Market Note 210 Glossary of CNH Model Contract for Round 1.2
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MEI Market Note No. 210 Houston, September 24, 2015 Glossary of CNH Model Contract for Round 1.2 Most of the technical vocabulary is carried over from Round 1.1 M OST OF THE TECHNICAL VOCABULARY from the model contract that served as the basis for the first public auction that was held by the Hydrocarbon Commission (CNH) on July 15, 2015, was carried over to the final model contract, dated August 25, 2015, to be used in the second auction scheduled for September 25 (see insert). From our database of more than 1,700 terms, we identified some three dozen terms or definitions that are new to the August 25th version of the contract. Roughly 120 terms and definitions are common to both auctions. These terms are sorted by the respective auction and then alphabetically, and we have provided provisional English translations for each term (Table 1). . Looking into the substantive matters of the model contract, we continue to find problematic issues: 1) The contract should state categorically that the “nuclear option” of administrative rescission will not be applied in response to a single event (noting that BP did not lose its license on account of the Macondo accident). 2) At variance with the statement of Energy Minister Coldwell at an industry conference held in Mexico City on August 18th, which was that operators will have the complete geological column included in their contracts, there are vertical restrictions in three of the blocks: Tecoalli‐B, Hokchi‐B and Nak. The presence of such limits will make qualified bidders hesitate to make offers. 3) The contract specifies that “no property rights are conveyed by the contract” (Art. 21.4). The contract does provide the contractor with the right to compensation for specified expenses and a share of the proceeds from production. Such benefits may be understood to be “property rights” in relation to mineral contracts. In Round 1.1, such rights belong to the Mexican State, but in Round 1.2 (as if to clarify matters) they belong to the Mexican Nation. 4) Operators should be given freedom to report their discoveries in Mexico in physical units. 5) In Round 1.1, the government was embarrassed by the outcome that resulted from the absence of the provision for a technical tie (as happened with Block #7, where the difference between the bids was less than 1%). The definitions applicable to Round 1.2 do not include this provision. George Baker Publisher _______________________________________________________________________________________________________ _ [email protected] MEXICO ENERGY INTELLIGENCE® ISSN 2380‐6400 Page 1 of 8 Table 1 WORKSHEET FOR PROOFING TRANSLATION Terminology of CNH Round 1.2 # Rec. ID Article Lexical Entry Translation (trial) Ronda 1 | 2nd Convocatoria - Bases de la licitación CNH-R01-L02/2015 (Consorcio) 1 1758 1.1 Abandono (Round 1.2) Abandonment 2 1783 25.5 Arbitraje Arbitration 3 1761 1.1 Costos Elegibles Eligible costs 4 1762 1.1 Costos Recuperables Recoverable costs 5 1763 1.1 Daños Preexistentes Preexisting environmental damage 6 1787 21.4 Derecho de Terminación Right of termination 7 1764 1.1 Etapa de Transición de Arranque Transitional start-up stage 8 1765 1.1 Etapa de Transición Final Final transition stage 9 1766 1.1 Evaluación de Impacto Social Social Impact Study 10 1781 25.3 Experto Independiente