Project

EXPLORATION AND EXTRACTION OF HYDROCARBONS IN SHALLOW WATERS OF THE GULF OF MEXICO CORRESPONDING TO ROUND 1, TENDER 1, AREA 7 (SOUTHEAST MARINE BASINS).

Sector: Hydrocarbons


Last Revision

July 01, 2024
 
Short Name of the Project:
0458 Round 1, Tender 1: Area 7, Shallow Waters
Type of Investment:
Brownfield
Subsector:
Upstream
Asset (s):
 Oil Field 465 Km2-Light oil 
Contract Currency:
US Dollars
Estimated Investment MXN:

83,056,774,230

Estimated Investment USD:

4,857,121,300

Exchange rate (USD/MXN) used by the Ministry of Finance for the economic plan 2024: $ 17.1
Contract Scope:
  Exploration,  Extraction

DESCRIPTION

Joint production contract for the exploration of hydrocarbons in shallow waters, in an area of 465 km2 in the oil province of "Southeast Basins" for the extraction of light oil.

Main Features:
- Geological Province: Salina del Istmo.
- Age (s) of play: Pliocene.
- Lithology (s): Medium grain sand.
- Type of Hydrocarbons: Light Oil
- Prospective Resources: P90: 11 million barrels of oil equivalent (mmboe), P50: 53 mmboe and P10: 263 mmboe

LEGAL AND FINANCIAL STRUCTURE

Type of Project
  Public / Private
Type of Contract
  Shared Production
Term
30 years
Selection Process
International Open Tender
Financing Sources
Private
100 %
MXN
83,056,774,230
USD
4,857,121,300
Payment Source
Project revenues
The State is partner with the contractor. The contributions to the State are:
1. The Contractual Fee for the Exploration Phase
2. Royalties
3. Operating profit, a percentage is shared with the investors

STATUS

Stage
  Operation
Substage
  > 5 years of operation
RELEVANT DATES
Request for proposals/Announcement December 11, 2014
Proposals Reception July 15, 2015
Ruling July 22, 2015
Contract Signing September 04, 2015
Execution/Construction Starting Date September 04, 2015
Operation Starting Date April 2019
Term of the Contract April 09, 2045
Contractor
Talos Energy Offshore Mexico 7, Premier Oil Exploration and Production Mexico y Sierra O&G Exploración y Producción  
Major Contractor’s Shareholders
Talos Energy México y Talos Energy LLC, Premier Oil Mexico Holdings Limited, y Premier Oil Group Limited, Sierra Oil & Gas y DEA Nederland

GEOLOCATION

State(s)
Shallow waters of the Gulf of Mexico   

Entity in charge of controlling the possession of communal land, as well as providing documentary legal security derived from the application of the Agrarian Law, and is the operator of the Geospatial Information System (SIG).

SPONSOR

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Entity
Comisión Nacional de Hidrocarburos
Department
Dirección General de Contratación para la Exploración y Extracción
E-mail
contacto@cnh.gob.mx

SUSTAINABLE INFORMATION

PROJECT’S SUSTAINABILITY SUMMARY

The project is aimed to increase hydrocarbons productivity and considers environmental impacts mitigation, biodiversity conservacy in the operation area, and safety and health measures for workers.

* This summary was prepared based on the methodological framework defined by the Inter-American Development Bank (IDB) in the document entitled: “Attributes and Framework for Sustainable Infrastructure”, which is You can check Here.

Additionally, a brief explanation of the methodology and a summary of the questions applied can be consulted in this Document.

ADDITIONAL INFORMATION

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Source
National Hydrocarbons Information Center
Description
It is in charge of promoting and sharing the knowledge of the subsoil to foment the activities of exploration and extraction of hydrocarbons.
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Source
Comisión Nacional de Hidrocarburos
Description
Regulatory entity with technical autonomy, responsible for the organization of tenders, and execution of contracts related to the exploration and extraction of hydrocarbons.
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Source
Secretaría de Medio Ambiente y Recursos Naturales
Description
Federal government entity and sectorial authority responsible for establishing the necessary criteria and instruments to guarantee the protection, preservation, and use of natural resources, by developing an environmental policy that ensures sustainable growth.
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Source
Secretaría de Energía
Description
Federal Government entity responsible for controlling, managing and regulating Mexico’s energy resources, and establishing the national energy policy.

REMARKS

The estimated investment amount refers to approved investments, which are those that operators estimate they will carry out in the various plans, as applicable (exploration, evaluation, and/or development).

Oil and gas exploration and extraction contracts may or may not generate revenue if the operator finds commercially extractable resources in the assigned area. In case the operator finds and extracts hydrocarbons, he must pay the State the percentage of production that he offered in the tender, once costs are recovered.

The State is partner with the contractor. The contributions to the State are:
1. The Contractual Fee for the Exploration Phase.
2. Royalties;
3. Operating profit, a percentage is shared with the investors

It is important to clarify that all the exploration risk is assumed by the operator, that is, if the assigned operator does not find economically viable hydrocarbons to be extracted, the Mexican State has no payment obligation.

There are two possible extensions in the contract term subject to the area being in regular commercial production. The first extension of 5 years and a second extension for an additional 5 years.

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