ 37,381 857 19,269 0

Total 959,726 4,226 278,523 8,031

Emissions Discharges Hazardous Hydrocarbonto air to water waste spills and leaks

generation

Total

2001 1,250,507

PEP

PR

PGPB

PPQ

38%

40%

17%

5%


DISCHARGES

EMISSIONS PER UNIT OF THROUGHPUT

The release of pollutants to the environment is

recorded according to each operating area’s type

of activity. In order to obtain indexes that allow

for periodical comparison, PEMEX has linked

pollutants to specific activities, so PEP’s emissions

and discharges are related to crude oil and gas

production, PR’s to crude oil processing in

refineries, PGPB’s to its hydrocarbon production

and PPQ’s to petrochemical production.

Production Emissions and discharges

2001 320,399,018 1,250,507

Total emissions and discharges per unit of throughput (tons)

Total emissions and discharges Production 2001%

PEP 471,395 204,841,214 0.230%

PR 509,249 64,627,529 0.788%

PGPB 212,356 45,362,075 0.468%

PPQ 57,508 5,568,200 1.033%

0.390%

99.610%

Total

PEP

PR

PGPB

PPQ


AIR

EMISSIONS TO AIR

During 2001, emissions to air accounted for 77%

of PEMEX’s total emissions and discharges; 72%

of them are SOx and 11% are TOC.

Approximately 55% of the SOx emissions were

generated at refineries. Tula (16%) and Salina

Cruz (15%) reported the greatest figures; the Gas

Processing Centers’ gas sweetening and sulfur

recovery plants —particularly those at Nuevo Pe-

mex (8%) and Cactus (3%)— emitted 23%; and

18% was generated at PEP’s offshore facilities,

mainly at the Cantarell Asset’s flares (13%).

The country’s six refineries released 27% of the

TOC3. The Salamanca (10%) Minatitlán (8%), and

Madero (4%) facilities registered the greatest

levels of hydrocarbon evaporation.

It is worth noting that Cactus’ contribution to SOx

generation was acutely reduced due to the startup

of the Super Claus sulfur recovery plants.

The Cantarell Asset’s natural gas compression

capacity increased in 20%, which induced a decli-

ne in SOx emissions at the Marine Northeast

Region.

SOx NOx TSP TOC

Emissions to air (tons)

PEP 153,765 43,809 1,657 52,016

PR 376,483 25,193 19,937 38,800

PGPB 156,763 9,647 38,889 5,386

PPQ 679 8,174 22,349 6,178

Total 687,690 86,823 82,832 102,381

4%

48%

22%26%

Total

2001 959,726

PEP

PR

PGPB

PPQ


CASE: REDUCTION OF SO2 EMISSIONS IN PGPBThe three main GPCs —Cactus, Nuevo Pemex and Ciudad Pemex, which sweeten 93% of PGPB’s sourgas— comply with the international standard for emissions of sulfur dioxide (SO2), principal precursor ofacid rain. These complexes used to emit substantial quantities of SO2

due to their obsolete processesand poor efficiency in the conversion of H2S into sulfur.

A 392 million dollars investment was made to install five sulfur recovery plants (Super Claus process) inCactus and to refurbish the two plants in Nuevo Pemex and the two in Ciudad Pemex. The Claus selectiveoxidation process was selected to treat exhaust gases from the Claus process in these last four plants.This guarantees a 98.5% conversion to sulfur and emission levels of 30 Kg of SO2

per ton of processedsulfur —below the 50 Kg/ton limit established by the U.S. EPA.

Emissions of SO2 to air in 2000 amounted to 287 Kg per ton of processed sulfur. By December 2001, SO2emissions in the Cactus, Nuevo Pemex and Ciudad Pemex GPCs had plunged respectively to 13, 15 and20 Kg/ton, a substantial reduction of SO2

emissions that diminished the generation of acid rain and thesulfurous odor in the locality.

These measures generate benefits in the area by reducing the impact of SO2 on the workplace andpersonnel and corrosion produced by acid rain on facilities and neighboring communities .


DISCHARGES TO WATER

Discharges of pollutants to water account for less

than 1% of PEMEX’s total emissions and discharges.

Almost 58% are total suspended solids (TSS),

21.6% are oils and greases (O&G) and 19.2% are

total nitrogen (Ntot).

In 2001, 4,226 tons of pollutants were discharged

to water, specifically 2,445 tons of TSS, 913 of

O&G, 813 of Ntot y 55 of Others.

During that year, five work centers discharged

75.9% of the total oils and greases: the Minatitlán

(48.6%), Cadereyta (8.5%) and Salamanca (6.8%)

refineries and the Cangrejera (8%) and Morelos

(4%) petrochemical complexes.

As for total suspended solids, six facilities

contributed with 65.1%: the Salamanca (15.1%),

Minatitlán (12.8%), Cadereyta (11.2%) and Tula

(4.5%) refineries and the Morelos (14%) and

Cangrejera (7.5%) petrochemical complexes.

In terms of total nitrogen, four refineries generated

83.5%: Salamanca (21 .9%), Tula (21 .5%),

Cadereyta (21.2%) and Minatitlán (18.9%).

Total

2001 4,226

Discharges to water (tons)

PEP 53 260 5 0

PR 651 1,274 689 44

PGPB 53 220 112 7

PPQ 156 691 7 3

Total 913 2,445 813 55

Oils and Suspended NTot Othersgreases solids

63%9%

8%

20%

WATER

PEP

PR

PGPB

PPQ


Produced waterDuring 2001, the South, North and Marine

Southwest regions produced 12.28 millions of

cubic meters of water, 87.9% of which was re-

injected. The South Region re-injected almost all

the water produced by its crude oil extraction

operations; the Marine Southwest Region re-

injected 37.6% and the North Region re-injected

97.1%

Water useDuring 2001, Petróleos Mexicanos used 270.2

million cubic meters of water in its transformation

processes; 37 million cubic meters were used by

PEP, 132.4 million cubic meters by PR, 40.4 million

cubic meters by PGPB and 60.4 million cubic

meters by PPQ.

In terms of units of throughput, Petróleos Mexi-

canos used 0.84 cubic meters per ton of product;

0.18 in PEP, 2.05 in PR, 0.89 in PGPB and 10.85 in

PPQ.

Water use 2001 Input Input per product unit(m3) (m3/ton)

PEP 37,007,987 0.18

PR 132,392,397 2.05

PGPB 40,389,511 0.89

PPQ 60,432,928 10.85

Total 270,222,824 0.84

PEP

PR

PGPB

PPQ

Produced water Separated Re-injected Discharged Transferred Re-injection(m3) (m3) (m3) (m3) %

PEP 12,278,133 10,496,841 1,781,171 336,358 87.9

North Region 4,849,047 4,708,630 140,417 0 97.1

South Region 5,302,750 4,987,774 314,975 336,358 100

Marine Southwest Region 2,126,114 800,438 1,325,677 0 37.6

UPMP 222 0 102 0 0

PEP


The volume of hydrocarbons spilled and leaked

by PEMEX in 2001 accounts for 0.6% of its total

emissions and discharges4; 75% of this volume

resulted from the 73 incidents occurred at PR

facilities; the rest was generated by the 1,169

incidents at PEP facilities.

Virtually all the volume spilled by PR was registered

at the country’s four pipeline sectors, with a 48%

occurrence in the Southeast sector. As for PEP,

97% of the volume was spilled at land facilities.

Three important spills, amounting to 56% of the

subsidiary’s spilled volume, occurred at PR facilities

during the year. Two of them took place in the

Minatitlán pipeline sector; the first —of

approximately 14,500 barrels of crude oil— was

HYDROCARBON SPILLS AND LEAKS

Hydrocarbon spills Hydrocarbon leaks

Number Volume Number Volume Number Quantity(barrels) (barrels) (tons)

PEP 52 368 403 14,160 714 29

PR 4 13 67 43,493 2 1

PGPB 0 0 0 0 7 59

PPQ 0 0 0 0 0 0

Total 56 381 470 57,653 723 90

SEA LAND AIR

PEP

PR

PGPB

PPQ

Total

2001 57,653 barrels

75%

25%

Total

2001 90 tons

66%

33%

1%

Spills Leaks

due to a fracture of a 30” pipe at the Nuevo Teapa-

Poza Rica oil pipeline, 6 kilometers away from

Nuevo Teapa, and the second —4,423 barrels of

diesel— was due to clandestine tapping of a 12”

pipe at the Minatitlán-Villahermosa pipeline, 102

kilometers away from Minatitlán. The third was a

5,371 barrels of gasoline spill due to clandestine

tapping at the Bajío pipeline sector.

The three main PEP spills account for 50% of the

subsidiary’s total. In terms of volume, the largest

(2,706 barrels) was due to an incident at the

Samaria 75 well at the Reforma Well Drilling and

Maintenance Unit. The second (2,623 barrels)

resulted from a spill at the 48” bridle at Dos Bo-

cas, Marine Southwest Region; and the third was

a 1,887 barrels crude oil spill at the Sánchez

Magallanes 373 well in the Cinco Presidentes asset

caused by acts of vandalism.


