Francisco Castellanos Paéz from the Technical Extraction Unit of the National Hydrocarbons Commission of Mexico (CNH) explained that this will serve to standardize assignments and their monitoring and evaluation, without the state company going through many authorizations for its activities.
The Mexican government will reduce the regulatory burden to accelerate the production of hydrocarbons by Petróleos Mexicanos (Pemex). This will particularly apply to the new fields that began production during the López Obrador administration, so that contract terms are standardized under 280 assigned titles. That includes minimum work commitments, technical capabilities are also generally accredited, and approvals where exploration work is already taking place.
Francisco Castellanos Paéz from the Technical Extraction Unit of the National Hydrocarbons Commission (CNH) explained that this will serve to standardize the assignment of areas and their monitoring and evaluation, without the state company going through authorization requests for many of its activities.
The official explained in the 16th extraordinary session of the regulator's governing body that since 2017 they have tried to standardize all assignment titles with the CNH's opinion for the remaining 186 that were granted to Pemex since Round Zero. This, so that the company does not resort to approval requests every time it needs authorizations for titles that contain mixed exploration and production activities.
This Thursday, May 16, as a technical opinion from the regulator, the Secretary of Energy was requested to modify the extraction titles terms so they have the same definition of development area, field and development plan. The Ministry of Energy and the National Hydrocarbons Commission technically believe this should be done.
Regarding extraction, the CNH considered that for the allocations granted in Round Zero, Pemex has already presented elements to prove compliance with its technical, financial and execution capabilities to carry out its activities and, therefore, the regulatory burden on the Mexican state company is reduced. Thus, it does not need to accredit field by field, but rather has prior standard approval.
Unlike what the Secretary of Energy requests (asking Pemex to begin abandoning fields that are no longer of interest to it, until the Secretary has resolved favorably), the CNH suggests that a provision for total or partial abandonment (in accordance with current regulations, that is, the same as in the case of contractors) is included since the title is assigned.
Likewise, the minimum work commitment is reduced in assignments where there are new fields, such as Agua Dulce, Quesqui, Mezcalapa and Valeriana. To drill new fields, it will no longer be required to disaggregate compliance by year but rather the same criteria will apply to all: 50% of the commitment in major repairs to the infrastructure for all cases that are new fields, with reserves of more than 5,000 barrels of crude oil equivalent, with more than 1,000 barrels and with less than this volume.
For drilling and completions, it is proposed that the obligation to demonstrate compliance be lowered to 30% in all cases.
Finally, if they do not have production, drilling and completions must account for 10% of the minimum work program and 15% of major repairs.
Another modification for assignments where new hydrocarbon deposits may possibly be found in fields where there is already production, is that the exploratory works will be previously authorized and Pemex only has to inform the Secretary of Energy 30 days before starting to carry out any activity.
