URUGUAY ROUND 3 BIDDING ROUND TERMS AND MAIN FEATURES OF CONTRACT MODEL

Transcription

1 URUGUAY ROUND 3 BIDDING ROUND TERMS AND MAIN FEATURES OF CONTRACT MODEL LONDON, 20 TH OF OCTOBER 2017 M. ENG SANTIAGO FERRO EXPLORATION & PRODUCTION ANCAP

2 Index General Features Qualification of Oil Companies Database Offers Comparison Final Remarks of the bidding process Contract Model Final Remarks

3 Index General Features Qualification of Oil Companies Database Offers Comparison Final Remarks of the bidding process Contract Model Final Remarks

4 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

5 Schedule ACTIVITY DATE Official Announcement 18 September 2017 Submission of Intention Letter and documents for the Qualification of Oil Companies. Notification of Qualification of Oil Companies From 18 September 2017 to 6 April 2018 Until 13 April 2018 Inquiries and clarifications Until 13 April 2018 Answers to Inquiries and clarifications. Submission of proposals. Opening of proposals. Until 20 April 2018 From 24 April 2018 to 26 April 2018 at 14:00, Local time. 26 April 2018 at 15:00, Local time.

6 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

7 Offered Areas AREAS TYPE I AREAS TYPE II AREAS TYPE III

8 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) rondauruguay3@ancap.com.uy 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%.

9 Index General Features Qualification of Oil Companies Database Offers Comparison Final Remarks of the bidding process Contract Model Final Remarks

10 Legal Aspects Documents proving the existence and representation of the company.

11 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.

12 Technical Aspects (for Operators only) AREA FOR EXPLORATION ONLY FOR EXPLORATION AND PRODUCTION Areas Type I Areas Type I and Areas Type II Areas Type I, Areas Type II and Areas Type III Top 100 with international operations experience, or Offshore operations, and International operations experience. 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 Offshore operations at a higher water depth of 2000m, 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. 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. 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.

13 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.

14 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

15 Index General Features Qualification of Oil Companies Database Offers Comparison Final Remarks of the bidding process Contract Model Final Remarks

16 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

17 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

18 From ANCAP UR07 UR08 Acquired by Wavefield Inseis, ANCAP Operator Processed by Geotrace, PSDM only Gravimetry and Magnetometry UR07: 7125 Km UR08: 2909 Km

19 From ANCAP UR ,6 Km Operator ANCAP Acquired by Reflect Geophysical PSTM and PSDM Gravimetry and Magnetometry

20 From ANCAP UR 3D Acquired in Km 2 FF Operator YPF Acquired and Processed by Western Geco

21 From Amplified Geochemical Imaging PROGRAM FOR THE MICRO-SEEPS DETECTION OF HYDROCARBONS INTO SEDIMENT SAMPLES OFFSHORE Contact Details Amelia de Coster Mark Arnold

22 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

23 From ION UruguaySPAN, 2800Km Uruguay Reprocessing, 10000Km Contact Details brary/south_america/uruguay/

24 From PGS Pelotas Basin - Uruguay Uruguay 3D GeoStreamer 15,611Km 2 Contact Details Gregg Parker Gregg.parker@pgs.com

25 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 dhall14@slb.com Douglas Langton douglaslangton@ddlc.eu

26 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

27 From Spectrum UR2002, 1840Km 2D seismic UR13, 3200Km 2D seismic UR14, 3740Km 2D seismic Contact Details Gladys Reyes com

28 From TGS Uruguay Well Log and LAS Plus Data Contact Details sive_commercial_well_log_agreement_with_ancap_in_ Uruguay/

29 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.

30 Index General Features Qualification of Oil Companies Database Offers Comparison Final Remarks of the bidding process Contract Model Final Remarks

31 Offers Comparison TotalScore Score 1 Score Score 2 3 Score 20* A UT 40* UT 40 1 * Amax max X X max For Oil ºAPI >25 Score 20* A UT 40* UT 40 2 * Amax max X X ' ' max For Oil ºAPI < 25 Score 20* A UT 40* UT 40 3 * Amax max X X G Gmax 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%

32 % ANCAP s Association The bidding company must propose the maximum ANCAP s association percentage, in the range between 20% and 40%.