SPILLS


CASE: PREVENTION AND RESPONSE PROGRAM FOR HYDROCARBON SPILLS AT SEA

PEMEX participates in the National Contingency Plan to Combat and Control Spills of Hydrocarbonsand other Noxious Materials at Sea coordinated by SEMARNAT and the Mexican Navy.

The following are some of the plan’s most prominent activities:

• Nationwide advertising of the PEMEX General Contingency Plan for Hydrocarbon Spills at Sea (PGP),which establishes the company’s and its subsidiaries’ role in case of an offshore spill .

• Contingency Task Forces were integrated and the personnel, training and equipment requirementsfor seaports and offshore were established.

• Seven major drills were carried out; three of them at seaports where no drills had been performedbefore and one —a simulation of a hydrocarbon spill at a marine platform— in Cayo Arcas, 90 nauticalmiles away from Ciudad del Carmen, Campeche.

The program obtained the following results during 2001:

• Integration of multidisciplinary teams to combat hydrocarbon spills at sea, which were evaluatedduring the drills.

• Evaluation of the Pacific, Gulf and Caribbean coasts local coordination teams’ response capability.

AND LEAKS


HAZARDOUS WASTES

Hazardous wastes generated by operations

account for 22% of Petróleos Mexicanos’s total

emissions and discharges. Roughly 86% of the total

volume is made up of three kinds of wastes: 72%

correspond to drilling muds and cuttings, 8% to

oily sludges from refineries and PEP’s North

region, and 6% to used oils from refineries and

petrochemical complexes —mainly Cangrejera

and Pajaritos.

PEP’s Well Drilling and Maintenance Unit generated

200 thousand tons of drilling cuttings and muds5;

74 % was produced at the North Division,

specifically at the Burgos Unit, 19% at the South

Division (principally at the Comalcalco operating

unit) and 6% at the Marine Division. The year-end

inventory of this kind of waste was zero.

Virtually all of PR’s wastes (95%) are generated

at refineries, mainly at Madero, Cadereyta,

Minatitlán and Tula. The first generated 6,856 tons

of wastewater treatment muds and 4,263 tons of

oily sludges; the second, 2,926 tons of wastewater

treatment muds and 8,000 tons of used oils; the

third, 3,188 tons of oily sludges; and the last, 4,342

tons of used catalyzers6.

The Madero refinery eliminated approximately

21,000 tons of oily sludges and 15,756 tons of

wastewater treatment muds, and Cadereyta

eliminated 19,000 tons of wastewater treatment

muds and 8,000 tons of used oil. Roughly 40% of

the hazardous waste inventory corresponds to oily

sludges from the Minatitlán refinery and 17% to

biological muds from the Salamanca refinery.

Hazardous wastes (tons)

PEP PR PGPB PPQ

Initial inventory 125,550 101 118,005 1,411 6,033

Generation 278,523 217,758 40,277 1,219 19,269

Elimination 313,406 213,556 81,440 618 17,792

Final inventory 90,668 4,303 76,843 2,012 7,510

PEP PR PGPB PPQ

WASTES20 PETRÓLEOS MEXICANOS


The Pajaritos and Morelos petrochemical centers

generated 77% of PPQ’s hazardous waste

(respectively, 6,457 tons of heavy chlorinated

hydrocarbons and 4,120 tons of wastewater

treatment muds). All wastewater treatment muds

were eliminated. Pajaritos contributes with 80%

of the hazardous waste inventory, which basically

comprises 3,925 tons of heavy chlorinated

hydrocarbons and 1,516 tons of muds with

dichloroethane.

70% of the hazardous waste generated by PGPB

is divided in three kinds: used oils, used catalyzers

and wastewater treatment muds. 63% of its

inventory is made up of 1,265 tons of used oils

stored at the Ciudad Pemex GPC.

PEMEX’s final hazardous wastes inventory in 2001

reached 90,668 tons.


CASE: ELIMINATION OF HEXACHLORINATED COMPOUNDS IN THE PAJARITOS PQC

According to the Agreement for the Industrial Development and Urban and Environmental Alignment ofSouthern Veracruz signed by PEMEX, federal authorities and the state and municipal governments, in theJanuary-June 2001 period 4,344 tons of hexachlorinated compounds that were stored at the PajaritosPQC were destroyed. This figure includes 4,209 tons of hexachlorinated compounds and liquids, plus thecontainers and instruments used for handling them.


During 2001 PEMEX released 40.05 million tons

of carbon dioxide (CO2). PEP emitted 33.1%

of this quantity, PR 34.2%, PGPB 16.0% and

PPQ 16.7%.

Scientific evidence shows that global heating

caused by greenhouse gases (CO2 among them)

generates atmospheric disturbances, which carry

dire consequences.

PEMEX has studied the oil industry’s role in

preventing and controlling this phenomenon

within the Kioto Protocol framework —an United

Nations initiative.

GREENHOUSE GASES

The PEMEX Internal CO2 Permit Trading SystemTo reduce GHG emissions, in June 2001 PEMEX,

with technical support from Environmental

Defense (www.environmentaldefense.org) —a

non-government organization experienced in

developing similar systems for world-class

companies— launched its Internal CO2 Permit

Trading System.

Being one of the first companies from a developing

country to voluntarily create an internal carbon

permits market, PEMEX is among the world’s

leaders in the field.

16%

33%

34%

17%

CO2 emissions (millions of tons)

1999 2000 2001

PEP 13.87 14.23 13.26

PR 15.09 14.18 13.69

PGPB 6.27 6.49 6.41

PPQ 6.32 6.53 6.68

Total 41.55 41.43 40.05

PEP

PR

PGPB

PPQ

GASESCASE: CO-GENERATION PROJECT AT THE CACTUS GPCThe Cactus GPC in Chiapas has four turbo-generators that make it self-sufficient in terms ofelectric power.

Gases resulting from combustion in turbines —which reach temperatures of 517oC— used to be released

into the atmosphere wasting their calorific power.

Two heat recovery units were installed during 2001 to use the heat contained in the exhaust gases fromthe two turbines to heat-evaporate water for boilers and to overheat vapor for motion purposes. Thishelps to save energy and to protect the environment.

By not flaring 10.32 million cubic feet per day of flammable gas, 526 tons less of CO2 per day reach theatmosphere and the temperature of vented gases decreases, which generates economic andenvironmental benefits.

Total

2001 40.05


There are currently 25 Business Units (BUs)

participating in the program: PEP’s four regions,

six PR refineries, seven PGPB gas-processing

complexes and eight PPQ petrochemical

complexes. The Corporate Environmental

Protection Audit coordinates the program’s

development and operation.

For the June-December 2001 period, each BU

was assigned a reduction goal of 1% from the

19997 base line. 3.1 million tons, with a virtual value

of 175 million pesos, were traded; 13 BUs became

permit sellers and 12 became buyers.

During 2002, PEMEX will announce its reduction

commitment for the 2002-2010 period.

Online operations are performed in the

Transaction Recording System (TRS) designed by

PEMEX, and the CO2 emission data originate in

SISPA.


CASE: ARPEL - PEMEX WORKSHOP TO DEVELOP THE CAPACITY TO OBTAIN CREDITS FROM EMISSION

REDUCTION PROJECTS IN LATIN AMERICA

The reduction of greenhouse gases emissions via energy efficiency and forestry projects could becomemore profitable considering the additional income from the sale of GHG emissions reduction certificatesto countries and companies from the developed world that have emissions reduction commitments . Toachieve this, projects must comply with requirements established in the Kioto Protocol’s CleanDevelopment Mechanism (CDM).

To prepare the region’s oil industry in CDM project development, ARPEL carried out a workshop inMexico City in October, with PEMEX as a host. More than 80 participants and 18 domestic and foreignlecturers delved into key issues and shared their experiences. A wide range of stakeholders—governments,industry (oil and gas), international organizations, NGOs and consulting firms— were present.

The PEMEX Internal CO2 Permit Trading System —which operates in real time since June 2001— was anoutstanding feature in this workshop.

During a visit to PEMEX facilities, ARPEL’s Climate Change Working Group inspected the company’sInternal CO2 Permit Trading System’s operation. According to its president, Arthur Lee, “this is one ofthe best systems, maybe the best I’ve seen in different companies. I would like to congratulate PEMEX,our host, for this great effort”.


ENERGY CONSUMPTION

PEMEX used energy equivalent to 166.7 million

barrels of crude oil equivalent (BCOE) in its

2001 operations.

PEP consumed an amount of energy equivalent

to 1.4% of its crude oil and gas production. PR

consumed an equivalent to 9.4% of the refined

products it generated. Gas processing and

distribution consumed energy equal to 4.1% of the

hydrocarbons produced by PGPB. PPQ used 4.14

BCOE per ton of petrochemicals produced.

Virtually all the energy used by PEMEX comes from

fossil fuels; a mere 1% corresponds to net electric

power consumption. Fuels used in 2001 were gas

(83%), fuel oil (14%), and the remaining quantity

was made up of diesel and other fossil fuels.

Permanent Campaign for the Efficient Use andSaving of Energy 2001PEMEX established the Institutional Efficient

Energy Use and Saving Program to permanently

optimize energy use in its processes.

This program includes the Permanent Campaign

for the Efficient Use and Saving of Energy 20018,

in which 205 work centers and eight office

buildings participate.

