8 - mexico oil & gas market august, 2011
TRANSCRIPT
MEXICO OIL AND GAS MARKET, NEWS AND UPDATED FOR AUGUST 2011
HOW TO DO BUSINESS WITH PEMEX
Report prepared by Mr. Sergio Rivas F. INTSOK Local Advisor, Mexico
| July 30, 2011 |
© All rights reserved. Strict license restrictions apply. Distribution to third parties requires prior written consent from INTSOK.
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Table of Content Page
1 Introduction
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2 Background on internal procedures in Pemex for bids,
vendors and suppliers
3
3 Contracting Procedures Schemes
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4 Technological & Pilot Tests, a way for direct assignments
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5 CONACYT-SENER-HYDROCARBONS Fund. Niche market
for technology studies
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6
Pemex Chart Organization 9
7 Key Contacts in Pemex 10
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Conclusions 10
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1. - Introduction
To do business in Mexico in the Oil and Gas market is quite important to know how Pemex operates its contracts. This report presents some guidelines for companies
interested in Mexican market. PEMEX as public company has more and different responsabilities as in private
sector. Most of its commercial operations should be developed through open bids, local and internationals. PEMEX’s bid system is an open and transparent one: Anouncements, calls for bids, results, monitoring, should be under public access.
One of the key issues in the commercial arena with PEMEX is into the Asset, who has the main responsibility for exploration and production. Once the Asset is
convinced to implement any technological solution or any technical proposal, and having authorized budget, the rest will be under the concept “business as usual”.
Most of the contracts with PEMEX are based on local or international and open bid. To have a direct assignment is not an easy way. However, there is an important way, mainly for new and advanced technologuies: through a pilot or testing new
technologies. Networking should be concentrated into each one of the Assets in the four Regions
as PEMEX E & P is divided: North, South and two Marines. This working paper has been prepared in order to provide certain key information to
our INTSOK Partners, looking and promoting more and active participation in the Mexican Oil & Gas market.
2. – Background on internal procedures in Pemex for bids, vendors and
suppliers
On November 2008, it has been released the Law of Petróleos Mexicanos and the amended implementing Law to Article 27 of the Constitution regarding Petroleum
matters. In accordance with relevant provisions of the Oil Laws, President of Mexico had
published the Pemex Law Regulations (September 4, 2009) and Regulations for Implementing Law (September 22, 2009)
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How to do business with Pemex
National (restricted to local suppliers & vendors)
Bids
International (under commercial treaties or open)
Due to existing patent
Direct Assignment Due to a success testing new technology
Due to “emergency” conditions
Technology studies & essays Through CONACYT-SENER-
PEMEX Fund
3. – Contracting Procedures Schemes
Article 50 of Pemex Law defines that contracts in order to carry out the Acquisitions, Leasing, Works and Services related to the Core Activities of a Productive Character
will be awarded in accordance with any of the following procedures:
I. Public bidding, which should start with publication of the invitation and
concludes with the issuance of the decision or, if applicable, with the cancellation of the respective procedure;
II. Restricted invitation to at least three parties, which commences with the delivery of the first invitation, and concludes with the issuance of the decision or, if applicable, with the cancellation of the respective procedure;
and
III. Direct assignment, this starts under the estimate request and concludes
with the acceptance of the proposal.
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Regarding Public bidding, these can be:
National, in which only Mexican bidders participate.
International under the application of an international treaty, in which only
Mexican bidders and foreign bidders of countries with which Mexico has entered into a free trade agreement can participate, with provisions related to public sector purchases.
Open-international, in which Mexican and foreign bidders can participate under any of the following conditions:
a) After the prior market research done by the inviting entity, supply or
competitive conditions are lacking in the national market in respect
of the required goods, works or services. b) It is convenient in terms of price or quality. c) After a public bidding procedure of national character or international
character under treaty coverage has taken place, no solvent proposal has been submitted.
d) It is established in such manner for contracts financed with external
credit granted to the Federal Government or with its guaranty.
