Mexico pushes back signing of 1st Round One contracts

Mexico's hydrocarbons commission (CNH) will delay the signing of contracts for the only two blocks successfully auctioned during the first shallow water auction until September 4, at the request of the winning consortium.

The consortium, formed by Mexican firm Sierra Oil & Gas, UK-based Premier Oil and Houston-based Talos Energy, asked for the postponement while it finalizes its constitution as a Mexico-based entity.

Firms awarded contracts must be locally based.

The consortium is currently submitting the documents for the constitution of the firm that will be operating on these contracts, CNH president Juan Carlos Zepeda (pictured) was quoted by Dinero en Imagen newspaper as saying.

The consortium was awarded blocks 2 and 7 in the initial offshore tender on July 15, and it offered the state operating profit percentages of 55.99% and 68.99%, respectively. The minimum percentage requirement for the state's share of profits for both blocks was 40%.

The contracts were originally due to be signed on August 21.

Speaking at a recent energy forum in Mexico City, Zepeda also reiterated that Round One will continue as planned, with the second shallow water auction on September 30 and onshore fields on December 15.

Speaking at the same event, the energy ministry's (Sener) head of exploration and extraction policies Guillermo García Alcocer said the fifth phase of Round One will contain both conventional and non-conventional fields, the newspaper said.