URUGUAY ROUND 3 - Mining Press ·  · 2017-09-21from 1970 to 1982 • Lobo and Gaviotin wells ......

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URUGUAY ROUND 3 BIDDING ROUND TERMS AND MAIN FEATURES OF CONTRACT MODEL HOUSTON, 18 TH OF SEPTEMBER 2017 M. ENG SANTIAGO FERRO EXPLORATION & PRODUCTION ANCAP

Transcript of URUGUAY ROUND 3 - Mining Press ·  · 2017-09-21from 1970 to 1982 • Lobo and Gaviotin wells ......

Page 1: URUGUAY ROUND 3 - Mining Press ·  · 2017-09-21from 1970 to 1982 • Lobo and Gaviotin wells ... Uruguay Round 3 ... Petroleum Geology of Uruguay Report, Complementary Study to

URUGUAY ROUND 3 BIDDING ROUND TERMS AND MAIN FEATURES OF

CONTRACT MODEL

HOUSTON, 18TH OF SEPTEMBER 2017

M. ENG SANTIAGO FERRO

EXPLORATION & PRODUCTION

ANCAP

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Index

• General Features

• Qualification of Oil Companies

• Database

• Offers Comparison

• Final Remarks of the bidding process

• Contract Model

• Final Remarks

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Index

• General Features

• Qualification of Oil Companies

• Database

• Offers Comparison

• Final Remarks of the bidding process

• Contract Model

• Final Remarks

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Purpose

ANCAP is calling Oil Companies interested in carrying out exploration and exploitation of Hydrocarbon activities in the República Oriental del Uruguay Economic Exclusive Zone, under Production Sharing Agreements

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Schedule

ACTIVITY DATE

Official Announcement 18 September 2017

Submission of Intention Letter and

documents for the Qualification of Oil

Companies.

From 18 September 2017 to 6 April

2018

Notification of Qualification of Oil

Companies Until 13 April 2018

Inquiries and clarifications Until 13 April 2018

Answers to Inquiries and

clarifications. Until 20 April 2018

Submission of proposals. From 22 April 2018 to 26 April 2018

at 14:00, Local time.

Opening of proposals. 26 April 2018 at 15:00, Local time.

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Promotion Activities

HOUSTON Official Announcemnt 18/9 Data Rooms: 18/9 – 23/9

SEG ANNUAL MEETING HOUSTON

24/9 – 29/9

AAPG ICE LONDON

15/10 – 18/10

LONDON Road Show: 20/10 Data Rooms: 18/10 – 24/10

HOUSTON Presentation at IAPGH Meetings and Data Rooms

November 2017

NAPE WINTER SUMMIT HOUSTON

5/2/18 – 9 /2/18

APPEX GLOBAL 2018 LONDON

27/2/18 – 1/3/18

MONTEVIDEO Meetings and Data Rooms to be arranged at any time

with ANCAP. 18/9/17 – 20/4/2018

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Offered Areas AREAS TYPE I

AREAS TYPE II

AREAS TYPE III

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General Conditions

• Only qualified companies may submit offers. • Qualified companies might submit offers for a maximum of

4 areas as operators. • The proposals are independent for each area • Offers in Spanish (except for technical documents and/or

annual reports that may be submitted in English) • e-mail: [email protected] • ANCAP is the only one to interpret the Bidding Round

Terms. • Purchasing Bidding Round Terms: 5.000US$ • If a Consortium submit offers, the Operator must qualify on

Technical aspects, and participate with a minimum of 40%.

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Index

• General Features

• Qualification of Oil Companies

• Database

• Offers Comparison

• Final Remarks of the bidding process

• Contract Model

• Final Remarks

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Legal Aspects

• Documents proving the existence and representation of the company.

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Financial Aspects

For Exploration Only • Average Equity of the last 3

years greater than: – 100MMUS$ for areas Type I – 200MMUS$ for areas Type II – 300MMUS$ for areas Type III

to qualify and be able to offer for one Area.

• Additional Equity of – 25MMUS$ for areas Type I – 50MMUS$ for areas Type II – 100MMUS$ for areas Type III

for each additional Area.

For Exploration and Production • Top 100: Ranking The World’s Oil

Companies, or • Average Equity of the last 3 years

greater than: – 200MMUS$ for areas Type I – 400MMUS$ for areas Type II – 600MMUS$ for areas Type III

to qualify and be able to offer for one Area.

• Additional Equity of – 50MMUS$ for areas Type I – 100MMUS$ for areas Type II – 200MMUS$ for areas Type III

for each additional Area.