Participation of foreign bidders may be denied in open-international biddings, when the country in which they are nationals does not grant reciprocal treatment to
Mexican bidders, contractors, goods or services. When there were no any agreement or treaty, goods and services vendors from
foreign origin could participate in contracting procedures and under same applicable requirements to those national, if and when, in their respective countries, goods and services vendors from Mexican origin would have equal opportunities.
For each contract or group of contracts to be bid upon, Pemex or the corresponding Subsidiary Entity will publish in the Official Gazette a respective public bidding
invitation. This will include information regarding nature of the Acquisitions, Leasing, Works and Services related to the Core Activities of a Productive Character to be contracted for, as well as the scope of the contract or group of contracts. In order that
potential suppliers and contractors could have key information to make a decision, regarding their participation. Invitation will indicate place, cost and payment method to obtain bidding guidelines.
In each one of invitations, vendors and suppliers could participate individually or through a joint proposal. In the latter case, to conduct technical and economical
evaluation, capacities and experience from consortium companies as a whole will be taken into consideration.
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Steps for a Public Bidding
Bidding guidelines include:
Participation requirements
If applicable, pre-qualification requirements with the purpose of ensuring the
experience and legal, technical, financial and commercial capacity of bidders for compliance with established contractual obligations, as well as
documentation required to support them.
Contractual conditions
Terms and conditions sheets or the model contract to be entered into with the winning bidder, characteristics of required guaranties, time limits for signing and other pertinent requirements
Bidding procedure calendar
Including phases needed to integrate stages, in the understanding that terms and dates shall allow bidders the proper preparation of their offers.
Evaluation mechanisms of bidders in pre-qualification stage
If applicable, as well as the indication of the method for offers evaluation,
which may allow processes for negotiation on pricing procedures, evaluation by points and percentages, subsequent discount offers or any other means that promote competition among bidders and result in better contracting
conditions.
Procedures for modifying guidelines
Receiving comments and suggestions from potential bidders and interested parties
All other requirements deemed necessary for the development of the project.
Regarding Restricted invitation or Direct Assignment, procedure shall be justified, among other aspects and depending on the circumstances that occur in each case, by the reasons that public bidding is not convenient to ensure the best available
conditions as to the price, quality, financing and opportunity criteria and other pertinent circumstances. Reasoning for the aforementioned criteria shall always be in writing and signed by a public official holding at least the position of responsible area
manager for the execution of corresponding agreement, contract or order.
Asset defines a need
Existing budgetFeedback from
stakeholdersTo define
technical bases
To share draft on technical
bases
To release technical bases
into Official Gazzet
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4. - Technological & Pilot Tests
Pemex STE (Technical Exploitation Vice-presidency) defines as follows:
Technological test: set of activities carried out in an orderly and systematic way to
evaluate a specific technology that will be applied intensive and timely, which could result in technical and financial benefits.
Pilot Test: Involves modify rock-fluid system conditions. For its characteristics and extension, it is developed on a long period.
Pemex has defined three requirements for companies presenting their proposals for a technological or pilot test:
Company must be owner of technology, non intermediary. It would be better if there were patents. Company should demonstrate.
Technology must be presented to Pemex for first time or if it's second time, technology must be improved or innovative.
Technology must be oriented to solve a specific problem for Pemex.
If a company requests a technological test, it should first provide detailed information
on expected results then, Pemex shall be informed what is expected from this technology. It is crucial that companies be clear what they offer, because this will be used for Pemex as evaluation criteria for testing.
Technological test is appropriate when it’s not a macro project. If test requires more than 90 days, numerous procedures and complexity will be involved and then it
should be considered as a pilot test.
A company should consider investment requirement to develop and implement this
procedure test, as its promotion expenditures. If technology solves a real problem for Pemex, company can recover those expenditures with signing one or more contracts with Pemex.
Pemex will approve a technological test, if this could add value to their process.
It is possible to request and to have a technology test, if:
a) It has been requested from an Exploration or Exploitation Asset.
b) A company has been invited from PEMEX. c) A proposal from owner of a specific technology
Once request had been received PEMEX will take 15 days to define if a technology proposed has enough characteristics to be considered as a potential technological
test or not. PEMEX will revert with conclusions and proposal to technology owner company, regarding how to continue or not, into this process.