Energy Consumption Index reduction goals

between 1.5% and 5% were established for each

business line to provide the means to compare

similar activities.

As a result of this campaign, 46% of these facilities

reached or exceeded the established reduction

goal 9, achieving savings of roughly 10.6 million

BCOE —worth 197 million dollars10— in addition

to reducing CO2 emissions by 3.2 million tons11

Due to its re-configuration, the Cadereyta

Refinery reduced its energy consumption by

approximately 150 thousand BCOE, dropping its

energy intensity index by 7.31 points.

ENERGYEnergy consumption (MMBCOE) 2001 2001

(includes flaring)

PEP 31.6 75.8

PR 44.7 48.5

PGPB 19 19.4

PPQ 23 23.1

Total 118.3 166.7

PEP

PR

PGPB

PPQ

SAFETY, HEALTH AND ENVIRONMENT, 2001 25SAFETY, HEALTH AND ENVIRONMENT, 2001 25

CASE: TRAINING OF ENERGY AND ENVIRONMENT SPECIALISTS

During 2001, with the support of USAID, PEMEX trained 320 professionals from the four subsidiaries asspecialists in energy-environment diagnosis and 58 more as experts in the evaluation of energyefficiency projects.

These individuals will be responsible of starting the diagnosis of the company’s principal work centers andintegrally identifying and evaluating the selected projects to ensure an efficient use of energy. The projectswill help PEMEX to achieve its GHG emissions reduction goals.


ENVIRONMENTAL AUDITS AND CLEAN INDUSTRY CERTIFICATES

Petróleos Mexicanos, in coordination with

PROFEPA, strives to guarantee environmental

laws are observed.

• In 2001, PEMEX concluded 72 audits and

obtained 50 Clean Industry Certificates.

• From 1993 to date 303 audits have been

performed12, reaching a coverage of 46% of its

656 certifiable facilities. 77% of the PPQ facilities

have been audited, 55% of PGPB’s, 52% of PR’s

and 42% of PEP’s.

• In addition it received 36 validations of previous

certificates during the year.

• Most of the main facilities have been audited:

six refineries, seven gas processing centers13 and

eight petrochemical complexes. Efforts are being

made to evaluate the main PEP facilities.

• The company’s certificates/audits ratio is 92%.

• 31% of the Clean Industry Certificates issued

countrywide by PROFEPA to date have been

obtained by PEMEX facilities.

PEP

PR

PGPB

PPQ

1

63

8

79

10

113

29

Environmental audits1993-2000 Total: 231

Environmental audits2001 Total: 72


9

29

87

154

20

40

60

80

100

120

140

160

Clean Industry CertificatesTotal: 279

AUDITSCASE: ISO-14001 CERTIFICATES

The PPQ work centers have received 15 ISO-14001 certificates under both the European and Americanstandards, with the exception of Petroquímica Cosoleacaque that has only received the American certificate.

During the year, PGPB obtained certificates in eight of its facilities.

PR obtained six certificates in 2001 in five refineries and the Valle de México Commercial Management.

PEP PR PGPB PPQ


To date, through the Institutional Safety and

Environment Research Program (PIMAS), PE-

MEX and the IMP have assigned 462 million pe-

sos to the following research and development

projects:

1. Complementary biotechnology for dieselhydrodesulfurization.It develops and evaluates biotechnolog ical

alternatives to hydrodesulfurization; selective

removal of sulfurous compounds from diesel

through enzymatic oxidation, selective adsorption

and microbiological removal.

Advances during 2001 include the identification

and positive testing of natural and synthetic

polymers capable of adsorbing sulfonates, as well

as the selection of a marine fungus enzyme capable

of desulfurizing compounds such as DBT, DBTS

and deep hydrodesulfurization diesel.

2. Biological treatment of complex outflow:sour and phenol waters and tail gases.It develops biotechnological processes to treat

outflows and emissions rich in aromatics, sulfuric

acid and amino radicals generated by the oil

industry in an integral and sustainable manner.

Three biological processes have been developed:

an anaerobic reactor to remove aromatic

compounds, a re-circulation reactor to oxidize

sulfurs and nitrification processes to transform

ammonia. These processes are working at high

load and efficiency levels . Basic and detail

engineering for a pilot plant to treat 130 l/d of

sour water and 3 l/d of exhausted sodas have been

developed.

RESEARCH AND DEVELOPMENT

3. Natural remediation of hydrocarbon-contaminated sites.Natural remediation systems , in situ bio-

stimulation processes and bio-batteries to restore

hydrocarbon-polluted sites are being analyzed.

Two selected sites have been featured; the first

monitoring comprised six wells per site and 15

borings to four different depths . Analytic

hydrocarbon fractionating techniques were

established for bio-batteries, selecting agricultural-

industrial wastes to eliminate hydrocarbons.

4. Technical-economic analysis of theenvironmental impact of natural and liquidpetroleum gas use in Mexico.It determines emission factors and the inventory

of sources and equipment that release pollutants

into the atmosphere. It simulates meteorological

scenarios for two seasons of the year and evaluates

the environmental impact expected from the

projected intensification of natural gas use and

from the increase in the demand for liquid gas, to

determine cleaner fuel policies.

During the year, a network of 68 sampling sites

was installed in the country’s southeast region to

start in-field assessment, and several fuel demand

scenarios (natural gas and gasoline) have been

devised.

5. Research on natural and man-generatedemissions in PEMEX’s offshore activities.It provides a physical, chemical and biological

description of the sites with natural hydrocarbon

outflows and their contribution to the marine

environment, in order to establish and compare

the real input generated by PEMEX activities.

An oceanographic campaign to prospect the

marine soil and to locate natural hydrocarbon

outflows was carried out, as well as sampling of

water columns and sediments for geo-chemical

studies in areas with intense oil-related activities

in the Gulf of Mexico.

RESEARCHAND DEVELOPMENT


6. Integral study of particle pollution in theMexico City Metropolitan Area (MCMA) andits global and regional impact, using air qualitymodels.It analyzes emission transformation and dispersion

mechanisms through pollutant-transportation

models, quantifying and identifying the PM10 and

PM2.5 particles’ contribution.

The wind simulation meteorological model for the

MCMA was formulated in 2001 . Three

predominant wind flows have been detected, and

it as been proved that PM2.5s constitute between

44 and 61% of PM10. The contribution of PM2.5

y PM10 due to fuel use in the MCMA has been

determined.

7. Research and technological development ofdiabatic distillation processes.It develops diabatic distillation systems that

optimize distillation in refining processes by

reducing energy degradation.

Rigorous simulations of slow coking, sulfur, MTBE,

TAME and alkylation processes were carried out

during the year. Basic and detail engineering for

the pilot plant’s testing bench were developed.

8. Optimization of heavy fuel burning throughwater emulsification.It researches and develops technology to emulsify

heavy fuels in water.

A pilot emulsion producing plant has been built

and is operating.

Equipment for the emulsions physical-chemical

stage and micro combustion has been acquired.

9. Research for the development of low-impactfuels.It establishes environmentally sound and

technically feasible fuel substitution alternatives,

considering their effects on emissions to air, air

quality and health.

Current and future fuels were tested in smog

chambers. Methodologies for the calculation of

specific hydrocarbon compounds and particles

were implemented and a toxicology laboratory

was created. The photochemical model’s

predicting capacity was improved.

10. Research on environmental pollutiongenerated by oil refining processes in Mexico.It develops and applies methods to obtain air

emission and water discharge factors and

sustainable development indicators for the refining

processes in Mexico.

Four sampling campaigns were carried out, with

12 monitoring stations in two refineries with

different environmental conditions. There have

been advances in the decision tree’s basic

structure, in the natural, social and economic items’

attributes.


30 PETRÓLEOS MEXICANOS30 PETRÓLEOS MEXICANOS

SOCIAL RESPONSIBILITY

Contributions$394,975,083

42.1%

57.9%

Donations$286,776,312

High PEMEX presence(4 states)

Other entities (18 states)

Low PEMEXpresence(5 states)

79.8%

9.5%

10.7%

Cash resources were distributed among the first

group of states as follows: Campeche

$130,000,000, Tabasco $87,874,455, Chiapas

$60,400,000 and Veracruz $36,725,000.

In order to comply with its commitment to other

states, Petróleos Mexicanos granted 44,591,628

pesos to Jalisco, Baja California Sur, Sinaloa and

Mexico City.

Distribution of donations 2001 (%)

It delivered 135,960 tons of asphalt, 20 million

liters of fuel, 139,751 meters of tubing, in addition

to 3,142,954 pesos worth of other goods such as

office furniture and transportation equipment. The

largest quantities corresponded to asphalt (62%)

and fuels (31.7%).

Petróleos Mexicanos grants economic resources

to state and municipal governments to advocate

sustainable development and to promote the

creation of social development actions that

harmonize PEMEX’s operation and growth with

its surroundings.

During 2001, the company granted approximately

682 million pesos, 57.9% of it in cash and 42.1%

in kind (asphalt, fuels, piping, furniture and

equipment).