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Technical Aspects (for Operators only)

AREA FOR EXPLORATION ONLY FOR EXPLORATION AND PRODUCTION

Areas Type I

• Top 100 with international operations experience, or

• Offshore operations, and • International operations experience.

• Top 100 with international operations experience, or • Average production of 500 BOE/day during the last 3

years • Offshore operations, and • International operations experience for more than 5

years.

Areas Type I and

Areas Type II

• Top 100 with international operations experience, or

• Offshore operations at a higher water depth of 200m, and

• International operations experience.

• Top 100 with international operations experience, or • Average production of 2000 BOE/day during the last 3

years • Offshore operations at a higher water depth of 200m,

and • International operations experience for more than 5

years.

Areas Type I, Areas Type II

and Areas Type III

• Top 100 with international operations experience, or

• Offshore operations at a higher water depth of 2000m, and

• International operations experience.

• Top 100 with international operations experience, or • Average production of 5000 BOE/day during the last 3

years • Offshore operations at a higher water depth of

2000m, and • International operations experience for more than 5

years.

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Results of the Qualification Process

• Company submits documentation for ANCAP’s review to be considered qualified as (operator / non operator), for Areas Type (I / I and II / I, II and III), for the (Exploration Period / Exploration and Exploitation Periods).

• Only qualified companies can submit offers and can do it only under the conditions they have been qualified.

• Legal issues: qualifies or not • Financial issues: qualifies for E&P, qualifies for exploration only or

doesn’t qualify. In case the company qualifies, ANCAP will inform the number of Areas for which the company may submit offers (according to its average Equity).

• Technical issues: qualifies as operator for all areas, qualifies as operator for areas Type II and Type I, qualifies as operator for areas Type I, for E&P or for exploration only, or not qualifies as operator.

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If a company that qualified for exploration only makes a commercial discovery…

• A discovery is made • Submit appraisal program for approval • Execute appraisal program • Contractor decides to declare commerciality of the

discovery (or not) • To be able to do the declaration of commerciality and

delimit the Exploitation Lot, the company needs to: – Prove that fulfills by itself at the moment of declaration of

commerciality the requirements set today in the bidding round terms for qualification for E&P contracts as operator

– Farm out at least 40% to a company that fulfills such requirements

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Index

• General Features

• Qualification of Oil Companies

• Database

• Offers Comparison

• Final Remarks of the bidding process

• Contract Model

• Final Remarks

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Available database

Data that can be licensed directly from ANCAP

• Legacy Datapackage

• UR07 2D Seismic

• UR08 2D Seismic

• UR2011 2D Seismic

• UR3D Seismic

Data that can be licensed from Service Companies • AGI

– Micro seeps detection program

• CGG / ROBERTSON – 2 Geological Reports

• ION – UruguaySPAN 2D Seismic – Uruguay Repro 2D Seismic

• PGS – UR12 3D seismic

• Schlumberger / FIT – Fluid Inclusions in Lobo and Gaviotin

• Schlumberger – Advanced processing ofUR2011 2D Seismic

• Spectrum – UR02 2D Seismic – UR13 2D Seismic – UR14 2D Seismic

• TGS – Well logs

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From ANCAP

Legacy Datapackage

• 12000Km of 2D Seismic from 1970 to 1982

• Lobo and Gaviotin wells Reports and Logs

• 3 Lines of UR2011 2D Seismic

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From ANCAP

UR07 UR08

UR07: 7125 Km UR08: 2909 Km

• Acquired by Wavefield Inseis, ANCAP Operator • Processed by Geotrace, PSDM only • Gravimetry and Magnetometry

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From ANCAP

UR 2011

• 6293,6 Km

• Operator ANCAP

• Acquired by Reflect Geophysical

• PSTM and PSDM

• Gravimetry and Magnetometry

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From ANCAP

UR 3D

• Acquired in 2013

• 2074 Km2 FF

• Operator YPF

• Acquired and Processed by Western Geco

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From Amplified Geochemical Imaging

PROGRAM FOR THE MICRO-SEEPS DETECTION OF HYDROCARBONS INTO SEDIMENT SAMPLES OFFSHORE

Contact Details

• Amelia de Coster

[email protected]

• Mark Arnold

[email protected]

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From CGG

Geological Reports

• South Atlantic Petroleum Geological Evaluation – Uruguay Report (2012)

• Petroleum Geology in Uruguay: Complementary Study of Pelotas, Laguna Merín and Punta del Este Basins (2014)

Contact Details

• Thomas Graf

[email protected]

