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Hydrocarbons Exploration and Production

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Hydrocarbons Exploration and Production

LLT has a team of professionals that have broad legal practice on Hydrocarbons Exploration and Production in Mexico and abroad. Such team has provided advisory and counseling services as in-house lawyers in companies and transnational entities engaged in the industry of Oil Exploration, Production, and Services, both in the private sector and governmental sector.

The law firm has specialized on the management of PPAs, EPC contracts, O&M contracts, FSAs, and OPF contracts, including on filing and asserting claims for latent defects, force majeure events, changes in law, and changes in priority and migration of contracts.

Purchase Power Agreements. These agreements are known as “PPAs” and LLT is highly specialized on providing counseling to companies, affiliates, and subsidiaries engaged in the energy industry when participating in public tenders, as to drafting and preparing agreements for the purchase and sale of power, as well to identify the national and international regulations applicable to such area.

Engineering, Procuring, and Construction Contracts. In these contracts, which are known as EPC turnkey contracts, our law firm advises both national and foreign companies, affiliates, and subsidiaries on projects related to works construction of pipelines and metering facilities and natural gas compression for the interconnection of and supply to combined cycle power plants operating under independent power producer systems, natural gas transportation for industrial plants operating under production systems for self-consumption. In these contracts, project owners contracts engineering, procurement, and construction services, acquire the necessary materials, and build the project. Under this contracting model the risk of the contracted services relies upon the contractors, on such manner that the owner is protected from changes in prices of materials, labor, etc. Moreover, such contracts are executed on a lump sum modality, that is, the price is fixed at the beginning of the project, which implies a great benefit for the owner.

Operation & Maintenance Contracts.  These are known as O&M contracts for power plants, such contracts are used for companies, affiliates, and subsidiaries that engage in the hydrocarbons industry and participate in national and international public tenders in order to enter into integral exploration and production services contracts for the management of mature fields; the owners or holders of power plants act primarily as investors or promoters in these contracts, as they have the equity for the construction of a power plant thus they sign a contract for its construction, and afterwards, another contract for the operation and maintenance of the facilities. The price of these O&M contracts are usually based on production, although they also have a fixed portion guaranteeing contractors the payment of a significant portion to cover their expenses, minimizing their risks in the event that owners decide not to use the entire production capacity.

OPF contracts (Spanish acronym for, “Obra Pública Financiada” – Financed Public Work). The law firm has provided advisory services to companies, affiliates, and subsidiaries engaged in the hydrocarbons industry, in the negotiation, execution, and management of OPF contracts with PEMEX Exploración y Producción, as well in the execution and negotiation of subcontracts with contractors stemming from the OPF contracts for different services.

LLT provides legal attention to national and foreign companies in the negotiation of hydrocarbons transportation contracts in Mexico and in the participation of bids for such contracts; as well in the drafting and negotiation of infrastructure agreements, agreements on the purchase and sale and leasing of machinery and materials related to the hydrocarbons sector, engineering contracts and permits, and contracts on drilling, repairing and concluding wells, among others. We also represent companies specialized on exploration and production services in projects’ financing, both public and private.

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