In the latest episode of the ongoing saga of the Energy Reform in Mexico, the National Hydrocarbons Commission (CNH) announced this morning the foundations for the second stage of Round One. In an extraordinary meeting, CNH Commissioners approved the bidding processes for nine hydrocarbon fields with 2P reserves, located north of the 14 blocks included in the first stage of Round One. The nine fields concerned will be divided across five contractual areas, all of which are in shallow waters and contain certified proven reserves of light and ultralight crude (low viscosity and high API gravity).
The areas included in the second stage have the potential to produce 355 million barrels of crude oil equivalent, although the specific production level for each of the fields will vary. These blocks are close to areas in which PEMEX currently operates, providing an additional incentive for companies to participate in this bidding round and team up with the NOC. Infrastructure development is a concern for oil companies seeking to develop new fields, therefore, the fact that PEMEX counts with infrastructure in nearby regions is a crucial element for those seeking to participate.
Another relevant factor to consider relates to the characteristics of the hydrocarbon reserves in the blocks that are part of this phase. Proven and probable reserves, known as 2P reserves, are energy sources that have been estimated with reasonable certainty to be recoverable from well-established reservoirs. The implication is that companies that are awarded contracts to work in these bidding areas will enjoy high certainty of the available resources. Furthermore, the fact that these reserves include light and superlight crude translates into higher yields, since these resources can usually be processed with far less sophisticated and energy-intensive refineries.
According to PEMEX, 2P reserves in Mexico total 24.8 billion barrels of crude oil equivalent, of which 48% are in Chicontepec and nearby marine regions, with the most prominent fields being Akal, Balam, Tsimin, Zaap, Ayatsil and Kunah. Most of the 2P reserves in Mexico are located in the Southeastern and Tampico basins. According to Oil & Gas Journal, Mexico has 11.1 billion barrels proved of oil reserves (0.7% of total world proven reserves), consisting mostly of heavy crude varieties, with the largest concentration occurring in the Campeche Basin. In 2013, Mexico produced 2.9 million barrels of petroleum per day (3.4% of total world production), ranking as the ninth global producer according to volume.
The companies interested in participating in the bidding process for the blocks included in the second phase of Round One need to follow the same steps as previous stages, namely access to the data room, prequalification and proposal analysis. Following the publication of the bidding round in the Federation’s Official Registry, interested companies will be able to apply for access to the data room. Afterwards, interested bidders will have to register and present their proposals. The winning bidders will then sign the corresponding contracts and acquire access to the awarded blocks. All the necessary information, the bidding rules and process, as well as the technical information, will shortly be available at the Round One webpage.