Before the end of this year, the Province of Mendoza ("The Province") will launch the "Fourth Bidding Round" ("IV Round") to award the exploration and exploitation of 12 hydrocarbon areas located in Cuyana and Neuquina - Sur Mendocina basin. The Province is drafting the bidding terms and conditions that will govern the IV Round. These documents will be published after submitting them for comments to interested companies.
The main characteristics of the IV Round are:
- The Province will call for bids for the exploration (conventional and non-conventional) of the 10 areas for a period of up to 5 years: Río Diamante (in San Rafael), CN III Norte (part of San Rafael and part in Malargüe); Boleadero, Loma Cortaderal, Cerro Doña Juana, Ranquil Norte, CN VII-A, Chachahuén Oeste and Loma del Divisadero (in Malargüe); and Puesto Pozo Cercado Oriental (in Tunuyán).
- The remaining 2 areas will be tendered for exploitation for a period of 25 years: Pozo Cercado Occidental (in Tunuyán) and Atuel Norte (between San Rafael and Malargüe).
- Initial royalties of 12%, subject to the variation of crude oil price.
- Prior negotiation between companies and unions to reduce labor costs and promote job generation.
- The provincial owned company (Empresa Mendocina de Energía S.A.) would not be a party to the transaction (unlike the last tenders in which it participated in the profits of the exploitation).