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Call for bids of Trion block will strengthen Pemex

  • Represents the beginning of a new chapter for our company
  • This tender represents a milestone in the history of Pemex and will benefit the national hydrocarbons’ industry and Mexico
Pursuant to the authorization on June 10, 2016, by the Board of Directors of Petróleos Mexicanos to request the Ministry of Energy (SENER) the first migration with a partner for deepwater exploration and extraction assignments, the National Hydrocarbons Commission (CNH) approved today the terms and conditions for the bidding process of the assignments that include the Trion block.
 
Today is a historic day for Pemex.  Trion is a strategic field for the company, the industry, and the country.  The required investments to productively exploit it are close to 11 billion dollars.  These resources will translate into the development of infrastructure and will detonate development in the region.
 
The terms and conditions contain the prequalification criteria for interested companies, the terms for obtaining the license granted by the SENER, and the Joint Operation Agreement (JOA) that our company would sign with the winning partners.  These will be published tomorrow by the National Hydrocarbons Commission (NHC) in the Official Gazette and a window will be opened so that the interested parties can send comments and inquiries regarding the rules, as well as, the technical and financial specifications.
 
The event where the bidding process was announced was attended by the Minister of Energy, Pedro Joaquin Coldwell; the CEO of Pemex, Jose Antonio Gonzalez Anaya; the President of the CNH, Juan Carlos Zepeda; the Undersecretary of Hydrocarbons of the Ministry of Energy, Lourdes Melgar, and the Undersecretary of Income of the Ministry of Finance and Public Credit, Miguel Messmacher.
 
Regarding the Joint Operation Agreement, Gonzalez Anaya highlighted that a participation of 45 per cent will be sought for the Mexican oil company.  He pointed out that the partners must prove capabilities in deepwater projects with an average annual production equal to or greater than 50 thousand barrels of oil equivalent per day during the period 2011 - 2015, and have experience in industrial safety and environmental protection.  In the same manner, they will have to prove equity of at least 5 billion dollars, with total assets with a minimum value of at least 25 billion dollars.
 
A minimum carry amount (investment that the partner will make by instruction and on behalf of Pemex) will be set for USD 464 million, which entails that Petróleos Mexicanos will be exempt of making any capital contribution to the joint account until the joint investments equal that amount.  The bidding variable will be the additional royalty offered to the Mexican Government which will have a ceiling, and the tie breaking variable will be the additional carry.
 
The minimum work plan includes the drilling of two delineation wells, an exploratory well, and the acquisition of 1,250 square kilometers of multi-azimuth seismic.
 
Gonzalez Anaya pointed out that the JOA is based on an internationally approved standard model (AIPN) that will provide certainty to the participants, and protects Pemex’s interests which are Mexico’s.
 
In turn, Juan Carlos Zepeda emphasized that the interested companies may qualify for this association as operators or non-operators, but can only participate in one consortium, which must at least have two operators.
 
Regarding the partners, he said that the operator partner can have a stake between 30 and 45%, and the other operator between 10 and 2%, and the non-operator a maximum of 10 per cent. Finally, he explained the schedule for the process which will finish with the announcement of the results on December 5, 2016.
 
During her intervention, Lourdes Melgar presented the criteria for the association and coincided that strengthening Pemex is giving it the tools to take advantage of Mexico’s reserves. She indicated that the process to acquire the exploration and extraction licenses will be the same as the one that applies to the rest of the participants of the 1.4 round for deepwaters.
 
For his part, Miguel Messmacher presented the economic conditions, as well as the fiscal and financial terms. He noted that unlike the provision for the 1.4 round, an additional royalty with a ceiling is expected in this process, so the tiebreaking criteria will be the additional investment that the partners are willing to make on Pemex’s behalf.  Part of the resources obtained will be destined to benefit local communities in the states closest to the area, as has been the case in all the other bidding processes.
 
The Minister of Energy, Pedro Joaquin Coldwell considered this to be a great day for the sector and Pemex, which marks a milestone in the long and fruitful history of Petróleos Mexicanos. Mexicans, he added, are proud that Pemex is the world's greatest shallow waters producer, and now, in the twenty-first century, the challenge is to consolidate itself as a leader in deepwaters, which is now a possibility thanks to the Energy Reform.
 
He stressed that our State productive company has finally obtained the valuable tool of association with large oil companies like all other oil companies do worldwide, and in this manner become more competitive.  He emphasized that Pemex is a very attractive partner for its vast experience, its human capital, its knowledge, and its service culture.
 
This announcement is made only seven weeks after the decision by the Board of Director to authorized the request to SENER, and was possible thanks to the coordinated efforts of those involved, and the determined will of President Peña Nieto’s administration to materialize the Energy Reform for the development of Mexico.
 
FACT SHEET: TRION BLOCK
 
Trion was discovered in 2012 and is located 200 kilometers east of Matamoros and 40 kilometers from the territorial waters border with a water depth of more than 2,500 meters deep.
 
Unlike other oil fields, it does not only have prospective resources but 3P reserves, which total 485 million barrels of oil equivalent.  Investments of approximately 11 billion dollars are required for exploration and exploitation.
 
To put the amount of barrels this represents into perspective, in previous rounds the assigned areas had a total volume of approximately 500 million barrels, a similar amount to the Trion reserves.
 
The resources of this field allows companies interested in other fields, particularly those of block 1, to plan their investments, increasing the joint appeal of the tender made by the Mexican State.
 
Trion is a strategic field for PEMEX, for the energy sector and for Mexico.
 
For PEMEX, the announcement of the first migration with a partner is a milestone in its history.  Thanks to the Energy Reform, PEMEX can align its operation with the best international practices: The exploration in deepwaters is high risk and requires very large investments, that all around the world companies form associations to share the risk and the investment.
 
In the past, PEMEX could not engage in associations because it was illegal; in fact in was unconstitutional.  Today, we are able and willing to find partners that can enable us to increase our production platform and take advantage of their technology and knowhow to strengthen our operation.
 
For the energy sector this is good news because Trion has possible reserves and no oly prospective resources like the rest of the blocks in round 1.4.
 
This announcement is also good news for the country because the investments that will flow into Mexico for the exploration and exploitation of this fields and the rest of the blocks of round 1.4 will enable the development of infrastructure and will foster employment in the region.
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Última modificación 29/07/2016 14:35 Pemex