Insights

Mexico Announces First Deepwater Oil and Gas Auction

Mexico Announces First Deepwater Oil and Gas Auction

On December 17, 2015, Mexico's National Hydrocarbons Commission (Comisión Nacional de Hidrocarburos-CNH) published the bid guidelines for the much-anticipated first auction of deepwater blocks. The fourth auction to take place under Mexico's Round One, CNH-R01-L04/2015 will consist of 10 deepwater blocks. Four blocks will be located in the Cinturón Plegado Perdido area, off the coast of the State of Tamaulipas and near the maritime boundary with the United States, and six will be located in the Cuenca Salina area between the coasts of the State of Veracruz and the State of Tabasco. The water depth of the blocks varies between 1,500 and 3,000 meters.

The date for the auction is expected to be announced in 2016, with the auction taking place within 90 days of the announcement.

According to estimates provided by Mexico's Ministry of Energy, each deepwater block will require approximately US$4.5 billion to be developed over the 50-year term of the concession, which will be pursuant to a license agreement.

Successful bidders will be entitled to keep 100 percent of the hydrocarbons from the deepwater blocks, subject to the obligation to pay royalties, taxes, and other fees to the Mexican government. For a consortium to qualify to bid, the operator must hold at least a 30 percent working interest.

 

Contract Areas Location Area (Km2)
Deep Water 1 Cinturón Plegado
Perdido
1,678.0
2 2,976.6
3 1,686.9
4 1,876.7
 

 

 
1 Cuenca Salina 2,381.1
2 2,411.2
3 3,287.1
4 2,358.7
5 2,573.2
6 2,605.5

Lawyer Contacts

For further information, please contact your principal Firm representative or one of the lawyers listed below. General email messages may be sent using our "Contact Us" form, which can be found at www.jonesday.com/contactus/.

Scott Schwind
Houston
+1.832.239.3710
sschwind@jonesday.com

Alberto de la Parra
Mexico City
+52.55.3000.4087
adelaparra@jonesday.com

Salvador Gallo
Mexico City
+52.55.3000.4032
sgallo@jonesday.com

Francisco Pams of the Houston Office assisted in the preparation of this Alert.

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