Energy Reform in Mexico

Abstract

A historic constitutional energy reform was promulgated in Mexico in December 2013. This is the most significant overhaul of the energy sector in this country in more than half a century: a truly major, better-than-expected reform. This new constitutional framework has great advantages, such as contracting flexibility that allows a wide variety of contracting models (e.g., production sharing, profit sharing, licenses, and service), strengthening of regulatory agencies, and a new identity for the national oil company, among others.

Secondary legislation was also recently promulgated on August 11, 2014. These laws seek the best technical-economic-legal combination in order to maximize benefits for Mexico. On that date, Mexico's president announced ten steps to implement this historic reform. The first one is Round Zero that consists of the State's decision to grant Pemex enough exploratory areas and development fields to be sustainable, maintaining its current production for at least 20 years. The second step is Round One, which is the first actual international bidding round. The first call was announced on December 11, 2014, and Data Rooms were opened on January 15, 2015.

This talk will describe the scope of Mexico's Upstream Reform, the elements included within it, a description of the areas and fields that have been granted to Pemex as a result of Round Zero, and a detailed description of the exploratory areas and development fields that will be included in Round One. Pemex's farm-outs will also be included. The timeline for Round One will also be explained. This includes the publication of term sheets, definition of technical and fiscal terms, as well as the contract model, the availability of data rooms, bidding packages, and the awarding of contracts.

AAPG Datapages/Search and Discovery Article #90219 © 2015 GCAGS, Houston, Texas, September 20-22, 2015