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The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP

Haynes and Boone, LLP · Aug 16, 2016 · 70 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 1
    The Changing Future in Mexicos Oil & Gas Industry: Growth and Expansion August 16, 2016 Presented by: Ricardo Garcia-Moreno Partner Houston 2016 Haynes and Boone, LLP
  2. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 2
    MEXICO TOTAL OIL PRODUCTION AND CONSUMPTION, 2011-2016 Mexico Total Oil Production and Consumption, 2011-2016 2 2016 Haynes and Boone, LLP
  3. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 3
    MEXICOS DRY NATURAL GAS PRODUCTION AND CONSUMPTION, 2004-2013 3 2016 Haynes and Boone, LLP
  4. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 4
    ROUND ZERO AND ROUND ONE 4 2016 Haynes and Boone, LLP
  5. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 5
    ROUND ZERO ROUND ZERO PEMEX was assigned 83% of Mexicos total proved and probable hydrocarbon reserves (1P / 2P) and 21% of Mexicos total prospective resources The reserves granted to PEMEX positions it in 5th place worldwide in…
  6. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 6
    ROUND ONE Phase What was Bid on Number of Award Winning Bidders Barrel of Oil Equivalent Bidders (BOE) 1 14 block for exploration and 25 2 blocks Consortium formed by Sierra Oil Block 2: 142 Million CNH-R01- extraction of hydrocarbons…
  7. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 7
    ROUND 2 PHASE 1 On July 20, 2016, the CNH, published the Bidding Guidelines in connection with a Tender Process to award fifteen production-sharing contracts for the shallow-water production of hydrocarbons (CNH-R02-L01/2016).…
  8. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 8
    U.S. NATURAL GAS PIPELINE EXPORTS TO MEXICO 8 2016 Haynes and Boone, LLP
  9. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 9
    MEXICO PIPELINE SYSTEM 9 2016 Haynes and Boone, LLP
  10. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 10
    RICARDO GARCIA-MORENO Ricardo Garcia-Moreno, Partner in the Houston office of Haynes and Boone, practices corporate law with an emphasis in mergers and acquisitions, energy, securities law compliance and corporate governance. He has…
  11. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 11
    11
  12. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 12
    The Changing Future of Mexicos Oil & Gas Industry Growth and Expansion. Mauricio Cuellar Gamboa August 2016 EnerComs The Oil & Gas Conference 1
  13. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 13
    Information disclaimer The following information is the sole responsibility of the speaker and does not necessarily represent the institutional position of the National Hydrocarbons Commission, which reserves its position and…
  14. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 14
    Purpose and Topics The purpose of this presentation is to show an overview of the achievements in connection with the Exploration and Production activities, supporting the Oil & Gas industry of Mexico. Topics Principles of the…
  15. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 15
    Principles of the Energy Reform Hydrocarbons in the subsurface belongs to the Mexican 1 State Free participation and competition between the Mexican 2 State and private players under the same conditions 3 Strength the Regulatory…
  16. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 16
    Main advances in Energy Reform R1 First Bidding Constitutional Shallow waters Amendment Exploration and R1 Third Bidding December 20th, Round Zero Extraction Onshore- Extraction 2013 August 13th, 2014 December 11th, 2014 May 12th,…
  17. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 17
    Main advances in Energy Reform Bidding Rules for the Signing Contracts L1 Signing Contracts L2- migration of an R1 Fourth Bidding A2 y A7 A1 Signing Entitlement to a Farm- Deep waters Contracts L3 out for Trion bloc. September…
  18. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 18
    Strategic Goals of CNH 7
  19. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 19
    Specific responsibilities of CNH Technical support to the Finance Ministry and the Mexican Rules and supervises the Petroleum Fund compliance Technical Advice to the Energy Ministry Approves the annual investment and operation…
  20. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 20
    Develop Geological knowledge of Mexico Suboil Acquisition of data Industry of information Reprocess of existing Multi-client model Seismic Reprocess of existing data 22 permits for hydrocarbon surface exploration for data,…
  21. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 21
    Industry of information Multi-client model 350k km of new seismic data 2D 8.7 times the Earth circumference 111k km2 of new seismic 3D WAZ 3.2 times the existing 3D WAZ info 387k km2 of seismic reprocess 2.6 times the total info…
  22. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 22
    Summary of the Biddings Contractors Bidding 1rs 2nd 3rd Total 14 exploration PSCs 5 PSCs 25 License contracts Submittal and Opening of July 15th, September December bids dates 2015 30th, 2015 15th, 2015 Contracts awarded 2 3 25 30…
  23. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 23
    Progress of the Round One 3 Tenders 6 pending contracts 44 areas for exploration and 30 awarded extraction in shallow areas water and onshore fields 24 signed contracts About 69% of awarded areas 12 fields in production…
  24. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 24
    4th Bidding of Round 1 10 areas located in the deepwater Gulf of Mexico 4 Perdido Fold Belt 6 Basin Salina Information Bidding Process to June 10, 2016 Companies Companies Companies Companies Companies showed requesting…
  25. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 25
    4th Bidding of Round 1 10 License Contracts Perdido Folt Belt % Prospective Area Seis Deep water Block resources (sq km) mic (m) (MMboe) 3D 1 1,678.0 625.8 100 1,000-3,100 2 2,976.6 1,439.7 79.2 2,300-3,600 3 1,686.9 1,304.0…