Independent expert 11 1768 1.1 Interés de Participación [Ronda 1.2] Participating interest (%) 12 1759 1.1 Límite de Recuperación de Costos [Ronda 1.2] limit of cost recovery 13 1769 1.1 Materiales Muebles Matériel (as distinct from real estate) 14 1793 Annex 10 Modelo de Garantía de Cumplimiento Model of a performance guarantee 15 1791 21.4 No Otorgamiento de Derechos de Propiedad [Ronda 1.2] Non-conveyance of property rights 16 1784 25.7 No Suspensión de Actividades Petroleras Non-suspension of oilfield operations 17 1772 1.1 Período Inicial de Evaluación [Ronda 1.2] Initial evaluation period 18 1773 1.1 Presupuesto Budget 19 1774 1.1, Annex 4 Procedimientos de Contabilidad Accounting procedures 20 1794 11 Procura de Bienes y Servicios Procurement of goods and services 21 1786 21.3 Prórroga del Plazo del Contrato Extension of the contract period 22 1785 21.3 Prórroga del Programa de Trabajo Extention for period of Work Program 23 1778 1.1 Reglamento CNUDMI UN regulation for the resolution of international commercial disputes 24 1782 22.1, 25.2, Rescisión administrativa [Ronda 1.2] Administrative rescission 25 1777 1.1 Subproductos By-products, co-products [email protected] 9/24/2015 1 Table 1 WORKSHEET FOR PROOFING TRANSLATION Terminology of CNH Round 1.2 # Rec. ID Article Lexical Entry Translation (trial) 26 1792 30 Totalidad del Contrato Totality of the Contract 27 1795 Annex 13 Uso Compartido de Infraestructura Shared use of infrastructure BASES DE LA LICITACIÓN CNH-R01-L03/2015 28 1278 1.1 Abandono Abandonment 29 1279 1.1 Actividades Petroleras Life-cycle oil field actvities 30 1280 1.1 Agencia Agencia for Industrial Safety and Environmental Protection (ASEA) 31 1281 1.1 Almacenamiento Storage 32 1282 1.1 Año Year 33 1283 1.1 Año Contractual Contractual year 34 1396 31.1 Anti-corrupción Anti-corruption standard 35 1284 1.1 Aportación Anual Annual contribution 36 1285 1.1, 2.2 Área Contractual Contractual Area 37 1286 1.1 Autoridad Gubernamental Government agency 38 1287 1.1 Barril Barril 39 1288 1.1 Bases de Licitación Auction documentation 40 1389 2.6 Cambio de Operador Change of operatorship 41 1289 1.1 Campo Field 42 1290 1.1 Caso Fortuito o Fuerza Mayor Force majeure 43 1393 23.1 Cesión Change of rights, obligations or ownership 44 1394 25.2 Conciliación Dispute resolution 45 1291 1.1 Condensados Condensates 46 1292 1.1 Contraprestación Payment (in cash or in kind) 47 1294 1.1 Contraprestación del Contratista Payment in kind to Contractor 48 1293 1.1 Contraprestación del Estado Cash payments to the State 49 1295 1.1 Contratista Contractor 50 1296 1.1 Contrato Contract [email protected] 9/24/2015 2 Table 1 WORKSHEET FOR PROOFING TRANSLATION Terminology of CNH Round 1.2 # Rec. ID Article Lexical Entry Translation (trial) 51 1297 1.1 Control Control 52 1298 1.1 Convocatoria Auction 53 1299 1.1 Costos Costs 54 1300 1.1 Cuenta Operativa Operating account 55 1301 1.1 Cuota Contractual para la Fase Exploratoria Fee payable during exploratory phase 56 1387 2.2 Derechos de Propiedad Property rights 57 1302 1.1 Descubrimiento Discovery 58 1390 3.5, 6.1 Devolución Relinquishment 59 1303 1.1 Día Calendar day 60 1304 1.1 Día Hábil Working day 61 1305 1.1 Documentos Técnicos Technical documentation 62 1306 1.1 Dólares U.S. dollars 63 1307 1.1 Empresas Participantes Participating companies 64 1308 1.1 Evaluación Evaluation 65 1309 1.1 Extracción Production life-cycle of an oil well 66 