Contributions and donations distribution 2001 (%)

Total $681,751,395

79.8% of the contribution (315 million pesos) was

assigned to Campeche, Chiapas, Tabasco and

Veracruz, where PEMEX and its subsidiaries have

the highest operating presence. The states of

Guanajuato, Hidalgo, Nuevo León, Oaxaca and

Tamaulipas —where five PEMEX refineries are

located— received 9.5% (37.4 million pesos), and

the rest was distributed among other states.

RESPONSIBISOCIAL


10

20

30

40

50

60

70


Authorized donations per type (%)

By the end of 2001, Petróleos Mexicanos’s

countrywide social coverage —albeit in different

magnitude and importance— reached 28 states.

Asph

alt

Fuel

Tubi

ng

Othe

rs

62.2%

31.7%

5.0%1.1%

Specific projectsWhile developing coordination and approaching

efforts with communities and the different

government levels to apply these resources,

transparency and accountability have been the

main principles for granting contributions and

donations. This has enabled PEMEX to promote

specific programs and projects in the following

localities:

ChiapasResources amounting to approximately 8 million

pesos granted to promote production were

applied to different productive projects.

Technical Assistance for cattle raising-A total of 3,229 individuals in five northern

municipalities (Pichucalco, Juárez, Sunuapa,

Ostuacán and Reforma) have been approached,

exceeding the proposed goal by 30%.

Bovine herd restoration-428 heads of bovine cattle were acquired for

productive projects in the mentioned

municipalities.

Distribution of fertilizers-This project will benefit a total of 3,038 producers

in 4,412 hectares of productive land by increasing

the production of fruit and basic crops.

Contributions and donations authorized by theBoard of Directors, 2001

Item Amount %(Thousands of $)

Contributions (Cash) 394,975.1 57.9

Donations (Kind) 286,776.3 42.1Asphalt (Tons) 178,296.7 62.2Fuel (l) 90,949.1 31.7Tubing (m) 14,387.5 5.0Others (units) 3,142.9 1.1

TOTAL 681,751.4 100

LITY

32 PETRÓLEOS MEXICANOS32 PETRÓLEOS MEXICANOS

CASE: SOCIAL DEVELOPMENT INDICATORS

The oil industry’s presence in different regions of the country has several effects, which should overallimprove the welfare of the people. This is one of the three dimensions of sustainable development.

In order to obtain an objective diagnosis to improve the efficiency of PEMEX’s support programs for itsneighboring communities, in 2001 the company started integrating a series of indicators to quantify andevaluate its impact on localities in different social issues.

In this first stage the 2000 census information from 61 municipalities of paramount importance for thecompany, located in the 9 states with the greatest PEMEX presence —Veracruz, Tabasco Campeche,Chiapas, Oaxaca, Hidalgo, Guanajuato, Tamaulipas and Nuevo León— was processed. The following aresome of the preliminary results:

Health• Thirty-four of the 61 oil municipalities have a coverage that exceeds their state’s average, with afavorable comparative situation.

• The Campeche, Hidalgo, Nuevo León, Oaxaca and Tamaulipas oil municipalities report an averagecoverage that exceeds the country’s average, and the Veracruz municipalities are close to this level.

Education• The educational attainment of 93% of the oil municipalities is higher than their respective states’averages. However, not all the oil entities have accomplished this advance.

• Literacy in 34 of the 61 examined municipalities (56%) is higher than the country’s average.

• The Campeche, Tamaulipas, Nuevo León and Veracruz oil municipalities’ average educational attainmentis higher than the country’s and state’s average.

TamaulipasThis state received a substantial amount of asphalt

to refurbish approximately 512 km. of its highways.

CampechePEMEX signed an agreement with the state’s

government to deliver 10 thousand meters of steel

tubing of different diameters, which will be used

to improve the drainage system in Ciudad del

Carmen. This will contribute to solve the

problems caused by flooded streets during the

rain season.

SAFETY, HEALTH AND ENVIRONMENT, 2001 33SAFETY, HEALTH AND ENVIRONMENT, 2001 33

TabascoEnvironmental protection actions —particularly in

the Centla Swamps area— continued during 2001.

Guanajuato• The Patronato para el Monitoreo de la Calidad

del Aire de Salamanca, A.C. (Salamanca Air

Monitoring Board of Trustees) received 1.3 million

pesos to install an air-monitoring network in this

city. This project will help the community to

improve the city’s air quality and to evaluate

pollution in different areas.

• Petróleos Mexicanos gave 534 thousand pesos

to the Mexican Red Cross in León, to acquire an

X-ray equipment, an anesthesia outfit and a

surgical stand to treat emergencies and provide

basic medical care.

• The Asociación Ciudad de los Niños Salaman-

ca, A.C. (City of Children Association) received

7 million pesos to build a housing project for street

children older than 15 years.

HidalgoThe state’s Sistema para el Desarrollo Integral de

la Familia (Integral Family Development System)

received 400 thousand pesos to buy equipment

for the Integral Rehabilitation Center’s Physical

Therapy and Evaluation and Development of

Work Capacities areas.

Dwelling qualityTwo basic indicators of the quality of dwelling are the access to piped water supply and drained sewageservices.

• The Campeche, Hidalgo, Oaxaca and Tabasco oil municipalities’ average percentage of dwellings withpiped water supply is higher than the country’s average, and than the average of all the oil entities .

• The Campeche, Guanajuato, Hidalgo, Nuevo León and Tamaulipas oil municipalities have a greateraverage percentage of dwellings with drained sewage.

• These results show that the municipalities with the greatest PEMEX presence have a favorablecomparative situation, but they also indicate that the basic social infrastructure needs further strengthening.

Employment• The economically active population indicator is one of the factors used to identify the percentage ofthe labor force participating in productive activities. The Campeche and Nuevo León oil municipalitiesobtained the highest indexes, which places them at the same level as the country’s average.

• These results emphasize the need to promote job generation programs. Support to different productiveprojects is a real alternative toward social welfare.


AREASSENSITIVE

• Building of the Uyotot-já (House of the Water)

Interpretation Center, which comprises a fire

prevention watchtower, a multiple-use hut and

three exhibition chambers, one of which displays

the compatibility between oil activities, the

environment and the Reserve’s communities.

• Acquisition of land and river transportation

equipment, radio communication equipment

and furniture.

• Hiring of personnel to develop environmental

projects.

• Promotion of sustainable economic activities:

training courses on ecotourism, a soft-shell crab

processing plant and a fish processing

cooperative were built. A tilapia production

pilot project is underway and the pejelagarto

production project is being developed.

Collaboration with the Protected Areas’

authorities has enabled PEMEX to devise work

practices to prevent damage to the sensitive areas

where it operates, such as the Workshop for the

evaluation of oil activities in the Centla Swamps,

which took place in the Ciudad Pemex Gas

Processing Center in August 2001.

PEMEX contributes to the country’s sustainable

development; it strives to perform its activities

with respect for the environment and helping its

neighboring communities. It contributes to pre-

serve the Protected Areas where it operates.

Centla SwampsThe Centla Swamps in Chiapas and the Términos

Lagoon in Campeche are catalogued as one of

the world’s largest wetland territories. Since 2000,

PEMEX contributes in several projects to promote

a culture of resource utilization and conservation.

PEMEX has provided funds for the management

of Protected Natural Areas through the non-

governmental organization Espacios Naturales y

Desarrollo Sustentable A. C. (ENDESU). The

following advances have been achieved:


Moreover, with the assistance of the Universidad

Juárez Autónoma de Tabasco, there have been

advances on the Centla Swamps environmental

diagnosis, which will provide information on the

environmental impact of the diverse activities

(cattle raising, fishing, forestry, tourism and oil

activities) that are performed in this important area.

Términos Lagoon, Campeche.Desilting activities were started at the channels of

the El Zapote and El Boquerón lagoons, affected

by the Roxanne and Opal hurricanes. As part of

the restoration activities, the area’s landowners

were trained to reforest with mangrove trees.

The rural radio environmental education project

has carried out workshops and interviews in

Sabancuy, Atasta, Nuevo Campechito and Ribera

de San Francisco communities. Moreover, edito-

rial efforts to promote the region’s culture and

history are being promoted.

CASE: CHAPULTEPEC ZOO

PEMEX is one of the corporate sponsors of Mexico City’s Chapultepec Zoo in its efforts to preserveanimal species. Approximately five million people visit this site every year.

A portion of the resources was used to install plates containing information on the zoo’s species. Thezoo can be considered as a living environmental education classroom.

Information on the species sponsored by PEMEX can be found at www.pemex.com, Lo nuevo en PE-MEX, PEMEX a favor de la fauna.


SAFETY AND ENVIRONMENTAL PROTECTION EXPENDITURE

Pemex has a system to quantify direct and indirect

costs of activities related to industrial safety,

environmental protection and clean products

(SECP). This system uses factors from project

catalogs, departments and concepts of origin based

on similar systems developed by API and ARPEL.

At the beginning of each year’s budgeting process,

these factors are reviewed and assigned to new

catalogs. Subsequently, expenditures per item and

per cost center are followed up on a monthly basis

throughout the year in order to avoid

mismanagement and to help decision-making in

these essential activities.

According to this system, Petróleos Mexicanos

spent 18,291 million pesos on safety,

environmental protection and clean products

during 2001; 19.4% of the year’s total expenses

—56% was spent on industrial safety, 43% on

environmental protection and 1% on clean

products. This expenditure rose 6% from 2000.