33 UT: Unidades de Trabajo (WU: Working Units) Committed Exploratory Program (PEC) WELLS WATER DEPTH (m) VALUATION (UT) Type 3 and Stratigraphic More than UT Type to UT Type 1 Less than UT NEW EXPLORATORY WORK VALUATION (UT) 3D Seismic 2,0 UT/Km 2 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/Km 2 LICENSING TYPE 2 DATA VALUATION (UT) Licensing 3D data inside the Area (according to Annex L, Annex M and Annex N). 2,00 UT/Km 2 Licensing 3D data outside the Area (according to Annex L, Annex M and Annex N). 0,50 UT/Km 2 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$

34 Committed Exploratory Program (PEC) 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 Km 2 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 Type 1 would have to be proved by submitting with the corresponding annex, the receipt of purchasing the data (previous to the proposal). 5. Licensing data Type 2 can be committed and done only if awarded the area.

35 Committed Exploratory Program (PEC) Some comments (2/2) 6. 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. 7. Special Processing can be offered over ANCAP s 2D and 3D seismic data only. 8. Budget for research in development of technology of exploration in ultra-deep waters has to be undoubtedly related to the activities in Uruguay 9. 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. 10. 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.

36 Committed Exploratory Program Example for Area 10, full table available in bidding round terms 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 Wells Type 1,2 or 3 3D Seismic 2D Seismic EM Geochemistry on seabed samples Special Processing Licensing Type 2 Data Maximum %of WU to be carried out that can be computed by new work. 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.

37 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. R Factor % Profit Oil State <1 8 + X 1-1, X 1, X > X X between 0 and 70. X has to be offered for light oil, heavy oil and natural gas

38 Index General Features Qualification of Oil Companies Database Offers Comparison Final Remarks of the bidding process Contract Model Final Remarks

39 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 US$ 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.

40 Index General Features Qualification of Oil Companies Database Offers Comparison Final Remarks of the bidding process Contract Model Final Remarks

41 Legal Framework Specific applicable laws Decree Law N Hydrocarbons Law Mining Code Law N Law 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)

42 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.

43 Contract Term 30 years which can be extended to 40 years EXPLORATION: maximum 9 years ( ) for Areas Type I and II, and 11 years ( ) 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.

44 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.

45 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

46 Main features of contract model Typical Production Sharing Agreements for which Contractor assumes all risks, costs and responsibilities of the activity. No Bonus No Royalties Term: 30 years Exploration: 9 years for Areas Type I and II and 11 years for Areas Type III First Exploration Period: Commited Exploratory Program Exploitation: 25 years Contractor s Economy Production split in 3 portions: Cost Oil Contractor (CAPEX and OPEX) Profit Oil Contractor Profit Oil Uruguayan State Profit Oil subject to Income Tax 25% ANCAP s Association Option ANCAP s right Limit of ANCAP s association is biddable Exercised after there is a commercial discovery ANCAP is only carried through exploration Items in orange are biddable

47 EXEMPTED (Hydrocarbons Law) 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) IRNR in Exploration phase was exempted for subcontractors by a special Decree

48 Index General Features Qualification of Oil Companies Database Offers Comparison Final Remarks of the bidding process Contract Model Final Remarks

49 WEB PAGE: exploracionyproduccion.ancap.com.uy Geological information about Uruguayan offshore and onshore basins Available E&P database and prices Posters Bidding round terms Contract Model Map of offered areas Presentations Spreadsheet for comparison of offers Q&A All relevant information regarding Uruguay Round 3 is being uploaded and posted at this web page

50 vs. Qualification for exploration period only. Training fee $ for ANCAP and $ for the Ministry, instead of $ 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

51 Summary ANCAP is only carried through exploration Very low Working Units requirement. Most of the areas can be awarded just by licensing existing data BIDDABLE ITEMS A: ANCAP s Association X: Profit Oil Split UT: Committed Exploratory Program Official Announcement Road Shows, Meetings and Data Rooms Submission of offers 26 April 2018 Lower qualification criteria & Qualification for Exploration Only Qualification of Oil Companies Until 6 April 2018 Excellent opportunity of frontier exploration, to acquire an asset with very good contract terms and very low work commitments

52 THANK YOU FOR YOUR ATTENTION