1310 1.1 Fecha Efectiva Effective date of contract 67 1311 1.1 Fideicomiso de Abandono Escrow account for abandonment 68 1312 1.1 Filial Affiliate 69 1313 1.1 Fondo Oil Fund 70 1314 1.1 Garante Guarantee of corporate parent 71 1315 1.1 Garantía Corporativa Corporate guarantee 72 1316 1.1 Garantía de Cumplimiento Performance guarantee 73 1317 1.1 Garantía de Cumplimiento Inicial Guarantee of initial performance 74 1318 1.1 Garantía del Período Adicional Guarantee for additional period 75 1319 1.1 Gas Licuado de Petróleo LPG 76 1320 1.1 Gas Natural Natural gas 77 1321 1.1 Gas Natural Asociado Associated natural gas 78 1322 1.1 Gas Natural No Asociado Non-associated natural gas [email protected] 9/24/2015 3 Table 1 WORKSHEET FOR PROOFING TRANSLATION Terminology of CNH Round 1.2 # Rec. ID Article Lexical Entry Translation (trial) 79 1324 1.1 Hidrocarburos Petroleum, natural gas, natural gas liquids and methane hidrates 80 1323 1.1 Hidrocarburos de Autoconsumo Hydrocarbons for self-use 81 1325 1.1 Hidrocarburos en el Subsuelo Hydrocarbons in the subsurface 82 1326 1.1 Hidrocarburos Netos Net (hydrocarbon) production 83 1327 1.1 Hidrocarburos Producidos Total hydrocarbons produced 84 1397 32 Idioma Contract language 85 1328 1.1 Incremento en el Programa Mínimo Increase in the minimum work commitment 86 1400 4.4 Incumplimiento del Programa Mínimo de Trabajo Non-compliance with Minimum Work Program 87 1424 28.2 Información pública Public information 88 1329 1.1 Información Técnica Technical information 89 1419 7 Instalaciones Facilities; infrastructure; installations 90 1330 1.1 Instalaciones de Comercialización Midstream infrastructure 91 1331 1.1 Instalaciones de Recolección Gathering lines (and related infrastructure) 92 1414 2.3, 24 Interés de participación (%) [Ronda 1.1] Equity interest of participant (%) 93 1332 1.1 Inventario de Activos Inventory of materials 94 1333 1.1 Ley de Hidrocarburos Hydrocarbon Act of 2014 95 1334 1.1 Materiales Matériel 96 1335 1.1 Mecanismo de Ajuste R Factor 97 1336 1.1 Mejores Prácticas de la Industria Best practices 98 1337 1.1 Mes Calendar month 99 1338 1.1 Metodología Methodology for measuring national content 100 1386 2.1 Modalidad Licencia License agreement 101 1418 5.3, 5.4 Modificaciones al Plan de Desarrollo por Parte de la CNH CNH right to modify contractor development plan 102 1339 1.1, 2.1, 4.1, 8, 9.2, 11-28 Normatividad Aplicable Applicable legal dispositions [email protected] 9/24/2015 4 Table 1 WORKSHEET FOR PROOFING TRANSLATION Terminology of CNH Round 1.2 # Rec. ID Article Lexical Entry Translation (trial) 103 1340 1.1 Notificación de Continuación de Actividades Notification of continuation of activities 104 1341 1.1 Obligaciones de Carácter Fiscal Fiscal obligations 105 1342 1.1 Obstáculos a la Continuación de la Perforación Obstacles to the continuation of drilling 106 1343 1.1, 2.5 Operador Operator 107 1344 1.1 Partes Parties [to a contract] 108 1421 9.1 Perforación de Pozos Well plan authorization 109 1345 1.1 Período Period of a month 110 1346 1.1 Período Adicional de Evaluación Additional period for appraisal 111 1349 1.1 Período de Desarrollo Development Period 112 1347 1.1 Período de Evaluación Evaluation period 113 1348 1.1 Período Inicial de Evaluación Initial Evaluation Period 114 1350 1.1 Persona Person (physical or corporate) 115 1351 1.1 Petróleo Crude oil 116 1352 1.1 Petrolíferos Refined products 117 1353 1.1 