1. Mexican Association of Oil Companies
NOIA
October 2017
Introduction of myself: Raymundo Piñones, Engineer by background, 12 years in the industry, roles in the UK, Denmark and the Persian Gulf, and now the first director of AMEXHI
Disclaimer: whatever I say does not necesarily represents the opinión of any single oil Company
Some of the infogrpahics are in Spanish
Focus on E&P activities as proxy for Business opportunities

2. Content Challenges Upcoming Today Past AMEXHI Who is AMEXHI?
Quick recap of what has happened in Mexico
New? Where are we coming From?
Round Zero
Round 1
Part of Round 2 (where you left off past NOIA conference, and that my friend Helge elocuently presented)
The New Mexican Energy Model?
Regulators
Upcoming opportunities
Round 2.4
Round 3
Five-year plan
Bilateral Challenges to the Industry
NAFTA Renegotiation
Mexican Navigation Law vs. Jones Act
Policy Outstandings (not really bilateral)

3. AMEXHI Challenges Upcoming Today Past AMEXHI Spend 1 minute Challenges

4. Who is AMEXHI?
AMEXHI the association of upstream operators & investors whose objective is to invest in exploration and production projects in Mexico.
Arises from the need for an interlocutor between government and industry and its objective is to share best practices towards a safe, responsible and sustainable upstream industry in Mexico.
AMEXHI aims to create a forum to promote the common interests of hydrocarbon companies in Mexico with the highest ethical standards.
The association was founded on 26 February 2015 in Mexico City.
It is a non-profit organization.
Asociation of upstream companies
Interlocutor between governemnr and industry
Rises from the Reform of 2013
Defend interests as a Group, and promote safe, secure, transparent and sustainable practices
Non Profit
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AMEXHI

5. Our Members
47 members many represented in here, and the companies in the panel represented
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6. AMEXHI´s companies worldwide
Norway
(1)
China
(1) UK
(4)
Netherlands
(1)
Russia
(1)
Canada (2)
USA (10)
Mexico (13)
Colombia (2)
Japan (1)
Australia (1)
Brazil (1)
Argentina (2)
Malaysia (1)
Relvance is what it means to the government to interact with AMEXHI
Bring real International experience
Ability to provide comments based on 100+ years of experience
Portugal
(1)
Spain
(1)
France
(1)
Germany
(1)
Italy
(1)
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7. AMEXHI Around the World
facilitating the learning curve of the government institutions
Miembros de AMEXHI con operaciones
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8. AMEXHI’s global experience
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9. What has happened so far?
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The milestones achieved so far as well as the history
Run over the Rounds so far that took place before April 2017 (past NOIA)
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10. Background on the NMEM 1993 NAFTA 1993 Petrochemical Reform 1996
Electricity Reform
2008
Hidrocarbons
Reform
New Mexican Energy Model
Dec 2013
Energy Reform enactment
Dec 2014
Call for bid
R1.1
Mar 2015
ASEA starts operations
Jul 2015
Bidding day
R1.1
Sept 2015
Bidding day
R1.2
Dec 2015
Call for bid
R1.4
Aug 2016
Call for bid
R2.2
Nov 2016
Mexico joined EITI
Mar 2017
5 Year Plan
Presentation
Jul 2017
Bidding day
R2.2&2.3
Sept 2017
Call for bid
R3.1
Aug 2014
Secondary laws are enacted
(9 new laws and 12 laws changed)
Feb 2015
Call for bid
R1.2
May 2015
Call for bid
R1.3
Sept 2015
CNH signs first contracts with private companies
R1.1
Dec 2015
Bidding day
R1.3
Jul 2016
Call for bid
R2.1
Nov 2016
Call for bid
R2.3
Dec 2016
Bidding day
R1.4
Jun 2017
Bidding day
R2.1
Jul 2017
Call for bid
R2.4
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11. Round Zero
Meant to provide context, as you know we have our Mexican NOC
This is what was assigned to Pemex as Round Zero
Focus on numbers all requested in terms of resources and 68 of requested of prospective
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12. Round 1.1 Shallow water
Shared Production Contracts for the Exploration and Extraction of Hydrocarbons
Awarded areas (2/14)
Fly over the old rounds as they are not news to you any more
The first ever tender for upstream projects in Mexico
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AMEXHI

13. Round 1.2 Shallow water
Shared Production Contracts for the Extraction of Hydrocarbons
Awarded áreas (3/5)
Point on learning from authorities
No longer news
The Mexican government adjusted the awarding procedure
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14. Round 1.4 Deep Water
License Agreements for the Exploration and Extraction of Hydrocarbons
No longer news
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AMEXHI

