For more than 78 years, most of Mexico’s Petroleum Industry was closed to the private sector. This is changing thanks to the new Energy Reform that was approved by the Mexican Congress in 2013.

1. ®
Mexico Energy Reform

2. ®
The retail market is changing
Jan 1, 2017
Free imports of fuel, price control
Free Market
Jan 1, 2016
Other brands allowed
2015 2016 2018
How the Energy Reform Affects the Fuels Market?
Original Time Line
Only PEMEX
2017
Jan 1, 2018
2016 © Afton Chemical Corporation, All Rights Reserved. Not to be copied, shared, or reproduced in any media without the express written permission of Afton Chemical Corporation.

3. ®
The retail market is changing
April 1, 2016
Free imports of fuel, price control
Free Market*
Jan 1, 2016
Other brands allowed
2015
How the Energy Reform Affects the Fuels Market?
Revised Time Line
Jan 1, 2017
* Will open by Regions through 2017 - 2018
Only PEMEX
2016 © Afton Chemical Corporation, All Rights Reserved. Not to be copied, shared, or reproduced in any media without the express written permission of Afton Chemical Corporation.
2016 20182017

4. ®
Fuels Distribution
Confidential and Proprietary - Not be copied, shared, or reproduced in any media without the express permission of Afton Chemical Corporation
BEFORE THE ENERGY REFORM
ENERGY REFORM
SUPPLY CHAIN
STORAGE
PEMEX
TRANSPORTATION
PEMEX
DISTRIBUTION
PEMEX Y PRIVATE
CONSUMERS
PEMEX
SERVICE
STATIONS
INDUSTRIAL
PEMEX & PRIVATE
SUPPLY CHAIN
TRANSPORTATION STORAGE DISTRIBUTION
PRODUCTION
& IMPORTS OF FUELS
PEMEX & PRIVATE
CONSUMERS
INDUSTRIAL
PEMEX SERVICE
STATIONS OR
PRIVATE BRANDS
PRODUCTION &
IMPORTS OF
FUELS
PEMEX
2016 © Afton Chemical Corporation, All Rights Reserved. Not to be copied, shared, or reproduced in any media without the express written permission of Afton Chemical Corporation.

5. ®
A new Norm for fuels: NOM-016-CRE-2016
 Specifies the quality of fuels to be commercialized in Mexico
 In place as of October 28, 2016
 http://dof.gob.mx/nota_detalle.php?codigo=5436878&fecha=12/05/2016
 Afton was the only additive Company that participated in the working
groups that elaborated this norm
Consequences of the Energy Reform
NOM-086 (Old) NOM-016 (New)
Octane: 92 Octane: 91
Cetane: 48 Cetane: 45
NO EtOH >5.8 EtoH outside Metropolitan areas
Sulphur in Diesel <500 Sulphur in Diesel <15
Did not mention additives for Jet A-1 Mentions additives for Jet A-1
Did not consider Tracers Will consider Tracers
2016 © Afton Chemical Corporation, All Rights Reserved. Not to be copied, shared, or reproduced in any media without the express written permission of Afton Chemical Corporation.

6. ®
A new Norm for fuels: NOM-016-CRE-2016 (Cont.)
 All gasoline to be additized
 Gasoline to be additized in Mexico, at the last distribution point before
going to a service station or industrial customer
 The CRE (Comisión Reguladora de Energía) will approve all additives
that go into fuels
 The requirements for gasoline additives are:
Consequences of the Energy Reform
TEST LIMIT
ASTM D-5598 Standard Test Method for
Evaluating Unleaded Automotive
Spark-Ignition Engine Fuel for
Electronic Port Fuel Injector
Fouling Treat rate to
meet EPA Spec
80.165
No more than 5% flow restriction in
any one injector
ASTM D-5500 Standard Test Method for Vehicle
Evaluation of Unleaded
Automotive Spark-Ignition
Engine Fuel for Intake Valve
Deposit Formation
Less than 100 mg of intake valve
deposits on average
2016 © Afton Chemical Corporation, All Rights Reserved. Not to be copied, shared, or reproduced in any media without the express written permission of Afton Chemical Corporation.

7. ®
A new Norm for fuels: NOM-016-CRE-2016 (Cont.)
 The Norm specifies a reference fuel to run the tests. These specs are
described on table 5.1 of the Norm
 This Reference Fuel has its origins from the EPA 65TH Percentile
Reference Fuel
Table 5.1 Reference Gasoline Specification for Additive Testing
in Methods ASTM D5598 and D5500
Gasoline
Sulphur,
mg/kg,
mínimum
Destillation
Temperature at
90% (C), mínimum
Olefines,
% vol.
Minimum
Aromatics,
% vol.
Mínimum
Oxigenates,
% vol.
mínimum
Minimum Deposits
required ASTM D5500
(average mg/ valve)
Regular no
oxigenates 80 170 11.4 31.1 0 290
Regular with
oxigenates 80 170 11.4 31.1
5.8 etanol or
11 MTBE
290
Consequences of the Energy Reform
2016 © Afton Chemical Corporation, All Rights Reserved. Not to be copied, shared, or reproduced in any media without the express written permission of Afton Chemical Corporation.

8. ®
How are Additives Regulated?
 The CRE will review and approve all additives going into a fuel (Does not
cover after market products), including gasoline detergent packages
 Gasoline marketers will have to demonstrate every six months with a
report, that the gasoline additive is being used in the quantities required,
by presenting a balance between the gasoline being produced or
imported and the additive consumption
 The CRE (Comisión Reguladora de Energía) started giving fuels import
permits since April 1, 2016
New Players
 In 2016 there has been a consolidation and formation of service stations
associations
 Some of these Groups have launched their own brands: Oxxo Gas,
Hidrosina, Lagas, Octanfuel, etc.
 Several newspaper reports about international brands interested in
participating in the Mexican fuels market
Consequences of the Energy Reform
2016 © Afton Chemical Corporation, All Rights Reserved. Not to be copied, shared, or reproduced in any media without the express written permission of Afton Chemical Corporation.

9. ®
Six refineries in Mexico
PEMEX currently has 77 Terminals
There are 11,500 service stations in Mexico
Gasoline characteristics:
 46 MM M3/Year
• Premium 9 MM M3/Year
• Magna 37 MM M3/Year
 Regular: 87 octanes (AKI)
 Premium: 91 octanes (AKI)
 Sulfur: 80 ppm
Diesel characteristics:
 Cetane: 45 minimum
 Sulfur: 350 ppm (Will go down to 15 ppm)
Interesting Statistics
2016 © Afton Chemical Corporation, All Rights Reserved. Not to be copied, shared, or reproduced in any media without the express written permission of Afton Chemical Corporation.

10. ®
Thank You
For more information, please contact:
Jesus Bravo
Jesus.bravo@aftonchemical.com
2016 © Afton Chemical Corporation, All Rights Reserved. Not to be copied, shared, or reproduced in any media without the express written permission of Afton Chemical Corporation.