Amendment to the Administrative Provisions regarding Bidding for Exploration and Production Contracts of Hydrocarbons

White & Case LLPOn December 17, 2020, the National Hydrocarbons Commission ("CNH") published in the Federal Official Gazette ("DOF") the Resolution CNH.E.50.002/2020 (the "Resolution"), by means of which the Administrative Provisions regarding Bidding for Exploration and Production Contracts of Hydrocarbons were amended (the "Provisions").

The Provisions regulates the acts and stages of the bidding process carried out by CNH to award the Exploration and Production Contracts (Contratos de Exploración y Extracción) ("EPE") provided by the Hydrocarbons Law ("LH") and the Federal Constitution. It should be noted that these bidding procedures were suspended by the current federal administration.

Among the main modifications to the Provisions are the following:

  • The object of the Provisions was expanded to include, within the bidding processes, specific acts and stages related to the procedures for selecting a partner of Petroleos Mexicanos ("Pemex") or another State Productive Company ("EPE");
  • The possibility of the Bidding Committee being assisted by advisers from external firms engaged by the CNH was eliminated;
  • The coordinator of the Bidding Committee was granted with the faculty to appoint auxiliary members of said Committee (faculty that previously corresponded to the President of CNH´s board of commissioners);
  • The functions of the Bidding Committee were expanded to include: (i) request information or documentation from interested parties, bidders, winning bidders or, where appropriate, related third parties during the bidding procedures; (ii) resolve on the granting or refusal of the authorizations or registrations that are required according to the Bidding Bases; and (iii) propose to the CNH´s board of commissioners the cancellation of the tender;
  • It was included that the Bidding Bases must comprise, in the event of the procedures for the selection of a partner for PEMEX or another EPE, the manner in which said EPE will participate in the company;
  • Likewise, it was specified that the Bidding Bases must include (if applicable) the provisions of Article 16 of the LH, which provides that Ministry of Energy (but is not obligated) to include the participation of the Mexican State to through an EPE or a financial vehicle specialized in said procedure, in the following cases:
    • When the Contract Area that is the object of the tender coexists, at different depths, with an Allocation Area;
    • When there are opportunities to promote the transfer of knowledge and technology for the development of the capacities of Pemex or another EPE; or
    • In the event of projects that want to be promoted through a specialized financial vehicle of the Mexican State.
  • It was included that the Bidding Committee could performance non-substantial modifications to the Bidding Bases, including their annexes and formats (i.e., clarifications of form and adjustments to the calendar of the bidding procedure, as long as the date of the presentation and opening of proposals is not involved), which must be made public through the CNH website; and
  • Finally, the provisions of Article 13 of the LH were included in the sense that, in the event of bidding processes for selection of a partner for an EPE, the CNH will request the opinion of Pemex or the EPE, for the purposes of the prequalification stage.

The modifications to the Provisions provided for in the Agreement entered into force on December 18, 2020.

Click here to download 'Amendment to the Administrative Provisions regarding Bidding for Exploration and Production Contracts of Hydrocarbons' in Spanish (PDF).

Gustavo Neyra López (White & Case, Legal Intern, Mexico) contributed to the development of this publication.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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