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From Schlumberger / FIT

Punta del Este Basin, Uruguay Fluid Inclusion Stratigraphy (FIS) Study

• A Charge Potential Evaluation of 2 wells with GCMS / CSIA module

• RESULTS – Present and Past Distribution of

Petroleum – Petroleum Type and Quality – Proximal Undrilled Pay & Bypassed

Pay – Seals – API Gravity – Evidence for Bacterial/Thermal

Alteration – Reservoir Compartments – Petroleum Source and Maturity

Contact Details

• Don L. Hall

[email protected]

• Douglas Langton

[email protected]

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From Schlumberger

Advanced data interpretation • Angle stacks

• Seismic AVO attributes: gradient (G), intercept (P), product (P×G)

• ISIS suite of reservoir characterization technology full-stack relative inversion: acoustic impedance (AI)

• Horizons interpretation

• ISIS simultaneous AVO inversion: AI, Vp/Vs, density (RHO)

Contact Details

• Fernando Álvarez

[email protected] • http://www.multiclient.slb.com/south-

america/uruguay.aspx

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From Spectrum

UR2002, 1840Km 2D seismic UR13, 3200Km 2D seismic UR14, 3740Km 2D seismic

Contact Details

• Gladys Reyes

[email protected]

• http://www.spectrumgeo.com/seismic-data-library/multi-client-library/interactive-map?region=south-america

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New Data that might be available for Uruguay Round 3

• There are some other multiclient contracts in pre-acquisition phase, with products that might be available in the next months.

• If ANCAP receives other information due to relinquishment of contracts in force, ANCAP will make public the technical characteristics of such data, their value in Working Units and its price.

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Index

• General Features

• Qualification of Oil Companies

• Database

• Offers Comparison

• Final Remarks of the bidding process

• Contract Model

• Final Remarks

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Offers Comparison

321 ScoreScoreScoreTotalScore

maxmaxmax

1 *40*40*20X

X

UT

UT

A

AScore

'

max

'

maxmax

2 *40*40*20X

X

UT

UT

A

AScore

maxmaxmax

3 *40*40*20G

G

X

X

UT

UT

A

AScore

For Oil ºAPI >25

For Oil ºAPI < 25

For Natural Gas

WEIGHTING FACTOR OF OFFERS TERMS

TERM WEIGHING FACTOR

Maximum Percentage of Association 20%

Committed Exploratory Program 40%

Increase of Profit Oil for the Uruguayan State 40%

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% ANCAP’s Association

• The bidding company must propose the maximum ANCAP’s association percentage, in the range between 20% and 40%.

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UT: Unidades de Trabajo (WU: Working Units) Committed Exploratory Program (PEC)

WELLS WATER DEPTH (m) VALUATION (UT)

Type 3 and Stratigraphic More than 500 30.000 UT

Type 2 100 to 500 20.000 UT

Type 1 Less than 100 10.000 UT

NEW EXPLORATORY WORK VALUATION (UT)

3D Seismic 2,0 UT/Km2

2D Seismic 0,1 UT/Km

Electromagnetism 10,0 UT/receptor

Geochemistry on seabed samples 3,0 UT/recovered sample

SPECIAL PROCESSING OVER ANCAP’S SEISMIC DATA VALUATION (UT)

Special Processing over ANCAP’s 2D Data, Annex L (2D seismic of 2007, 2008 y 2011). 0,04 UT/Km

Special Processing over ANCAP’s 3D Data, Annex L. 0,08 UT/Km2

LICENSING TYPE 2 DATA VALUATION (UT)

Licensing 3D data inside the Area (according to Annex L, Annex M and Annex N). 2,00 UT/Km2

Licensing 3D data outside the Area (according to Annex L, Annex M and Annex N). 0,50 UT/Km2

LICENSING TYPE 1 DATA VALUATION (UT)

Licensing 2D seismic data processed in depth PSDM (according to Annex L, Annex M and Annex N). 0,1 UT/Km

Licensing ANCAP’s legacy data-package (according to Annex K) 40 UT

Licensing: Petroleum Geology of Uruguay Report, Complementary Study to Petroleum Geology of Uruguay Report , Study of

Fluid Inclusions (according to Annex M). 6 UT/report

Licensing the Study of Micro-seeps detection of hydrocarbons into sediment samples (according to Annex M). 30 UT

Licensing the Uruguay Well Log and LAS Plus Data (according to Annex M). 0,5 UT/well

Licensing the Advanced 2D seismic UR2011 processing (according to Annex M). 0,04 UT/Km

DEVELOPMENT OF ULTRADEEP WATERS TECHNOLOGY VALUATION (UT)

Budget for research in development of technology of exploration in ultra-deep waters (just applicable for areas Type III). 200 UT/MMUS$

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Committed Exploratory Program Some comments (1/2)

1. The total depth of any proposed well (water depth + sediments) has to be according the exploratory target to be tested. A stratigraphic well can be offered in Areas Type III.

