New Abandonment, Decommissioning and Relinquishment Guidelines issued by the Mexican National Hydrocarbons Commission

On August 24, 2023, the National Hydrocarbons Commission (CNH) published Agreement CNH.30.06/2023, whereby it issued the Abandonment, Decommissioning and Relinquishment Guidelines (the Guidelines). These Guidelines are mandatory and came into effect on the business day following their publication.

The purpose of the Guidelines is to regulate the procedures and responsibilities that petroleum operators must follow in relation to the abandonment, decommissioning and disposal of materials associated with exploration and hydrocarbon extraction activities, as well as to the relinquishment and delivery of contractual and asignación areas.

Among other things, these Guidelines regulate:

• Coordination and supervision: mechanisms are established for coordination between the CNH, the National Agency for Industrial Safety and Environmental Protection of the Hydrocarbon Sector (ASEA) and the Ministry of Energy. This is done in order to effectively regulate and supervise the abandonment, relinquishment and return of areas.

• Financial mechanisms for abandonment: they contain the obligation of petroleum operators to establish financial mechanisms for abandonment and decommissioning activities, including, where applicable, the abandonment trust.
• Well and material abandonment: they define the obligations and procedures to be followed for the proper abandonment and decommissioning of wells.
• Authorization for disposal and removal of materials: procedures and requirements for obtaining the necessary authorization for the disposal and removal of materials related to exploration and hydrocarbon extraction operations are established.
• Delivery of contractual areas: obligations and procedures that contractors must comply with when relinquishing and delivering contractual areas to the Mexican State are outlined.
• Relinquishment and return of asignación areas: processes and requirements that asignatarios must follow in the event of choosing to relinquish from an asignación area are established. Likewise, plans are defined to ensure proper operational continuity or abandonment in such situations.
• Supervision and penalties: mechanisms for supervision are included, and penalties are established in case of non-compliance, with the aim of ensuring proper compliance with the regulations.

It is important to highlight that contractors who do not yet have an abandonment trust have a period of 90 calendar days from the date of entry into force of the Guidelines to submit their proposals to the CNH. In addition, those who have already entered into abandonment trust agreements under terms different from those established in the Guidelines can submit new contracts or modifications that align with the new Guidelines.

In the case of contractors who, at the date of entry into force of the Guidelines, fall under the conditions for relinquishment as per the corresponding exploration and extraction contract, they must notify the CNH within a maximum period of ten business days from the entry into force of the Guidelines.

For more information regarding the content of the Guidelines and the obligations set forth thereunder, please contact César Fernández and José Luis Romo Trujano.