  26. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 26
    Round 2 1st Bidding On July 20, the 2nd Round Bid was convened by CNH 15 contract areas This are located in shallow waters of the Gulf of Mexico. The oil provinces Tampico Misantla, Veracruz and Southeastern Basins. 6 areas in…
  27. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 27
    Round 2 Shallow Waters of the Gulf of Mexico On July 20, the 2nd Round Bid was convened by CNH 5 blocs for exploration and production 10 blocs for exploration Location Number of Bloc Surface (km2) 1 544.4 2 548.6…
  28. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 28
    Bidding for Trion Trion Bloc Migration of 2 Entitlements by Pemex: AE-0092 Subsaline Belt -10 AE-0093 Subsaline Belt -11 To Explorations and Production License Contracts 17
  29. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 29
    Bidding for Trion Participation structure: Pemex 45% Designated Operator [30% - 45%]* Operator [10% - 25%] Non Operator (Max 10%) Technical experience: Participate as Operator in a project within the last 10 years. At least one…
  30. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 30
    Regulate the E&P operations 1. Guidelines of Analysis and assessment of prospective and contingent resources. Official Gazette date 05.12.2013. 2. Guidelines to authorize Pemex to drill wells. Official Gazette 19.08.2014. 3.…
  31. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 31
    Final Comments From this presentation we talked about: The Main advances in Energy Reform in Mexico and how has the CNH take the leadership on the management of the bids, entitlements and contracts. The interaction among the…
  32. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 32
    The Changing Future of Mexicos Oil & Gas Industry Growth and Expansion. Mauricio Cuellar Gamboa mauricio.cuellarcnh.gob.mx August 2016 EnerComs The Oil & Gas Conference 21
  33. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 33
    The Changing Future in Mexicos Oil & Gas Industry: Growth and Expansion August 16, 2016 Presented by: Nicolas Borda Partner Mexico City 2016 Haynes and Boone, LLP
  34. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 34
    Content Key changes to Mexican oil & gas sector Energy Agencies CENAGAS CENACE Mexican Petroleum Fund PEMEX ASEA Permits & Authorizations Cross participation Price regulation Recommendations by COFECE on gasolines 2 2016…
  35. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 35
    Key changes Mexican oil & gas sector Mexico maintains state ownership of subsoil hydrocarbons resources, but allowing companies to take ownership of those resources once they are extracted and to book reserves for accounting…
  36. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 36
    Key changes Mexican oil & gas sector Opening refining, transport, storage, natural gas processing, and fuels sectors to private investment; Pemex was transformed into a productive state enterprise with an autonomous budget and a…
  37. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 37
    Key changes Mexican oil & gas sector Pemexs monopoly on retail gasoline and diesel sales ended on December 31, 2015. Private parties are allowed to import gasoline and diesel as of April 1, 2016. 5 2016 Haynes and Boone, LLP
  38. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 38
    Key changes Mexican oil & gas sector National content percentage shall be observed: Statutory percentage for E&P activities is 35%, except for deep waters and ultra deep waters which percentage shall be determined on a case by case…
  39. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 39
    7 2016 Haynes and Boone, LLP
  40. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 40
    Energy Agencies The National Hydrocarbons Commission (CNH) will act as upstream agency, the authority in charge of organizing the public bids to award E&P Contracts and the representative of the Nation in the E&P Contracts. The…
  41. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 41
    CENAGAS CENAGAS is a new entity created by the energy reform in charge of administering former Pemexs (a) transportation assets; and (ii) transportation and capacity reservation. CENAGAS is intended to be the independent system…
  42. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 42
    Mexican Petroleum Fund The fund will manage the Mexican state revenue from E&P Contracts . It also will collect and pay the considerations to the E&P Contractors. The fund is meant to receive 4.7% of the countrys GDP on an annual…
  43. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 43
    PEMEX Pemex, as a result of the opening of the industry, will be the predominant player subject to antitrust and competition laws to be enforced by the Federal Competition Commission, and the asymmetry regulation to be introduced by…
  44. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 44
    PEMEX Asymmetric regulation What is Specific legal provisions to diminish monopolistic power of PEMEX issued by the CRE. Its purpose is to allow new participants to compete with PEMEX under similar circumstances. 12 2016 Haynes…
  45. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 45
    PEMEX Asymmetric regulation Asymmetric regulation in first hand sales and transportation and storage capacity limits have been imposed to Pemex and its subsidiaries in order to counterbalance its market power. Pemex must unbundle all…
  46. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 46
    New subsidiaries of PEMEX Pemex Exploracin y Produccin (E&P activities) Pemex Perforacin y Servicios (Drilling and services) Pemex Cogeneracin y Servicios (Cogeneration and Services) Pemex Etileno (Ethilene) Pemex Fertilizantes…
  47. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 47
    ASEA ASEA will regulate and approve from the industrial safety and environmental perspective all projects from exploration and production to gas processing and refineries, to pipelines, storage terminals and retail businesses. The…
