MX Deep Water
Mexico Oil & Gas “Apertura"
- Round 1 Update - Deep Water Exploration
HSE International, LLC participated recently at the Society of Petroleum Engineers (SPE) Exploration and Production (E&P) symposium on Health, Safety, Environment, and Sustainability, March 30 - 31 in Mexico City. Presentations and panel discussions during the event, which focused on addressing safety and non-technical risks, were quite interesting, and the event attracted a wide array of participants with interest in health, safety and environment issues in the Mexican O&G sector.
There were also presentations and Q/A sessions with the key HSES regulators, notably the Industrial Safety and Environmental Protection Regulatory Agency for the Hydrocarbon Sector (Agencia de Seguridad, Energía y Ambiente – ASEA) and Mexico's Energy Ministry (Secretaria de Energía – SENER) charged with social impact assessment and prior consultation.
Thus far, the Mexican Oil & Gas E&P Round 1 "Apertura" has conducted three bidding rounds, including rounds for shallow water exploration and extraction, and onshore mature blocks. The process has been accessible to all interested stakeholders, with typical (standard) contract models, the names of bidders and successful awards publicized through social media and dedicated internet web pages.
Although International Oil Companies did participate in bidding rounds to date, major international O&G (IOCs) companies are expected to be even more interested in the next such round, namely the call for deep water exploration. To April 15, 19 IOC's have been authorized to access the Data Room, 14 have secured access to the data, and 9 have initiated the prequalification process according to official information.
Oil companies have paid Mexico's oil regulator, the National Hydrocarbon Commission (Comisión Nacional de Hidrocarburos – CNH), nearly $80 million for seismic data ahead of the auction for deep-water fields. This sum reflects a fraction of companies' spending in the past year to acquire geological data ahead of the Dec. 2016 auction. The deep water bid round will feature 11 largely unexplored blocks in the Perdido and Cuenca Salina areas located in the Mexican side of deep waters of the Gulf of Mexico.
Contractual and regulatory requirements include an HSE Management Program to manage risks (Programa de Administración de Riesgos: Conformación e Implementación del Sistema de Administración); conducting environmental and social impact assessments; determining environmental and social existing ("as is") conditions by executing baselines, and monitoring and reporting on industrial and operational safety, environmental protection, occupational health, and socio-economic conditions.
The regulatory approval process is complex and untested, and given the lead time required for offshore deep drilling equipment and associated logistics and facilities, it is important to clearly understand these requirements, the interrelations, and develop a detailed regulatory road map to ensure a smooth and timely execution synchronized with the technical exploration requirements and milestones.
Regulations are in the process of being developed, with some to be released shortly and others to follow over the next months. Close coordination with ASEA, SENER and CNH is necessary to ensure adequate - timely approvals, while also seeking potential beneficial synergies.
How HSE International, LLC can help
HSE International uses its sector-focused approach, deep knowledge and experience in the oil and gas industry, and international delivery capabilities to help our clients. HSE International has worked in the Mexican oil and gas sector since 2008, including supporting IOCs, NOCs and Regulators, along the oil and gas value chain. We have developed a process to address environmental, social and safety risks each step of the way and are eager to contribute to a more sustainable development of the oil and gas sector in Mexico.