On August 4, 2015, the National Hydrocarbons Commission ("CNH") published press release No. 017, informing that the Ministry of Energy, the Ministry of Finance and Public Credit as well as CNH, made changes to the contract model and the bidding guidelines for the Second Call of Tenders of Round One. Also, CNH published on that same date an updated version of the contract model and the bidding guidelines.

Following are the relevant changes:

  • Adjustment of the economic balance of the contract: Changes were made to the thresholds of the adjustment mechanism used to calculate payments, by modifying certain variables of the applicable formula.
  • Guarantees. Conditions for the submittal of proposal guarantees, compliance of the minimum work program and compliance of contractor's obligations, are more flexible.
  • Insurance. Insurance coverage amounts are specified prior to the performance of the petroleum activities under the contract (USD $1 billion for civil liability and well control insurance policies).
  • Administrative Termination. Definitions of the terms willful misconduct and deceit are included in order to provide greater certainty over the administrative termination process.
  • Arbitration. The General Secretary of the Permanent Court of Arbitration of The Hague becomes appointing authority (it was formerly the President of the International Court of Justice).
  • Materials. Consistent with international best practices, the transfer of property of movable materials from the contractor to the State will be subject to investment recovery.
  • Bidding guidelines. The following modifications are highlighted:
    1. The conditions for the submission of proposals by different companies that may share indirectly the same fund source such as investment funds, are more flexible.
    2. Rules for the formation of consortiums and its participation are more flexible. IA company acting as operator in a joint bidder, may participate simultaneously as an individual bidder for those contract areas in which it does not submit a proposal with the consortium.
    3. if an operator leaves a consortium, the remaining members may join another individual or joint bidder or include a new prequalified operator to the consortium.
    4. It will be sufficient to submit only one bid guarantee (letter of credit) regardless the number of contract areas for which economic proposals are submitted.

The final version of the bidding guidelines and the contract model of this Second Call for Tenders will be released on August 21, 2015 and the opening of proposals and declaration of winners will take place on September 30.