SECP expenditure (millions of pesos)

O P E R A T I O N I N V E S T M E N TIndustrial Environmental Clean Industrial Environmental Clean

safety protection products Total safety protection products Total

PEP 2,187 1,052 0 3,238 3,794 3,887 0 7,681

PR 1,847 867 0 2,714 939 534 24 1,497

PGPB 214 117 99 430 132 723 175 1,031

PPQ 575 387 20 982 72 56 1 129

CORPORATIVO 409 176 0 585 4 1 0 5

Total 5,232 2,598 119 7,949 4,942 5,200 201 10,343

PEP

PR

PGPB

PPQ

CORPORATIVO

EXPENDIT


URE

8.0%

3,2%

59.7%

6.1%

23.0%

SECP expenditureTotal: 18,291 (millions of pesos)


The Integrated Management System for Safety and

Environmental Protection (SIASPA) is being

implemented at PR (104 facilities), PEP (42) and

PPQ (8), with the following advances during 2001:

• These facilities have complied with virtually all

the Level 2 requirements and are working on the

next level, with an 87% advance in improvement

programs. In addition, in order to consolidate

Level 3, subsidiaries have continued performing

regular self-assessments to verify their compliance

with SIASPA.

MANAGEMENT SYSTEMS

• After the SIASPA pilot test performed at the

Minatitlán Hospital, 23 Medical Service units have

started implementing the process, with advances

of 53% and 5% in Levels 2 and 3.

Audits and follow-up on the implementation of

SIASPA were carried out in the Salina Cruz Marine

Terminal to verify the loading process and the

equipment and safety system’s condition, and in

the Cadereyta Refinery and the Cantarell Asset’s

Akal C y Nohoch A Production Complexes to

inspect new or remodeling works at their

operating areas.

The Emergency Response Plans of 20 facilities

were audited with the purpose of verifying their

structure and operating conditions.

The SIASPA 2001 Symposium took place in

Mexico City on November 28 through 30th 2001.

Authorities from Petróleos Mexicanos, STPRM and

SEMARNAT, officials from invited companies and

approximately 600 individuals participated in this

symposium.

The event comprised 13 dissertations and 28

essays to share experiences obtained during the

implementation of SIASPA.

SYSTEMSMANAGEMENT


During the Symposium, PEMEX’s Director Ge-

neral presented the SIASPA 2001Safety and

Environmental Protection Acknowledgements to

the following individuals, facilities and contractors

for their outstanding leadership and performance:

Pemex Exploración y Producción• KU-H offshore platform at the Marine Northeast

Region

• Paredón separation battery at the South Region

• Arturo Soto Cuervo

• Gilberto Gómez Escamilla

Pemex Refinación• Magdalena, Sonora Storage and Distribution

Terminal

• Madero, Tamaulipas Pipeline Sector

• Francisco J. Nieto Azuara

• Jesús A. Salinas Leyva

Pemex Petroquímica• Escolín Petrochemical Center

• Cangrejera Petrochemical Center

• Eugenio Espinoza Mora

• Martha Gallardo

Pemex Gas y Petroquímica Básica• Cactus GPC

• La Venta GPC

• Arturo Gómez Bernal

• Alfonso Aguilar Decuir

ICA-Fluor Daniel was awarded a special mention.

PGPB promoted the implementation of the Safety,

Health and Environmental Protection Program

(PROSSPA) in its different business lines during

2001:

• Production reported advances in the Level 3

(nearly 100%) and Level 4 (approximately 85%)

Safety, Health and Environmental Protection and

Occupational Health areas.

• Pipelines completed almost all of the Level 4

requirements and reported a 80% advance in the

Level 5 Safety, Health and Environmental

Protection and Safety Management activities.

• Liquid Gas and Basic Petrochemicals completed

Level 3; it posted a 50% advance in the Safety,

Health and Environmental Protection and Safety

Management Level 4 requirements and 43%

and 90% advances in the Occupational Health

and Environmental Management Level 5

requirements.

A culture of compliance is being promoted so

recommendations are responsibly executed,

supported by a clear leadership and an effective

follow-up system that ensures their compliance.

The SSPA/UPtime® program was launched in July

to implement practical measures described in Ex-

celencia en UPtime®, Clase Mundial, by following

the Continuous Improvement Process.


In coordination with reinsurance companies, 47

preliminary inspections to the subsidiaries’ facilities

(20 from PEP, 18 from PR, eight from PGPB and

one from PPQ) and 11 reinsurance inspections

(three from PEP, four from PR, three from PPQ

and one from PGPB) were performed.

According to recommendations made by

Hydrocarbon Risk Consultants , Ltd., the

preventive measures to improve the Atasta GPC’s

Venting System were followed up to obtain a

better grade from reinsurance companies.

REINSURANCE

In order to help facilities with lower-than-average

reinsurance grades, technical inspections were

made to 15 facilities (nine from PEP, three from

PR, one from PPQ and two from PGPB), to

establish actions aimed at obtaining a better rating

in the 2002 inspections.

REINSURANCE


2002PLANS FOR

2001 2002Sox emissions (tons/thousand tons of throughput)

PEP 0.71 0.69

PGPB 2.15 1.29

CO2 emissions (tons/thousand tons of throughput)

PEP 70 48.41

PR 215 212

Produced water re-injection (% of produced water)

PEP 95 96

O&G discharges (kg/thousand tons of throughput)

PEP 0.43 0.23

PR 15 10

TSS discharges (kg/thousand tons of throughput)

PR 19.56 18.20

PGPB 5.50 4.81

PPQ 233.13 124.69

Hazardous waste inventory (tons)

PPQ 6,000 5,475

G o a l s

PR

PEP

PGPB

PEP

PEP

PR

PEP

PR

PPQ

PGPB

PPQ

Emissions to air and greenhouse gasesPEP’s drop in air emissions is based on an

improved utilization of gas extracted from fields

by increasing the offshore platforms’ g as

compression capacity and reducing the quantity

of flared gas. This will occur mainly at the Cantarell

Asset where, each year, an estimated 133 thousand

tons of SOx and 9.4 million tons of CO2 will not

be released into the air.

With PGPB’s investment in new Super Claus sulfur

recovery and re-conversion plants, SO2 emissions

are expected to fall within the range established

by the United States’ EPA (30-51 kg of SO2 per

ton of processed sulfur).

Discharges to waterPEP plans to increase the proportion of re-injected

produced water to 96% by 2002.

PR will obtain significant benefits from the start-

up of the refineries’ wastewater treatment plants,

which will diminish its water discharges by 121,960

m3/day.

Hazardous wastesPEP and PGPB plan to eliminate all hazardous

wastes from its inventory; PR plans to dispose of

90 tons of PCBs considered as hazardous waste

and 15 tons of PCB-polluted dielectric oil from

operating equipment; PPQ plans to eliminate 9.5

tons of PCBs.


E m i s s i o n s t o a i r

TotalSOx NOx TSP TOC VOC emissions

PEMEX 687,690 86,823 82,832 102,381 83,086 959,726

PEP 153,765 43,809 1,657 52,016 39,295 251,247

RN 12,269 8,343 1,014 15,389 9,422 37,014

RS 13,996 12,209 184 34,761 29,706 61,150

RMNE 104,901 11,747 212 958 42 117,818

RMSO 20,711 5,405 88 689 125 26,894

UPMP 1,888 6,106 158 220 - 8,371

PR 376,483 25,193 19,937 38,800 36,764 460,413

Refineries 375,553 23,967 19,893 27,733 25,832 447,146

Commercial 3 12 1 1,990 1,975 2,007

Distribution 926 1,214 43 9,077 8,957 11,260

PGPB 156,763 9,647 38,889 5,386 3,233 210,685

GPCs 156,736 8,984 38,872 4,764 3,223 209,356

Terminals 27 17 1 64 - 110

Pipelines - 645 15 558 10 1,219

PPQ 679 8,174 22,349 6,178 3,795 37,381

MORELOS 9 1,642 14,985 2,037 1,863 18,674

CANGREJERA 18 2,849 883 2,134 1,075 5,883

COSOLEACAQUE 53 1,116 147 98 29 1,414

PAJARITOS 4 940 2,078 123 85 3,146

TULA 1 24 661 53 22 739

ESCOLIN 1 576 1,389 914 428 2,879

CAMARGO - 607 1,203 299 24 2,110

INDEPENDENCIA 593 420 1,004 520 268 2,537

D i s c h a r g e s t o w a t e r

TotalO&G TSS NTot Others discharges

913 2,445 813 55 4,226

53 260 5 - 318

10 10 4 - 24

1 4 - - 5

21 106 1 - 128

17 115 - - 132

4 25 - - 29

651 1,274 689 44 2,658

634 1,162 686 43 2,525

1 2 - - 3

17 110 2 1 130

53 220 112 7 393

50 219 109 7 385

- - - - 1

3 1 3 - 7

156 691 7 3 857

37 349 - - 386

75 183 - - 258

14 33 - - 47

11 74 1 - 86

- 1 - - 2

15 44 2 3 64

- - 1 - 1

3 7 4 1 15

STATISTICAL APPENDIX(See methodology note 4, page v)