  48. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 48
    Permits & Authorizations CRE SENER CNH Hydrocarbons Oil refining Well drilling Transportation (by pipeline or other means) Hydrocarbons torage Natural gas processing Recognition and Superficial exploration activities (ARES)…
  49. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 49
    Cross participation An entity may participate, directly or indirectly, in the corporate structure as user, producer, marketer of transportation and storage permit holders if such participation does not affect market access and…
  50. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 50
    Cross participation Participation of one company in the corporate structure of another entity can arise in two manners, directly or indirectly. Direct participation takes place when the entity owns the membership interests or…
  51. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 51
    Price regulation 19 2016 Haynes and Boone, LLP
  52. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 52
    Natural Gas Tariffs for transportation, storage and distribution are approved by the CRE. Permit holders of such activities submit for CREs approval a business plan containing, investment commitments, efficiency factors and other…
  53. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 53
    Gasoline and Diesel In order to transit into a liberalized market, there has been a maximum price limit on public sales of gasoline and diesel since January 1, 2015, which will be lifted on December 31, 2017. The maximum price is…
  54. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 54
    Recommendation issued by COFECE on fuels market On January, 2016, COFECE issued an opinion with recommendations to the model contracts proposed by Pemex for the supply (formerly known as first-hand sale contracts) and gasoline and…
  55. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 55
    Recommendation issued by COFECE on fuels market The purchase of fuels from Pemex shouldnt create any exclusivity or limit sales transactions with other suppliers; Avoid the inclusion of any commercial margin linked to the service…
  56. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 56
    FIBRA E Trust under Mexican law that issues certificates that are publicly traded in Mexico Backdrop of energy industry and FIBRA Income requirement: At least 90% of gross income each year must come from: oil & gas midstream and…
  57. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 57
    Anticorruption On 2015, one of the major steps towards transparency was the Constitutional reform and the creation of a National Anticorruption System. On July 18, 2016, the new legal framework implementing the 2015 Constitutional…
  58. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 58
    Anticorruption The National Anticorruption System will be responsible for the nationwide anticorruption policy and for establishing the guidelines that all levels of government (executive, legislative and judicial branches, either…
  59. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 59
    Anticorruption Sanctions under the newly established anticorruption system: Reduced sanctions will be given to companies collaborating during the investigations or whistleblowing. Sanctions may increase if the partners, board of…
  60. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 60
    Anticorruption Other anti-corruption legislation: The Federal Anti-Corruption Law in Public Procurement establishes responsibilities and sanctions on national and foreign persons or entities for irregularities committed in federal…
  61. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 61
    Rule of Law Although Federal Courts in administrative matters are being specialized in regulatory matters (antitrust, telecommunications and energy) there is little expertise to solve energy litigation. Waiver of sovereign inmunity…
  62. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 62
    Land use and Social aspects New land use and acquisition procedures have been established. Social impact assessment and indigenous consultation are new requirements to assure supportiveness of the communities for the development of…
  63. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 63
    Land use rights procedure 1. The developer shall inform in writing to the landowner its interest to use the relevant land where the missing 5% is located for the provision of the transmission service. 2. The notification mentioned…
  64. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 64
    Land use rights procedure 5. In the case of the project, and any other project located in lands regulated by the Agrarian Law, the negotiations shall comply with the following additional requirements: (i) The Ejido members may…
  65. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 65
    Land use rights procedures 7. Once the parties reach an agreement, the agreement shall be filed with: (i) the National Agrarian Registry (Registro Nacional Agrario) or the Public Registry of Property (Registro Pblico de la…
  66. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 66
    Indigenous consultation With the purpose of taking into consideration the rights and interests of the indigenous communities and peoples located where energy projects will be developed, the Ministry of Energy shall carry out the…
  67. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 67
    Natural gas projects Source: SENER, 2016 35 2016 Haynes and Boone, LLP
  68. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 68
    Fuels projects Source: SENER, 2016 36 2016 Haynes and Boone, LLP
  69. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 69
    Contact: Nicolas Borda Partner, Mexico City nicolas.bordahaynesboone.com 37 2016 Haynes and Boone, LLP
  70. The Changing Future in Mexico's Oil and Gas Industry – Haynes and Boone, LLP – slide 70
    2016 Haynes and Boone, LLP

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