Haynes and Boone, LLP
August 25, 2016 - United States of America
Mexico Round Two - Second Public Bid
The Mexican government announced the second bid of Round 2 on August 23, 2016. This will be the seventh upstream bid round in Mexico since passage of the energy reform in mid-2014. The new bid round (named Round 2.2), comprises 12 onshore blocks for exploration in the Burgos and Southeastern Basins, covering collectively 5,006 km2 , with prospective resources of approximately 643.2 million barrels of crude equivalent and an original volume of approximately 93.2 million barrels of crude equivalent.
The National Hydrocarbons Commission (Comisión Nacional de Hidrocarburos) (“CNH”) has so far organized the bid rounds into three main groups, Round 1 (four sub-rounds, Rounds 1.1 through Round 1.4), Pemex Associations (so far only one, “Trion”), and Round 2, so far comprising two sub-rounds (Rounds 2.1 and 2.2). Rounds 1.1 through 1.3 (now completed) covered, respectively, 14 exploration and production blocks in shallow waters, nine production blocks in shallow waters; and 26 onshore production blocks. Rounds 1.4 and 2.1, and Trion (still in process) cover, respectively, 10 blocks in deep waters, 15 exploration blocks in shallow water, and the “Trion” block in deep water within part of Round 1.4.1
CNH awarded production sharing contracts in Rounds 1.1 and 1.2, and license contracts in Round 1.3. CNH will award license contracts awarded in Rounds 1.4 and the Trion round, and production sharing contracts in Rounds 2.1 and 2.2.
General Description of Round 2.2:
On August 23, 2016, the CNH formally announced the second international public bid of Round 2 (Round 2.2) to award 15 license contracts for onshore production of hydrocarbons. The bid rules and the model contract were published on August 20, 2016. This is the second bid covering onshore blocks and is the third time license contracts are used in Mexico. Nine of the 15 blocks are located in the Burgos Basin in northern Tamaulipas and northern Nuevo León, while three are located in the Southeastern Basin in northern Chiapas and Tabasco.
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