Mexico’s oil regulator has voted to change the rules for the second phase of the country’s round one auction.
The move includes lowering a required corporate guarantee that was said to have initially put investors off.
Last month the first inaugural oil auction – which covered 14 shallow water exploration blocks – took place.
However, only two blocks were awarded in the first stage of the highly anticipated auction.
The next phase consists of five shallow-water production-sharing contracts covering nine oil fields that contain proven reserves.
They are set to be awarded on September 30.
A new corporate guarantee – essentially money a consortium of oil companies has to put up front in case of an accident – was set at 18 times the value of the minimum work commitment required by each contract.
The previous rule had required that a consortium bidding on oil parcels must have one member act as a guarantor with sharehold equity of at least $6billion to protect the state’s interest in the event of a major accident.
The change will allow companies to post a smaller guarantee and is aimed at luring more bidders.
The commission has also tweaked a $2.5 million bid security guarantee which can now be applied to all blocks a bidder wins rather than just one.
Juan Carlos Zepeda, president of Mexican oil regulator CNH, said:”We are presenting new alternatives, a package of guarantees that is more open with new instruments that seek flexibility so
that investors can comply with the guarantees that the state requires.”
It is understood the changes were made in a response to flaws observed in the previous auction.
Final contract and bidding terms are set to be published on August 21.
The contract’s adjustment mechanism has also been modified to allow oil companies a higher upside if the profitability of the contract increases.
The CNH has also added a new required insurance policy to each contract to cover possible spills or other industrial accidents set at a minimum $1 billion.