2. 2D and 3D seismic offered refers to Km or Km2 FF and processing in Depth

3. EM refers to CSEM with a maximum spacing between receptors of 2.5Km

4. The licensing of any data is not mandatory. The licensing of any data would have to be proved by submitting with the corresponding annex, the receipt of purchasing the data.

5. The licensing of ANCAP’s 2D seismic data can be partial, but only complete lines. The licensing of ANCAP’s 3D can’t be partial, and only the entire 3D volume could be licensed.

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Committed Exploratory Program Some comments (2/2)

6. Special Processing can be offered over ANCAP’s 2D and 3D seismic data only.

7. Budget for research in development of technology of exploration in ultra-deep waters has to be undoubtedly related to the activities in Uruguay

8. It won’t be considered as working unit, the purchasing of any data that has already been counted as part of the PEC in previous Bidding Rounds.

9. Exploratory Works exceeding the PEC of previous contracts, can be counted as part of an offer, prorated to the working interest of the company in the previous contract, if such work is offered in this bidding round.

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Committed Exploratory Program A B C D E

Areas

Working Units

required in the

Minimum

Exploratory

Program

Maximum of WU

to be computed by

the licensing Type

1 Data

Computable New Exploratory Work

Maximum %of WU

to be carried out that

can be computed by

new work.

10 2000 1000

Wells Type 1,2 or 3

3D Seismic

2D Seismic

EM

Geochemistry on seabed samples

Special Processing

Licensing Type 2 Data

Unlimited

Unlimited

70%

85%

70%

10%

Unlimited

Table shows the Minimum Exploratory Program for each Area for the Basic Subperiod. Working units can be offered to fulfil the Minimum Exploratory Program resulting from wells, new exploratory work, special processing over ANCAP’s seismic data, licensing data and development of ultradeep waters technology, according to:

• The maximum number of working Units that will be computed by licensing Type 1 Data is limited by the value shown on Column C.

• The working units that can be proposed by new exploratory work, can be fulfilled by the options shown in Column D, but will be computed with the limits shown on Column E.

• That percentage limit shown on Column E is applied over the difference of the WU of the Minimum Exploratory Program (Column B) and the WU offered by licensing existing data.

• For the new exploratory work committed that is unlimited, all the WU offered are computed.

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Economic Proposal

• The bidding company must propose the value of the increase of the Uruguayan State’s Profit Oil (X) for each range of R Factor, according to the following Table.

• The R Factor is the relationship between cumulated Gross Income and cumulated Cost Oil.

• X between 0 and 70. • X has to be offered for light oil, heavy oil and natural gas

R Factor % Profit Oil State

<1 8 + X

1-1,5 15 + X

1,5-2 20 + X

>2 30 + X

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Index

• General Features

• Qualification of Oil Companies

• Database

• Offers Comparison

• Final Remarks of the bidding process

• Contract Model

• Final Remarks

Page 39: URUGUAY ROUND 3 - Mining Press ·  · 2017-09-21from 1970 to 1982 • Lobo and Gaviotin wells ... Uruguay Round 3 ... Petroleum Geology of Uruguay Report, Complementary Study to

Final remarks about the bidding process

• The Area will be awarded to the highest score offer.

• In case there are similar offers (less than 5% in Total Score), ANCAP will invite the companies to improve their offers, in a term of 5 days.

• Offer guarantee is 50.000US$

• The Executive Branch has to authorize by Decree the signature of the Contract.

• The awarding company has to register an Uruguayan company. If the Area is awarded to a Consortium, it has to be formed by Uruguayan companies.

Page 40: URUGUAY ROUND 3 - Mining Press ·  · 2017-09-21from 1970 to 1982 • Lobo and Gaviotin wells ... Uruguay Round 3 ... Petroleum Geology of Uruguay Report, Complementary Study to

Index

• General Features

• Qualification of Oil Companies

• Database

• Offers Comparison

• Final Remarks of the bidding process

• Contract Model

• Final Remarks

Page 41: URUGUAY ROUND 3 - Mining Press ·  · 2017-09-21from 1970 to 1982 • Lobo and Gaviotin wells ... Uruguay Round 3 ... Petroleum Geology of Uruguay Report, Complementary Study to

Legal Framework

• Specific applicable laws – Decree Law N°14.181 Hydrocarbons Law – Mining Code Law N°15.242 – Law 18.083 Tax System

• Fields are State property (original domain). • Extracted substances are State property (common

domain). – One portion for ANCAP to cover production costs (Cost Oil)

and contractor’s compensation (Contractor’s Profit Oil) – One portion for the State (Uruguayan State’s Profit Oil)

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Contract

• PSA: Production Sharing Agreements for which Contractor assumes all risks, costs and responsibilities of the activity. – No royalties are applied – No signature or production bonuses. – No surface rentals – No taxes paid to provinces or municipalities – No Ring fencing inside the contract area

• PARTIES’ OBLIGATIONS – Contractor: Perform on behalf of ANCAP all operations (exploration,

devolpment, exploitation, supplementary and ancillary operations) in the area allocated.

