Client Alert: Mexico Energy Reform Update

On May 12, 2015 Mexico’s National Hydrocarbons Commission published bidding guidelines for the third of a series of bids for oil and gas exploration and production blocks (the “First Onshore Tender”) as part of a continued and aggressive program to open up exploration and production in Mexico to private investment, with such process generally referred to as Round One.  Unlike the first two Round One tenders currently underway, both for shallow water exploration and production (the “Shallow Water Tenders”), the First Onshore Tender is for 26 onshore production blocks located in the states of Chiapas (five blocks), Nuevo León (eight blocks), Tabasco (five blocks), Tamaulipas (two blocks), and Veracruz (six blocks).  This First Onshore Tender has been structured so that winning bidders enter into a license agreement for each awarded contractual area with the Mexican government, rather than a production sharing agreement as is the case with the Shallow Water Tenders.