On August 29, 2022, the final bidding guidelines of the International Open Tender for the Cuitláhuac Exploration and Production Integrated Service Contract (CSIEE) were published by the Petróleos Mexicanos.
Capitalized terms in this note shall have the meaning ascribed to them in Spanish in the final version of the CSIEE model.
Some material changes from the model contract previously published on May 3, 2022, are:
- Creditor: references to the service provider's financing and the possibility of issuing default notices to creditors are eliminated.
- Annual Service Program: an automatic approval mechanism was included in the event of expiration of the term without response from Pemex Exploración y Producción (PEP).
- Payment of the exploration services: without Commercial Discovery, the service provider will be entitled to payment of 50 percent of the investments made; with Commercial Discovery, 100 percent.
- Periodic reports: during the primary and development periods, and reports related to national content.
- Decommissioning Fund: the trust is replaced by an account funded and controlled by the services provider (in an institution with PEP's favorable opinion). The interest and remanent of funds in the account will be PEP's property.
- Payment: is subject to the delivery of the net hydrocarbons to PEP, their commercialization and the existence of FED. The service provider assigns the collection rights to the financial institution chosen by PEP, who will make the payment within 30 days after receiving the invoice.
- Force Majeure: the impossibility of obtaining the necessary permits when this is attributable to the governmental authority is included.
- Assignment of collection rights: it is included the possibility to undertake partial assignments of collection rights.
- Subcontracting: PEP's right to review contracts with each subcontractor is included. Legal and regulatory compliance obligations for subcontractors are included.
- Indemnifications, Conventional Penalties and Damages: clarifications are made regarding the concepts covered and the responsibilities of the parties.
- Termination/Performance Bonds: its period of validity is extended to 12 months after the termination of the CSIEE.
- Intellectual Property: additional protection provisions are included in favor of PEP for violations of the service provider.
Updates to the bidding schedule for the Cuitláhuac CSIEE.
On September 5, 2022, Petróleos Mexicanos extended the deadlines in the final bidding guidelines of the International Open Tender for the Cuitláhuac Exploration and Production Integrated Service Contract (CSIEE), as follows:
- Before the third business day prior to the presentation and opening of proposals, the interested parties must submit their interest declaration pursuant the applicable form.
- September 30, 2022: presentation and opening of proposals.
- October 11, 2022: CSIEE award.
- October 26, 2022: execution of the CSIEE.
An overview of Pemex's comprehensive exploration and production service contracts can be viewed in
our previous update.
For more information on the CSIEE model or the bidding process, please contact:
César Fernández | International Partner
Norton Rose Fulbright US MX, S.C.
Tel +52 55 3000 0604 | Cel +52 1 55 5438 2601
cesar.fernandez@nortonrosefulbright.com
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