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ENERGYALERT
June 23, 2017
Recent developments in the Oil & Gas industry in Mexico: 1) Publication of prequalified companies for Rounds 2.2 and 2.3;
2) Final version of Bidding Terms and License Contract for Rounds 2.2 and 2.3;
3) Economic terms for Farm outs Ayin-Batsil, Ogarrio and Cardenas – Mora were published by the Ministry of Hacienda
1. Prequalified companies for Rounds 2.2 and 2.3
On June 22, 2017, the Mexican National Hydrocarbons Commission (CNH) announced the prequalified companies for the Rounds 2.2 and 2.3 bidding process.
Round 2.2From 9 interested parties, just one of them did not continue with the prequalification process. In this regard, a total of 13 bidders (8 Operators and 5 financial partners) were prequalified and are organized in 5 Individual Bidders and 4 Consortiums. Please find below the detail of the companies that were prequalified:
Individual Bidder Country of residence
1 Ecopetrol Global Energy, S.L.U Colombia
2 Geo Power Solution, S.A.P.I de C.V. Mexico
3 Gran Tierra México Energy, S. de R.L. de C.V. Canada
4 Iberoamericana de Hidrocarburos, S.A. de C.V. Mexico
5 Perseus Exploración Terrestre, S.A. de C.V. Mexico
Individual Bidders Country of residence
1 Carso Oil and Gas, S.A. de C.V. Mexico
2 DEP PYG, S.A.P.I de C.V. Mexico
3 Ecopetrol Global Energy, S.L.U Colombia
4 Geo Power Solution, S.A.P.I de C.V. Mexico
5 Gran Tierra México Energy, S. de R.L. de C.V. Canada
6 Grupo R Exploración y Producción, S.A. de C.V. Mexico
7 Iberoamericana de Hidrocarburos, S.A. de C.V. Mexico
8 Jaguar Exploración y Producción de Hidrocarburos, S.A.P.I. de C.V. Mexico
9 P&S Oil and Gas, S. de R.L. de C.V. USA
10 Perseus Exploración Terrestre, S.A. de C.V. Mexico
11 PetroBal, S.A.P.I. de C.V. Mexico
12 Tonalli Energía, S.A.P.I. de C.V. Mexico
Round 2.3From 23 interested parties, 4 of them did not continue with the prequalification process. In this regard, a total of 31 bidders (18 Operators and 13 financial partners) were prequalified and are organized in 12 Individual Bidders and 7 Consortiums. Please find below the detail of the companies that were prequalified:
Consortiums* Country of residence
1
Iberoamericana de Hidrocarburos, S.A. de C.V.
MexicoPetroleos Monterrey, S.A.P.I. de C.V.
Servicios PJP4 de México, S.A. de C.V.
2Newpek Exploracion y Extraccion, S.A. de C.V.
Mexico – USAVerdad Exploration Mexico LLC
3Sun God Energia de Mexico, S.A. de C.V.
Canada - MexicoJaguar Exploracion y Produccion de Hidrocarburos, S.A.P.I. de C.V.
4Tecpetrol Internacional S.L.
Spain – MexicoGrupo R Exploracion y Produccion, S.A. de C.V.
*First depicted entities were the parties appointed as the Operators of the Consortium
5Promotora y Operadora de Infraestructura, S.A.B. de C.V.
MexicoConsorcio Petrolero 5M del Golgo S.A.P.I. de C.V.
6
Roma Exploration and Production LLC
USA - Mexico
Tubular Technology, S.A. de C.V.
Gx Geoscience Corporation, S. de R.L. de C.V.
Suministros Marinos e Industriales de Mexico S.A. de C.V.
Golfo Suplemento Latino, S.A. de C.V.
7
Shangdong Kerui Oilfield Service Group Co. Ltd
China - MexicoSicoval MX, S.A. de C.V.
Nuevas Soluciones Energeticas A&P, S.A. de C.V.