2001, SISPATons

PR

PEP

PGPB

PPQ


Hazardous waste Hydrocarbon spills Total emissions and discharges Greenhousegeneration and leaks and production gases

Total PEP, PGPB, PPQ PEP, PGPB, PPQ spilled and Total production emissions per product CO2 emissions

Total Total leaked emissions and and crude oil and crude oil (millionsgeneration quantity hydrocarbons discharges process (PR) process unit (%) of tons)

278,523 1,249 8,031 1,250,507 320,399,018 0.390 40.05

Production(crude oil and gas)

217,758 1,169 2,071 471,395 204,841,214 0.230 13.26

9,767 974 456 47,261 14,203,486 0.333 1.70

504 139 790 62,450 45,599,952 0.137 3.59

1,078 28 69 119,094 104,967,831 0.113 6.09

5,247 1 369 32,641 40,069,945 0.081 1.57

201,161 27 387 209,948 0.30

Crude oilprocess

40,277 73 5,900 509,249 64,627,529 0.788 13.69

38,377 1 - 488,048 64,627,529 0.755 13.07

820 2 2 2,833 -

1,080 70 5,898 18,368 0.63

Production

1,219 7 59 212,356 45,362,075 0.468 6.41

1,140 1 10 210,892 45,362,075 0.465 6.21

15 - - 125 0.01

64 6 49 1,338 0.20

Production(petrochemicals)

19,269 - - 57,508 5,568,200 1.033 6.68

4,546 - - 23,606 1,426,235 1.655 1.59

3,028 - - 9,169 2,391,166 0.383 2.72

85 - - 1,546 666,027 0.232 1.33

10,381 - - 13,613 699,468 1.946 0.41

43 - - 783 31,557 2.482 0.04

1,104 - - 4,048 112,375 3.602 0.29

25 - - 2,135 41,113 5.194 0.11

57 - - 2,609 200,261 1.303 0.20


E n e r g y c o n s u m p t i o n a n d p r o d u c t i o n

Total energy Total energy Hydrocarbon Total energy Total energyconsumption consumption production consumption consumption(MMBCOE) (Includes flaring and (MMBCOE) per product unit per product unit

venting) (MMBCOE) (%) (Includes flaring and venting)(%)

118.3 166.7

31.6 75.8 2,200 1.44 3.44

6.0 10.2 151 3.96 6.72

9.6 17.0 485 1.99 3.50

10.4 39.6 1,213 0.86 3.26

4.7 8.2 352 1.34 2.33

0.9 0.9 - - -

44.7 48.5 477 9.38 10.17

41.1 44.9 477 8.63 9.42

0.1 0.1 -

3.4 3.4 -

19.0 19.4 468 4.06 4.15

18.1 18.4 468 3.85 3.93

0.1 0.1 -

0.9 0.9 -

Mton BCOE/ton

23.0 23.1 5,568 4.12

5.4 5.5 1,426 3.80

10.9 10.9 2,391 4.56

2.6 2.6 666 3.94

1.7 1.7 699 2.42

0.2 0.2 32 5.44

1.2 1.2 112 10.37

0.3 0.3 41 7.02

0.7 0.7 200 3.42


W a t e r h a n d l i n g

Input Consumption Discharge Input per product unit(m3) (m3) (m3) (m3/ton)

270,222,824 160,840,004 91,715,313 0.84

37,007,987 26,022,256 2,622,704 0.18

14,556,255 5,269,165 181,082 1.02

5,060,402 4,808,338 195,165 0.11

1,078,995 - 1,072,538 0.01

15,763,257 15,537,801 1,046,558 0.39

549,078 406,953 127,360

132,392,397 73,247,558 53,067,029 2.05

129,296,992 72,387,121 50,512,213 2.00

1,018,249 817,202 273,416

2,077,156 43,236 2,281,399

40,389,511 23,251,086 14,350,154 0.89

39,974,400 22,964,166 14,226,264 0.88

300,215 264,041 32,377

114,896 22,878 91,514

60,432,928 38,319,104 21,675,427 10.85

19,380,010 12,329,480 6,560,159 13.59

20,314,383 11,456,343 8,867,883 8.50

9,156,357 6,872,816 2,283,541 13.75

5,426,180 4,035,901 1,351,858 7.76

791,460 703,377 88,083 25.08

2,170,119 268,829 1,981,842 19.31

757,730 733,171 24,559 18.43

2,436,689 1,919,187 517,502 12.17

P r o d u c e d w a t e r

Produced Re-injected Discharged Transferred Re-injection(m3) (m3) (m3) (m3) %

12,278,133 10,496,841 1,781,171 336,358 87.9

4,849,047 4,708,630 140,417 - 97.1

5,302,750 4,987,774 314,975 336,358 100

- - - -

2,126,114 800,438 1,325,677 - 37.6

222 - 102 -


To the Board of Directors of PetroleosMexicanos (PEMEX)

In accordance with your instructions we have

reviewed PEMEX´s 2001 Safety, Health and

Environment (SHE) Report in order to

substantiate its contents. In addition, we have

reviewed the processes by which the data were

collected and consolidated in order to provide an

independent view of the Safety, Occupational

Health and Environmental (SHE) data reported.

The report has been prepared by PEMEX, who

are responsible for the collection and presentation

of information within it. This verification statement

in itself should not be taken as a basis for

interpreting PEMEX´s SHE performance.

ApproachThere are currently no statutory requirements or

generally accepted standards relating to the

preparation, publication and verification of

corporate SHE reports. We have therefore

developed and applied a customised verification

process which involved challeng ing and

substantiating the assertions and claims made in

the report and reviewing the processes for the

collection, consolidation, and reporting of SHE

performance data. This is the third year we have

verified PEMEX´s SHE Report and our site visit

programme has been adapted to assess progress

since our first verification programme in 1999.

Basis of our Review -Our review has consisted of the following.

1. We have held discussions with a selection of

PEMEX senior managers and SHE professionals

from corporate, from within each of the four

subsidiaries (Exploration and Production, Gas and

Basic Petrochemicals , Refining and

Petrochemicals) and at each of the sites visited.

2. We have revisited four sites previously audited

in either 1999 or 2000, to assess progress made

in the collection and reporting of SHE data. These

sites were, for Pemex Exploration & Production:

Poza Rica Drilling Asset (Veracruz), Cantarell

‘Akal-C’ Asset (Campeche) and the North East

Marine Drilling Asset (Campeche) and for Pemex

Refining: Madero Marine Terminal (Tamaulipas).

3. Ten further site visits were undertaken to review

the site based processes for collecting and

consolidating SHE performance data and to

systematically test the accuracy of selected data

reported to PEMEX Corporate. The sites visited

were:

• For Pemex Exploration and Production: Samaria-

Sitio Grande Asset (Tabasco).

• For Pemex Refining: Cadereyta Refinery (Nue-

vo Leon), Salina Cruz Refinery (Oaxaca), Santa

Catarina Storage Terminal (Monterrey) and Ma-

dero Pipeline Region (Tamaulipas).

• For Pemex Gas: Matapionche Processing Cen-

tre (Veracruz), Cd. Pemex Processing Centre

(Tabasco), and the Mendoza Pipeline Region

(Veracruz).

• For Pemex Petrochemicals: Petroquimica Escolin

(Veracruz), and Petroquimica Inpendendencia

(Puebla).

4. We have tested the processes and procedures

for consolidating SHE performance data at the re-

gional functions where appropriate, at each of the

four subsidiaries and at corporate.

5. We have assessed all written statements

included within this report and reviewed the data

to support claims on SHE performance.

ObservationsOur observations with regard to the PEMEX SHE

data are as follows:

Environmental data• Across the majority of sites visited the scope of

data reported and collection methods used were

systematic and largely consistent with the

corporate environmental data reporting

guidelines.

• During 2001, PEMEX implemented a new group

wide electronic system for the capture of

environmental performance data at all sites. The

system has significantly improved the transparency

and completeness of sources covered within the

information reported, provided greater clarity and

consistency on the reporting methodologies

applied and has formalised the processes for data

validation. At all sites visited training had been

provided on the implementation and application

of the new data capture system.


• At the majority of sites the application of the

electronic data capture system commenced in July

2001. The data for the period prior to July 2001

was entered into the system based on historical

site records.

• Many of the gaps observed in the reporting of

2000 environmental performance data have been

addressed through the implementation of the

group wide electronic data capture system. We

observed that some gaps remain in the data

reported and as a result PEMEX has clearly stated

in the report where gaps or uncertainty in the data

exist.

• Whilst we have observed robust processes for

consolidating environmental performance data at

a subsidiary and corporate level , we have

observed variations in the level of review and

validation of environmental data at a site level prior

to the data being reported.

• We saw evidence that in 2001 PEMEX initiated

an internal carbon dioxide emissions trading

market that covered the assets with the most

significant carbon dioxide emissions.

Safety Performance Data• At all sites visited processes were in place for

reporting safety performance data on a monthly

basis.

• Systems are in place for reporting work related

accidents that result in lost time. However, we

saw evidence across the sites visited of variations

in the interpretation of the corporate definition

of a work related accident and therefore believe

there is insufficient assurance that the reporting

systems capture every accident resulting in

absence from work.

