Dallas – Thompson & Knight LLP assisted BHP Billiton Petróleo Operaciones de México (“BHPB”), a unit of Australia’s BHP Billiton Ltd., in the bid process to select PEMEX’s partner to develop the Trion field in the Gulf of Mexico. The Firm also assisted China Offshore Oil Corporation E&P Mexico (“CNOOC”), a unit of CNOOC Ltd., in securing two license agreements from the National Hydrocarbons Commission. The Trion and Round 1.4 deepwater tenders concluded on December 5, during the final phase of Mexico’s first oil and gas bid round since the country began energy reform in 2013.
“The results of these tenders are of historic proportions and we are honored to be at the forefront, assisting our clients in navigating the challenges and opportunities presented by Mexico’s most ambitious energy reform since the oil industry nationalized in 1938,” said Gabriel Ruiz, Thompson & Knight’s Monterrey Office Leader and a Partner in the Firm’s International Energy Practice Group.
BHPB secured operatorship and 60 percent interest of the areas covering the Trion field, located south of Mexico’s maritime border with the United States. The company’s bid of $624 million includes a commitment to an additional royalty of four percent. Production from Trion is expected to start in 2023 with output reaching 120,000 boe/d in 2025.
CNOOC was awarded Blocks 1 and 4 in the Perdido Fold Belt, offering an additional royalty of 17.01 percent and 15.01 percent, respectively, as well as investment commitments in excess of the required minimum. This bidding phase awarded eight of 10 deepwater blocks in the Gulf of Mexico to a variety of global operators.
The next bid round (shallow-water blocks) involves 15 areas off the coast of the states of Veracruz, Tabasco, and Campeche, and is expected to be awarded March 22, 2017 in the first phase of Round Two. For more information about Mexico Energy Reform, visit https://www.tklaw.com/energy-mexico-practices/.