Trión Deal: Farmout or PSC?

Trión Deal: Farmout or PSC?

The deal being offered to prospective bidders is not yet clear. The winner is required to spend US$464 million, but is this an Earning Event in a farmout, or Carried Interest in a Production Sharing Contract?

CNH refers to the auction as “farmouts,” but we do not find support in Mexican law for a farmout agreement. Meanwhile, multiple questions are yet without answers, such as the plans of Pemex for the conversion of future blocks and the advantages that Pemex and its new strategic partners would obtain from a relationship in and beyond Trión.

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Written by

George Baker

Baker & Associates offers niche-market business and policy intelligence related to Mexico's oil and gas, power and chemical industries. Over 1,000 reports have been issued in the last 20 years. Subject matter expert and publisher George Baker, who directs the firm, has carried out consulting assignments starting in the late 1970s at the height of the Oil Boom in Mexico. He brings bilingual and bicultural skill-sets to understanding and responding to challenges of business and public policy, coupled with a deep familiarity with the history and idiosyncrasies of the Mexican operating environment.

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