• We observed variations across the sites visited

in the application of corporate guidance on the

reporting of work related accidents that result in

lost time of three days or less. Therefore there is

insufficient assurance that the reporting systems

capture every lost time accident of three days or

less.

• There continues to be limited validation of

contractor safety performance data. We are

therefore unable to comment on the accuracy of

contractor safety performance data reported.

• We have observed robust processes for

consolidating safety performance data at a

subsidiary and corporate level.

Occupational Health• The description of Occupational health

programmes and activities provided in this report

are consistent with the evidence obtained.

ConclusionsOn the basis of our review, we conclude that the

information reported in the 2001 Safety, Health

and Environment Report is consistent with the

evidence obtained. We have found no statements

in the report that we have been unable to

substantiate either through our site visit

observations or the documentation presented.

Opportunities for improvementOur conclusions and recommendations have been

presented to each of the sites visited and in a

detailed management report to PEMEX

Corporate. We summarise the key points below:

• Whilst the guidance supporting the

environmental data capture system sets out clear

expectations for the validation of data, there is a

need to ensure this guidance is understood and

implemented and that senior site staff take

ownership of the data reported.

• Further guidance and training is required to

ensure that a consistent definition of work related

accidents are applied at a site level to improve

internal assurance that all work related injuries

resulting in lost work time are reported.

• Consideration should be given to withdrawing

the corporate guidance on reporting lost time

accidents of three days or less to improve internal

assurance that all lost time due to work place

accidents is reported.

RPemex should consider extending the scope of

routine internal audits to encompass the review

and validation of SHE data.

Mancera S.C, Ernst & Young

2nd April 2002


The United Nations Development Program

(UNDP) recognizes Petróleos Mexicanos’s effort

presented in this third annual report on safety,

health and environment. This report is clearly an

important initiative to evaluate the environmental

and social effect of PEMEX’s diverse operations

in the Mexican Republic and the corporate

advance toward transparency and dialogue with

society on the varied impacts of its operations.

It is worth mentioning that the UNDP, given

PEMEX’s importance for the country’s

development and the environment, has been

involved in promoting some of the projects

mentioned in this report. In 1999, in a joint effort

with PEMEX and the former SEMARNAP, we

arranged an internal workshop —directed to all

areas involved in climate change and CO2

emissions reduction issues— for the use of market

mechanisms and in preparation for the

implementation of clean development

mechanisms. Last year, this endeavor led PEMEX

to formally organize the groundwork for the

operation of an internal carbon emissions market

among the company’s productive units.

Based on these experiences on cost-efficient

reductions, PEMEX will announce a CO2

reduction plan for the 2002-2010 period.

The 2001 report proposes an action strategy for

2002 with indicators for quantitative goals. This

plan establishes a very important commitment

with the Mexican society to follow up on its

compliance and to account for PEMEX’s

environmental performance advances.

Most of PEMEX’s advance on its emissions to air

and discharges to water reduction goals present a

positive trend. However, it is clear that the

different areas’ achievements are still extremely

variable and a continuous work is required to

achieve integral compliance with environmental

goals.

Finally, it is worth mentioning that PEMEX’s

decision to periodically and transparently analyze,

monitor and evaluate the impact of its operations

opens new possibilities in the Mexican society to

guarantee that its activities promote local and

national sustainable development in the best

possible manner.

April 25, 2002

CLEMENCIA MUÑOZ-TAMAYO

Resident Representative a.i.

United Nations Development Program

Siv

GLOSSARY

Ammonia. Pure or compressed NH3 gas.

Carbon dioxide (CO2). A greenhouse gas that is produced by theoxidation of compounds containing carbon.

Diabatic distillation. A process that consists of heat transfers within thedistillation tower in order to reduce energy degradation and to diminish theenvironmental impact of the process.

Drilling cuttings. Land and rock removed during exploration orproduction well drilling activities. The cuttings are impregnated with oil dueto contact with drilling muds.

Drilling mud. A mixture of clays, water and chemicals used in drillingoperations to lubricate and cool the bit, to bring drilling cuttings to the surface,prevent the collapse of well walls and to control the upward flow of crudeoil or gas.

Frequency index. The number of disabling accidents that occur per millionman-hours with exposure to risk, worked in a given period.

Fugitive emissions. Emissions that escape from a supposedly closedsystem. VOC emissions are typically considered when reference is made tofugitive emissions.

Greenhouse gases (GHG). Gases that contribute to the formation ofan insulating layer around the world. The principal GHG are steam, carbondioxide, nitrogen oxide and halogenated hydrocarbons.

Heavy chlorinated hydrocarbons. Chains of hydrocarbons in which avaried number of hydrogen atoms have been substituted by chloride atoms.The heavy chlorinated hydrocarbons are those whose chains contain fromfour to six chloride atoms, these last ones being known as hexachlorinatedcompounds.

Heavy metals. Metals that may produce negative effects on human, floraor fauna health in concentrations above certain limits. The Official MexicanStandard only covers the following: arsenic, cadmium, copper, chrome,mercury, nickel, lead, zinc and cyanides.

Hexachlorinated wastes. See heavy chlorinated hydrocarbons.

Hydrodesulfurization. A process to remove sulfur molecules by usingpressurized hydrogen and a catalyst.

ISO 14001. International Standardization Organization standard referringto environmental management systems

Methane (CH4). Considered as a greenhouse gas. By convention, it is notincluded among the volatile organic compounds (VOC) gases.

Methyltertbutylether (MTBE). Colorless liquid ether that contains18.2% oxygen, slightly soluble in water, can be mixed with any type of gasoline.It is used to rise the level of octane in gasolines. One of its advantages is thatit reduces hydrocarbon and carbon monoxide emissions, although it slightlyrises the NOx content of combustion gases.

Nitrogen oxides (NOx). A generic term for nitrogen oxide gases. Thesecompounds are generated due to the oxidation of the nitrogen in the airduring combustion processes. They contribute to the formation oftroposhperic ozone and acid rain.

Oils and greases (O&G). Any material that may be recovered as a solu-ble substance in the following solvents: n-hexane, trichloro-trifluor ethaneor a mixture of 80% n-hexane and 20% methylterbutylether.

Oily sludges. Solid wastes with a hydrocarbon content like: solids associatedwith crude oil, soils impregnated with hydrocarbons, hydrocarbon containersystem sediments (tanks, wells, pits, etc.).

Ozone. A very reactive form of allotropic oxygen that is naturally presentin the atmosphere in small amounts. In the stratosphere, ozone acts as afilter for ultraviolet radiation, but hallons and chlorofluorocarbons destroyit. At a ground level, it is produced by the reaction between VOC and NOx;it is an irritant and it may cause respiratory difficulties.

PM10 and PM2.5 particles. These are atmospheric pollution componentsproduced by the use of fuels in transportation and the industry, among othersources. They are classified according to their diameter in microns (forexample: PM10 = 10 microns). The particles with a smaller diameter tend tobe more harmful for human health since they may penetrate more deeplyinto the respiratory system.

Polychlorinated biphenyls (PCBs). Chlorinated hydrocarbons. Thesecompounds are formed by a system of benzene rings in which a variednumber of hydrogen atoms have been substituted by chloride atoms. PCB’sare decreasingly being used as oils in electric power transformers, thesecompounds are toxic and very stable and therefore persistent in nature, andtheir destruction or degradation is very difficult. One of the few ways toeliminate these compounds is by controlled incineration at high temperatures.

Produced water. Water contained in natural conditions in some fields. Itis associated with the crude oil produced.

Refinery energy intensity index. A measure of the energy efficiencyin refineries equal to the actual consumption of fuel, divided by theinternational benchmark theoretical consumption and taking into accountthe configuration and utilization of the refinery

Severity index. The number of working days lost due to disabling accidentsper million man-hours with exposure to risk worked in a given period.

Sour gas. Natural gas with a sulfhydric acid content that requires treatmentfor utilization as a fuel.

Sulfur oxides (SOx). Compounds generated by the combustion of fuelsthat contain sulfur in their composition. They contribute to the formation ofacid rain.

Sulfurs. Sulfur compounds present in wastewater.

Total organic compounds (TOC). They represent the sum ofevaporative emissions from tanks, cooling towers, API separators, valves,flanges, connectors and seals.

Total suspended particles (TSP). The term used to designate particlematter in the air..

Total suspended solids (TSS). Particles present in wastewater, withheldin a micro-glass fiber filtering medium, with a pore diameter of 1.5 micronsor the equivalent.

