Model E&P Contract
Duration, major events and relinquishment
Duration, major events and relinquishment

Exploration
The term of the exploration Phase is 6 years divided in two periods of 3 years each. After the completion of the work committed for the first exploration period, a contractor wishing to continue on to the second period must commit to drilling one well to a pre-established depth and relinquish 50% of the original Contract Area. After the end of the second exploration period, the contractor may continue exploration work for up to two more years, provided that it proposes to the ANH an additional exploration program and relinquishes 50% of the remaining Contract Area.

Evaluation
If a discovery is made, the contractor defines an evaluation program to be executed over one to two years, depending on the scope of the program. This evaluation period may be extended at the discretion of the ANH in order to allow complex project planning and market development. Two extra years may be granted for natural gas and heavy oil discoveries.

Exploitation
Once the evaluation program is completed and presented to the ANH, the contractor may declare commerciality and the exploitation period begins for each discovery declared commercial.

Each discovery and declaration of commerciality must be duly reported to the ANH and to the Ministry of Mines and Energy.

The duration of the exploitation period for each exploitation area is 24 years. The exploitation period may be extended, at the contractor’s option, beyond the 24 years to the end of the economic life of the field if certain minimum conditions are met.

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