PEMEX Tenders E&P Services at Onshore Cuitláhuac Field

This week, PEMEX Exploration and Production (E&P) published a call for bids for an Integral Exploration and Extraction Services Contract (CSIEE), the latest modality for service contracts. The tender is part of the NOC’s wider strategy to boost production levels.

The Cuitláhuac contractual area, located 44.5km southwest of the city of Reynosa, Tamaulipas, forms part of the Burgos Integral Project registered with the finance ministry. The contractual area comprises Assignment Area A-0112-M, which permits hydrocarbon extraction activities and includes the already operational wells of the Cuitláhuac and Torrecillas fields as well as the three fields of René, Orégano and Gomeño.

The contract area includes the Cuitláhuac and Torrecillas fields. It also involves fields named René, Orégano and Gomeño, though the latter three fields are not known to hold any reserves. Within the contract area, exploration efforts found around 17 non-associated gas production prospects of the Vicksburg Oligocene age. The project intends to recover a volume of 174bcf of natural gas and 3.87MMboe of condensates.

The bid published by PEMEX will follow the CSIEE model, the current method by which service contracts are awarded and which will remain a fundamental procedure of the NOC’s business plan through 2025. Under this scheme, promoted by the current administration to ensure fair process, PEMEX maintains ownership of the assignment, while the private contractor provides the capital and operating expenses to develop the area. Since PEMEX holds the entitlement of the assignment, the NOC is therefore responsible for complying with regulations and environmental obligations set by the authorities, while the service provider performing the E&P activities must attend to decommissioning and remediation. 

The service provider’s final payout is overseen by a management fund set up by PEMEX which takes a percentage of the cash flow available and factors in total project revenue, taxes and government fees, as well as the costs of hydrocarbons conditioning, transportation and labor. The NOC has stated previously that it expects to tender a total of 35 CSIEE projects from 2021 to 2025, ensuring that these projects remain attractive to the stringent terms set by banks and investment funds.