October 14, 2016 / 10:36 PM / 4 years ago

Mexico eases consortium rules for deep-water Trion joint venture with Pemex

MEXICO CITY (Reuters) - Mexico’s oil regulator on Friday approved a more flexible bidding scheme for a highly anticipated upcoming auction that will pick a partner for national oil company Pemex to jointly develop its deep-water Trion block in the Gulf of Mexico.

Pemex logo is seen at the headquarters of state-owned oil giant in Mexico City, Mexico October 13, 2016. REUTERS/Carlos Jasso

Consortia wishing to bid on the project can now have a single operator that will be responsible for managing the development, according to the change approved by the regulator, known as the CNH.

“The previous version of the joint operating agreement (JOA) required that bidders form a consortium with at least two operators, and that this consortium of two operators is the one that would partner with Pemex,” said CNH President Juan Carlos Zepeda.

“This possibility still exists, but it’s no longer required,” he said, emphasizing that the change should help boost competition among potential bidders.

The CNH previously voted to lower Pemex’s minimum stake in the project from 45 percent to 40 percent.

The Trion light oil field is located in the Perdido Fold Belt just south of Mexico’s maritime border with the United States.

It is Pemex’s most promising deep-water project, believed to hold some 480 million barrels of oil equivalent, and will require an investment of about $11 billion.

The Trion joint venture will be awarded in the form of a license contract, which is similar to a concession, but a separate JOA will govern the relationship between Pemex and its would-be partners on the project.

The CNH also modified the JOA to stipulate that Pemex will lose its voting rights if it defaults on its responsibilities and does not remedy the issue within 90 days. The change follows a previous rule approved by the energy ministry that gave Pemex the right to vote on the project’s development plan, work program and budget even if it was in default.

The license will be awarded on Dec. 5, the same day that the regulator will also auction 10 separate deep-water fields, including four that surround Trion.

Reporting by David Alire Garcia and Adriana Barrera; Editing by James Dalgleish

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