*First depicted entities were the parties appointed as the Operators of the Consortium
2. Bidding Terms and License Contract final version of Rounds 2.2 and 2.3
On June 22, 2017, the CNH published the final version of the Bidding Terms and License Contract for Rounds 2.2 and 2.3. Below is a summary of the most important modifications of the aforementioned documents. These documents were published in the CNH’s webpage (http://rondasmexico.gob.mx/).
License Contract for Round 2 Phase 2
• Contractual Areas’ size is presented with three decimals.
• Contractual areas 10 and 11 were excluded from the bidding process upon request of the Ministry of Energy.
• Ministry of Energy required to withdraw the Contractual Areas from the process, since the consulting process for Zoque and Tzotzil communities located in the Cuenca del Sureste was extended. Said request was made in order to preserve the rights and interests of local communities in this zone of the country.
►• CNH confirmed that both blocks shall be part of future Bidding processes.
For both bidding procedures (Rounds 2.2 and 2.3), prequalified bidders will have the alternative to request to the CNH modifications to their bidding structure until June 28, 2017.
Consortiums Country of residence
1
Iberoamericana de Hidrocarburos, S.A. de C.V.
MexicoPetroleos Monterrey, S.A.P.I. de C.V.
Servicios PJP4 de México, S.A. de C.V.
2Newpek Exploracion y Extraccion, S.A. de C.V.
Mexico - USAVerdad Exploration Mexico LLC
3
NG Oil and Gas S.A.P.I. de C.V.
MexicoAINDA Consultores S.A. de C.V.
Petroleos Madere, S.A. de C.V.
4Petrosynergy, S.A. de C.V.
Uruguay - MexicoQuimica Apollo, S.A. de C.V.
License Contract for Round 2 Phase 3
• Contractual Areas’ size is presented with three decimals.
• Contractual Areas nomenclature was modified. In this regard, said blocks may be also identified by a consecutive number from 1 to 14, in order to ease the proposal presentation process.
Bidding Guidelines for Round 2 Phase 2 and 3
CNH approved the following amendments to the dates of the Bidding Calendar:
Previous date
On-site visits to the Contract Area
From April 26 to July 7 2017
3. Economic conditions for Farmouts Ayin-Batsil, Ogarrio and Cardenas – Mora
On June 21, 2017 Mexican Ministry of Finance (SHCP, per its acronym in Spanish) published the minimums and maximums percentages for the applicable variables to the Economic Bid of Ayin – Batsil, Ogarrio and Cardenas – Mora farm outs process. In addition, the SHCP published the variables regarding to the portion in which Pemex Exploracion y Produccion (PEP) and the State will split the cash payments that bidders should pay in case of a tie in the Economic Proposal.
It is important to mention that, contrary to Trion’s farm out process, in this particular case the SHCP established that simply by virtue of offering the Maximum percentage in the bidding proposal, the amount offered by the bidder as a Bonus (cash payment) will automatically have to be paid (as it will become part of the economic proposal), without it being necessary for there to be a tie.
Based on the above, the economic terms published by SCHP for the referred farm out process are the following:
Ayin Batsil Farm Out
Government Participation on the Operating Profit
Contract Area Minimum Maximum
Ayin-Batsil 18.20% 25.00%
Cardenas – Mora / Ogarrio Farmouts
Over Royalty
Contract Area Minimum Maximum
Ogarrio 1.00% 13.00%
Cardenas-Mora 2.00% 13.00%
Furthermore Signing Bonus payments shall be distributed in accordance with the terms below:
Signing Bonus Distribution
Contract Area Applicable percentage
Ayin-Batsil► Pemex: 80%
► State: 20%
Ogarrio
► First USD $59.6 million: Pemex
► Outstanding balance
► Pemex: 80%
► State 20%
Cardenas-Mora
► First USD $69 million: Pemex
► Outstanding balance
► Pemex: 80%
► State 20%
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