– ANCAP: Pay Contractor its compensation and assist it in the fulfillment of its obligations.

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Contract Term

• 30 years which can be extended to 40 years • EXPLORATION: maximum 9 years (3 + 3 + 2 + 1) for Areas

Type I and II, and 11 years (4 + 4 + 2 + 1) for Areas Type III – Basic Subperiod: Comply with the Committed Exploration

Program (PEC). Guarantee: 10% of PEC. PEC is biddable – Supplementary Subperiod: Comply with the Agreed Exploration

Program (PEA) (at least one exploratory well). Guarantee 5% of PEA.

– Extension Subperiod: Comply with the Agreed Exploration Program (PEA) (at least one exploratory well). Guarantee 5% of PEA. Relinquish 30% of the area.

• EXPLOITATION: 25 years subject to maximum contract term. Guarantee: 5% of investments.

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Contractor’s Economy

• Contractor’s compensation – Cost oil

• Recovery limit 60% in case of oil production and 80% in case of natural gas production for Areas Type I and II, 70% in case of oil production and 90% in case of natural gas production for Areas Type III

• Costs recovered quarterly and investments recovered in 20 quarterly installments.

– Profit oil • Variable according R factor. Profit oil split is biddable.

• Contractor has the right to freely dispose hydrocarbons warranted from its compensations.

• ANCAP has the preferential right to purchase such hydrocarbons for domestic demand only.

• Hydrocarbons valued at international market prices.

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ANCAP’s Association Option

• ANCAP’s right

• Limit of ANCAP’s association is biddable

• Exercised within 120 days as from the demarcation of the Exploitation Lot

• Payment within 180 days as of the execution agreement, % of: – Productive exploratory wells

– Evaluation wells (up to 25% non productive wells)

– 15% for indirect costs

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Taxation

• Income Tax – Corporate Income Tax (IRAE)

– Income Tax on Non Residents (IRNR)

• Tax on Net Worth (IPAT) – Consumption Taxes

– Value Added Tax (IVA)

• Specific Consumption Tax (IMESI)

• Custom Taxes

• Social Security Contributions (CESS)

EXEM

PTE

D

(Hyd

roca

rbo

ns

Law

)

Income Tax in Exploration phase was exempted for subcontractors by a special Decree

Page 47: URUGUAY ROUND 3 - Mining Press ·  · 2017-09-21from 1970 to 1982 • Lobo and Gaviotin wells ... Uruguay Round 3 ... Petroleum Geology of Uruguay Report, Complementary Study to

Index

• General Features

• Qualification of Oil Companies

• Database

• Offers Comparison

• Final Remarks of the bidding process

• Contract Model

• Final Remarks

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vs.

• Qualification for exploration period only.

• Training fee 50.000$ for ANCAP and 50.000$ for the Ministry, instead of 100.000$ for ANCAP

• Some definitions added

• Rearranging of some clauses

• Exploration Period 11 years and higher Cost Recovery Limits in case of Type III Areas

• Approval of the Ministry of Energy and ANCAP of the Appraisal and Development Programs

Very small modifications with regards to the bidding round terms

and the contracts signed as a result of Uruguay Round II

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Summary

Official Announcement Road Shows, Meetings

and Data Rooms

Submission of offers 26 April 2018

Qualification of Oil Companies Until 6 April 2018

Lower qualification criteria & Qualification for

Exploration Only

BIDDABLE ITEMS A: ANCAP’s Association X: Profit Oil Split UT: Committed Exploratory Program Very low Working Units requirement.

Most of the areas can be awarded just by licensing existing data

ANCAP is only carried through exploration

Excellent opportunity of frontier exploration, to acquire an asset with very good contract terms and very low work commitments

Page 50: URUGUAY ROUND 3 - Mining Press ·  · 2017-09-21from 1970 to 1982 • Lobo and Gaviotin wells ... Uruguay Round 3 ... Petroleum Geology of Uruguay Report, Complementary Study to

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