Petroquímicos Basic Petrochemicals (understood in Mexico as natural gas liquids) 118 1354 1.1 Plan de Desarrollo Development Plan 119 1355 1.1 Plan de Evaluación Evaluation Plan 120 1356 1.1, Anex 5 Plan de Transición de Arranque Start-up Plan 121 1357 1.1 Plan de Transición por Terminación Contract Termination Plan 122 1398 3.2 Plazo Contract Period 123 1358 1.1 Pozo Well 124 1359 1.1 Precio Contractual Contract Price 125 1360 1.1 Primer Plazo Adicional 1st Additional Period 126 1362 1.1 Procedimientos de Contabilidad Accounting procedures 127 1363 1.1 Procesamiento de Gas Natural Natural gas processing 128 1364 1.1 Producción Comercial Regular Regular commercial production 129 1365 1.1 Programa de Administración de Riesgos Risk management program [email protected] 9/24/2015 5 Table 1 WORKSHEET FOR PROOFING TRANSLATION Terminology of CNH Round 1.2 # Rec. ID Article Lexical Entry Translation (trial) 130 1775 1.1 Programa de Trabajo [Ronda 1.2] Work program 131 1366 1.1 Programa Mínimo de Trabajo [Ronda 1.1] Minimal Work Program 132 1395 28.1, 28.2 Propiedad intelectual del Contratista Intellectual property of contractor 133 1367 1.1 Propuesta Winning offer 134 1399 3.3 Prórroga Extension of contract period 135 1416 4.5 Pruebas de Formación Test well notification 136 1368 1.1 Puntos de Medición Measuring points 137 1369 1.1 Recolección Gathering 138 1370 1.1 Reconocimiento y Exploración Superficial Surface exploration 139 1371 1.1 Recuperación Avanzada Enhanced OIl Recovery 140 1372 1.1 Regalía Royalty 141 1373 1.1 Reglas de Mercado Market competition 142 1415 3.5, 17 Renuncia del Contratista Voluntary termination of contract 143 1423 Annex 4, XI Reportes Reports (electronic filing) 144 1391 22.1 Rescisión Administrativa Administrative rescession 145 1392 22.2 Rescisión Contractual Contractual rescession 146 1374 1.1 Reservas Reserves 147 1388 2.4 Responsabilidad Solidaria Joint and several responsibility 148 1375 1.1 Secretaría de Hacienda Finance Ministry (SHCP) 149 1376 1.1 Segundo Plazo Adicional 2nd additional period 150 1385 1.2 Singular y Plural Singular or plural construction 151 1377 1.1 Sistema de Administración System of administration (of ASEA) 152 1378 1.1 Subcontratistas Subcontractors 153 1379 1.1 Trimestre Quarter year (3 months) 154 1380 1.1 Unidad de Trabajo Work Unit 155 1796 1.1 Unidades de Trabajo Work units 156 1420 8 Unificación Unitization (of contract areas) 157 1381 1.1 Valor Contractual de los Condensados Contract value of condensates [email protected] 9/24/2015 6 Table 1 WORKSHEET FOR PROOFING TRANSLATION Terminology of CNH Round 1.2 # Rec. ID Article Lexical Entry Translation (trial) 158 1382 1.1 Valor Contractual de los Hidrocarburos Contract value of hydrocarbons 159 1383 1.1 Valor Contractual del Gas Natural Contract value of natural gas 160 1384 1.1 Valor Contractual del Petróleo Contract value of crude oil 161 1422 Annex 4, 3.1 Verificación Verification (by Finance Ministry) 162 1425 28.2 Volúmenes de Hidrocarburos Producidos Contractor volumes [email protected] 9/24/2015 7 BAKER& ASSOCIATES,ENERGYCONSULTANTS Management consulting Industry, policy and regulatory reports A management briefing is available on the topics covered in this report. (832) 434-3928 (text/cell) Mailing Address: Box 271506 Houston TX 77277‐1506 To learn about our reporting, consult the title lists, by year or category, on http://www.energia.com, or write to us at [email protected]