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Steps for test
5. - CONACYT-SENER-HYDROCARBONS Fund
CONACYT-SENER Fund is focus on scientific and technological research applied to exploration, exploitation and refining of hydrocarbons, as well as the chemical
production, also including adoption, assimilation and innovation and technological development in specific areas.
Participants must have infrastructure capability to develop R & D activities, expertise in hydrocarbons, knowledge of technical operation and research on hydrocarbons sector; experience in development of bibliographic research projects and databases
related to scientific and technological research, as well. Based on the Fiscal reform for Pemex on 2005, was created the Fund for Scientific
and Technological Research, under the aim to allocate economic resources to those areas to encourage oil development.
Under 2007 reform, it has been allocated economic resources and settled different funds, as follows:
CONACYT-SENER-Hydrocarbons Fund
Human Resources
Research & Technology Development of the Mexican Petroleum Institute
CONACYT-SENER-Sustainability
On 2012, the government has calculated to allocate 530 to 650 million dollars, to R & D, through this mechanism.
Steps for a CONACYT-SENER-HYDROCARBONS Fund Call
MOU signature between Pemex and
the company
Deliver of technical-financial
Proposal
Agreement formalization to
execute test
Test development under established
program and monitoring of the
STE
Technology need is defined
Committee To callTo define
local partner
To present proposal to CONACYT
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6.- Pemex Chart Organization
To focus a promotion and development commercial work into PEMEX, it is
important to know who is who. Regions, Assets, Drilling, Pipelines, Technology
area would be considered as the key line to develop networking.
Regions
Assets
North
Chicontepec
Poza Rica Altamira
Burgos
Veracruz
South
Cinco Presidentes
Samaria-Luna
Muspac
Macuspana
Belota-Jujo
North East Marine
Cantarell
Ku Maloob Zaap
South West Marine
Litoral de Tabasco
Abkatun Pol Chuc
Regional Management
Planning
Administration
HSE
Construction
Pipelines
Drilling
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7. - Key Contacts in Pemex
8. – Conclusions As many companies, Pemex has its own rules to do business.
In order to have best opportunities to work with it, this report has presented some guidelines to do it.
Mexican market has potential, however, it is important develop a deep and permanent work, promoting and doing networking.
We could recommend to be present with PEMEX promoting new solutions, technologies, business win to win concept, into the following areas: in each one of
the four regions, depending on the product or service, including their Assets, for Exploration and Exploitation, specific for reservoir studies, field developments, infrastructure and facilities construction, water separation, among others. On
Pipelines VP, when compressor systems, pipelines, valves, pumps. In drilling, for wells construction, maintenance and repairs, waste deposit.
Planning
Gustavo Hernández
New Business Models
Sergio Guaso
Finances
Ernesto Estrada
HSE
Rodolfo Morando
Drilling
Javier Hinojosa
Exploration Technology
Antonio Escalera
Exploitation Technology
Pedro Silva
Logistic
Mario Abreu
Pipelines
Jesús Hernández San Juan
North Region
Juan Arturo Hernández
South Region
Vinicio Suro
North East Marine Region
José Serrano
South West Marine Region
José Luis Fong
Pemex Exploration
and Production
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The New Business Model in HQ could be considered as an horizontal line looking for innovative and new business model, including assigments for blocks, economic incentives and new ways to have business, under the win to win philosophy.
To have a good presence with Planing VP, it could contribute to have a permante and comprehensive panorama on trends, business opportuinities into PEMEX E & P.
Once a business opportunity would be identified, the follow up should be done into regions and assets.
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This report was prepared by:
Sergio Rivas F.
Office: +52 55 10 56 08 05
Mobile: +52 1 55 18 00 14 16
Mobile: +52 1 55 59 09 68 15
Please feel welcome to contact Sergio Rivas F. (E-mail: [email protected]) for any questions concerning this report.
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