Mexico uses PSCs in first Round One step

Mexico is offering production-sharing contracts to companies incorporated in the country for exploration of 14 shallow-water areas in Round One bidding for oil and gas opportunities (OGJ Online, Nov. 10, 2014).

The law firm Mayer Brown reports PSCs with 3-5-year exploration terms will be awarded “pursuant to economic criteria contained in the bidders’ proposals, based on a weighted formula that includes consideration of the share of operating profits offered to the state and a multiplier of the minimum investment commitment per contract area.”

Companies from outside Mexico may participate in all phases of bidding. The government’s National Hydrocarbons Commission (CNH), however, may execute exploration and production contracts only with commercial entities incorporated in Mexico.

Pemex, the national oil company, is authorized to bid by itself or in association with other operators under the same bidding terms.

The bidding invitation for exploration of the 14 shallow-water areas is the first step in Round One.

The Ministry of Energy’s tentative schedule for subsequent 2015 steps in the round is for bidding invitations in January for shallow-water production, in February for onshore, in March for the Chicontepec basin and unconventional, and in April for deep water.

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