Volatile organic compounds (VOC). Organic compounds thatevaporate at room temperature, including various hydrocarbons, oxygenatedcompounds and compounds with a sulfur content. Methane (CH

4) is

conventionally considered separately. VOCs contribute to the formation oftropospheric ozone through a photochemical reaction with nitrogen oxides(NOx)

A b b r e v i a t i o n s

ARPEL Asociación Regional de Empresas de Petróleo y Gas de AméricaLatina y el Caribe (Regional Association of Latin American and CaribbeanOil Companies)BCOE Barrels of crude oil equivalentCDM Clean Development MechanismCNA Comisión Nacional del Agua (National Commission of Water)CONAE Comisión Nacional de Ahorro de Energía (National Energy SavingComission)GPC Gas processing complexHDS HydrodesulfurizationMCMA Mexico City Metropolitan AreaPEP Pemex Exploración y ProducciónPGPB Pemex Gas y Petroquímica BásicaPPQ Pemex PetroquímicaPQC Petrochemical complexPR Pemex RefinaciónPROFEPA Procuraduría Federal de Protección al Ambiente (FederalEnvironment Protection Attorney)RMNE Northeast Marine RegionRMSO Southwest Marine RegionRN North RegionRS South RegionSEMARNAT Secretaría de Medio Ambiente y Recursos Naturales(Secretary of Environment and Natural Resources)SDT Terminal de Almacenamiento y Distribución (Storage and DistributionTerminal)TRS Transaction Recording SystemUNDP United Nations Development ProgramUPMP Well Drilling and Maintenance UnitUSAID United States Agency for International Development

v

NOTES

Text notes

1. This report does not include the corporate’s, PMI’s nor IMP’s safetyand environment information.

2. Petroleum Intelligence Weekly, December 17, 2001.

3. PR should configure more tanks, valves, flanges and seals into SISPAto reflect the total TOC generated.

4. Includes only hydrocarbon spills; PPQ’s ammonia spill is not in-cluded. The Cosoleacaque Petrochemical Complex reported a 598-ton ammonia spill.

5. The external auditor found no evidence that could lead to a valida-tion of the UPMP Marine Division’s hazardous waste information.However, PEMEX has decided to include these data since they couldpotentially represent a large share of the total emissions and discharges.

6. The external auditor found variations in the quality of the hazard-ous waste inventory support documents in PR’s inspected facilities.

7. The 1999 Report’s CO2 figure did not include emissions from oil

fields and other refining facilities. Estimations were made to includethese sources; this new figure is used as a base line in the InternalCO2 Emissions Exchange Program. The external auditor has not vali-dated this new estimate.

8. The program’s launching was reported in Pemex: Safety, health andenvironment, 1999.

9. Information on energy efficiency originates at a PEMEX Energy Sav-ing Network report not included in SISPA.

10. Savings are calculated by multiplying the quantity of non-consumedfuel by the average price of PEMEX’s export crude oil in 2001 (18.57dlls/bl).

11. Non-emitted CO2 emissions are calculated using the emission fac-

tor for non-consumed fuels.

12. The term “Performed Audits” should be construed as those auditsthat already have a signed collaboration agreement. “Concluded Au-dits” are those that have finished their action plan, which has beenvalidated by the authorities.

13. Based on SISPA, there are only seven Gas Processing Centers.However, other classifications unfold facilities in the Coatzacoalcosarea to reach 10 Centers.

Methodology notes

1. Independent verification

Mancera S.C., Ernst & Young carried out the verification of the infor-mation corresponding to 2001 contained in this report. This was per-formed in close collaboration with the environmental service auditorsat their London office. Verification included visits to 14 facilities — fourof which had been visited in previous years— which were focused bothon the soundness of the information generation, aggregation and trans-mission processes and on the accuracy of such information. It alsoincluded interviews with safety and environmental protection special-ists from the corporate body and the subsidiary organizations.

2. Information integration

SISPA, in which all the work centers’ monthly on-line Industrial Safetyand Environmental Protection reports are generated, was implementedin 2001. Each work center logs its information, which is processed andcollated in a comparable and transparent manner.

3. Information and operating areas included for the firsttime

•The universe of pollution-emitting plants and combustion equipment—as well as the stoichiometric computation according to the composi-tion of venting flows and thermal oxidizers of sulfur recovery plants—was increased.

• New hazardous waste categories were added.

PEP• Air: fugitive emissions from devices such as flanges, valves, etc. (TOC);greater coverage of tank emissions (VOC); emissions from RMSOgas sweetening plants. (SOx); emissions from RMNE combustionequipment (SOx, NOx, TSP, TOC, CO

2)

• Water: input, consumption and discharge; produced water for sec-ondary recovery.

PR• Air: fuel consumption per type and combustion equipment for emis-sions computation instead of the average consumption of all equip-ment. Emissions from combustion equipment at Marine Terminals andCommercial Sub-direction SOx, NOx, TSP, TOC, CO2.

• Energy: Energy consumption at Marine Terminals and CommercialSub-direction.

PGPB:• Air: greater integration of combustion equipment (SOx, NOx, TSP,TOC, CO

2), emissions from venting (SOx, NOx, CO

2), fugitive emis-

sions from cooling towers (TSP, VOC), fugitive emissions from valves,flanges, etc. (TOC).

• Water: O&G, TSS, Ntot, others, input, consumption and discharge.

PPQ:

•Air: emissions from venting (SOx, NO x, CO2), SOx emissions from

its combustion equipment, fugitive emissions from valves, flanges, etc.(TOC), emissions from cooling towers (TSP, VOC).

4. Information scope

Rounding out of figures. For presentation purposes, the rounding outof decimal figures has been respected. Therefore, individual numberspresented may differ from total figures. These differences are statisti-cally negligible.

Air: air emissions are estimates based on emission factors issued byEPA in AP-42, supplement F, of 2000, as well as on the stoichiometriccomputation based on the composition of thermal oxidizer flows atthe sulfur recovery plants and venting. Emissions to air from specialprocesses —such as ammonia and ethylene oxide plants— are esti-mated by engineering calculations based on the plants’ design factors.The following are the air emissions reported by different facilities andprocesses. The CO2 factor for burners in pilot mode was obtained byextrapolating EPA’s factor for external combustion equipment (seethe Emissions to air table).

Water: water discharge figures include all discharges reported to CNAand are based on periodic non-continuous flow and analytical sam-pling. Produced water discharges are included.

Spills: only hydrocarbon spills are reported. The spilled volume is basedon estimates and does not include intermittent leaks in equipmentand pipelines. PR reports spills larger than one barrel occurred out-side of its facilities.

The number of spills includes gas leaks, although they do not affectland.

Frequency and severity indexes: the indexes reported do not includeovertime by non-union personnel.

Emissions to air (reported by different facilities and processes)

Operating Combustion Flaresb Gas Other Equipment with area equipmenta sweetening and plants evaporative

sulfur recovery emissionsd

plantsc

PEP North Region SOx, NOx, TSP, SOx, NOx, TSP, NA NA VOC, TOCTOC, CO2 TOC, CO2

South Region SOx, NOx, TSP, SOx, NOx, TSP, NA NA VOC, TOCTOC, CO2 TOC, CO2

Northeast SOx, NOx, TSP, SOx, NOx, TSP, Gas NA VOC, TOCMarine Region TOC, CO2 TOC CO2 sweetening plant

emissions

not included

Southwest SOx, NOx, TSP, SOx, NOx, TSP, SOx NA VOC, TOCMarine Region TOC, CO2 TOC, CO2

Well Drilling SOx, NOx, TSP, Emissions NA NA Tankand TOC, CO2 from well emissions

Maintenance drilling not includedUnit and

maintenance

flaresnot included

PR Refineries SOx, NOx, TSP, SOx, NOx, TSP, SOx, CO2

SOx, NOx, VOCf

TOC, CO2 TOC, CO2 TSP, TOCe

Distribution SOx, NOx, TSP, NA NA NA VOCf, g, TOCSub-direction TOC, CO2

Pipelines SOx, NOx, TSP, NA NA NA VOCf, g, TOCTOC, CO2

Marine SOx, NOx, TSP, NA NA NA VOCf, g, TOCterminals TOC, CO2

PGPB Gas SOx, NOx, TSP, SOx, NOx, TSP, SOx, CO2

h NA VOC, TOCProcessing TOC, CO2 TOC, CO2

Centers

Terminals SOx, NOx, TSP, SOx, NOx, TSP, NA NA VOC, TOCTOC, CO2 TOC, CO2

Pipelines SOx, NOx, TSP, SOx, NOx, TSP, NA NA TOCTOC, CO2 TOC, CO2

PPQ PQC SOx, NOx, TSP, SOx, NOx, TSP, NA CO2i VOC, TOC

TOC, CO2 TOC, CO2

a. TOC emissions include methane.

b. Standard EPS AP-42 emission factors are used for pilots. Stoichiometric computation based on the flared hydrocarbons’ composition is usedfor flares; however, the flares’ condition could alter results. TOC and TSP emissions correspond exclusively to pilot mode.

c. Stoichiometric computation based on the flared hydrocarbons’ composition is used to estimate emissions from sulfur recovery plants. Flammablegas emissions from thermal oxidizer not included.

d. Includes VOC from tanks, cooling towers and API separators and TOC from fugitive emissions from valves, flanges, connectors and seals. The

PEP, PGPB and PR inventories of these devices is incomplete, refineries have no such report, PPQ’s inventory is complete.

e. Includes catalytic and coking plants.

f. Incomplete information of VOC from refined product tanks due to a lack of some physical-chemical data of certain products in SISPA.

g. VOC from ship loading operations are not included.

h. CO2 associated to sour gas.

i. Includes ammonia and ethylene oxide plants.

PEP

PPQ

PR

PGPB

vi

Direccion Corporativade Seguridad Industrialy Proteccion Ambiental.

Av. Marina Nacional 329Torre Ejecutiva, piso 3511311 Mexico, D.F.Tel. 5531 6262Fax. 5203 6279Website: www.pemex.com

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