15. Round 2.1 Key Figures 15 Contractual áreas (10 awarded – June 2017)
Estimated USD 750 million investment / area
Average area: 600 km2
Prospective resources: 1.6 bn boe
Contract duration:
Exploration: 4-6 years
Evaluation: 2 years
Development years
National Content
15% during Exploration
17% during Evaluation
26%-35% during Development
Somehow news it happened already but after the past NOIA
10/15 awarded with expected investments of USD 750 million / area
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16. Round 2.1 Shallow Water
Shared Production Contracts for the Exploration and Extraction of Hydrocarbons
No longer news
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AMEXHI

17. Today – The New Mexican Energy Model
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Part is here, because regulation has just been completed and this is the world created
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18. Structure of Ministries & Regulators
Bank of Mexico
Mexican Oil Fund
Executive Branch
Secretaries
(Ministries)
SENER (Energy Ministry)
ASEA
(Safety & Environment Protection Agency)
SHCP (Treasury)
SEMARNAT
(Environmental Ministry)
CONAGUA
(water use)
SEMAR (Navy)
Descentralized
Entities
CENACE (Electricity Market)
CENAGAS (Gas Market)
Intention to show how it is in the end a rather complex system,
effort of the legislators to créate a model based on checks and balances and with segregation of duties among regulators.
These are the entities oil companies somehow report to or have some sort of interaction
State Owned
Productive Companies
PEMEX
Policy makers
Regulators
Operational control
Operators
Financial Entity
CFE
Coordinated Independent Regulators
CNH (Upstream)
CRE
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19. Upcoming E&P Opportunities
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And this is what is coming during the upcoming 6 months
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20. Round 2.4 Key Figures 29 Contractual areas
Expected invesments USD 135 bn
Average area: 2,290 km2
Prospective resources: bn boe
Contract duration:
Exploration: 4-10 years
Evaluation: 3 years
Development years
National Content
3% during Exploration
4% during Evaluation
10% during Development
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21. Round 2.4 – Deep water
License Agreements for the Exploration and Extraction of Hydrocarbons
29 Bidding areas to be awarded in January 31st, 2018
64%
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22. Round 3.1 Key Figures 35 Contractual areas
Estimated USD 1.1 bn investment / area
Average area: 750 km2
Prospective resources: 2.0 bn boe
Contract duration:
Exploration: 4-8 years
Evaluation: 2-3 years
Development years
National Content
15% during Exploration
15% during Evaluation
26%-35% during Development
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23. Round 3.1 – Shallow water
Shared Production Contracts for the Extraction of Hydrocarbons
35 Bidding áreas to be awarded in March 27, 2018
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24. SENER - Five Year Plan (2017)
Deep water
Shallow waters
Conventional onshore
Unconventional onshore
Areas in tender
Awarded areas
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25. Bilateral Industry Challenges
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I will briefly speak about
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26. NAFTA Renegotiation
After Mexico’s Energy Reform, NAFTA itself enabled much of the investment attraction, infrastructure development and a more intensive commercial exchange. The synergy between NAFTA and the Energy Reform in Mexico is essential to attract investments, develop integrated value chains and increase North America’s economic competitiveness”. - A. De la Fuente-Chairman of the BOD of AMEXHI
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27. NAFTA Renegotiation Principles
NAFTA do no harm as pre-requisite
Trilateral in nature
Maintain tariff elimination
Liberalized trade of hydrocarbons and products
Rules of Origin
Mobility of infrastructure and personnel
Regulatory coherence
Principles for upstream
Trade déficit is not really a consequence of trade policy
Current account deficit (trade and services balances) is
the result of macroeconomic balances, namely
the difference between aggregate income and
aggregate spending. Between 1993 and 2011,
while net private savings went from 4.7% of GDP
to 7.6%, the fiscal deficit almost doubled from 5.9
to 10.7%
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28. Efficient offshore operation looks like?
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29. Jones Act (US) and The Navigation and Maritime Trade Law (MX)
Merchant Marine Act of 1920 (Jones Act)
Ley de Navegación y Comercio Marítimo
US Owner
Mexican Owner
US Flag
Mexican Flag
US Crew
Mexican Crew
US Built
Mexico Built Encouraged
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30. Policy Outstandings Unitization
Implementation of unconventionals regulation
Continuous improvement
Onshore social licence
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31. Mexico 2040

32. Thank you!
Raymundo Piñones de la Cabada Director General