The Ecuadorian government has published the new regulation that will govern the bidding procedure for the country’s Ninth Petroleum Round. Petroecuador has promoted this regulation, published in Official Registry 719 on December 5th, in Houston (November 20) and London (November 26). It is estimated that the current government will convoke biddings via publication in the country’s principal newspapers for blocks 4, 5, 39, and 40 in the coast during the second half of December. Two of these blocks are located in Isla de Puná and Santa Elena Peninsula while the remaining two are located offshore in deep waters of the Pacific Ocean. Interested parties may obtain the bases for the bidding starting on December 18th. The final adjudication of the bids is scheduled for April 25, 2003. It is not known whether or not the new government (which will take power in January 2003) will suspend the policy or continue it and convoke biddings just for the coast and/or the Amazon region.

This new regulation is similar to one emitted for the bidding of Ecuador’s Eighth Petroleum Round.

The objective of the regulation is to stipulate the requisites that interested companies will have to fulfill for the Ninth Petroleum Round. All bids must comply with the form and substance outlined in the regulation.

This regulation will control all bids for contracts submitted by companies, consortiums, private associations, state organizations, or private and foreign individuals. Each bidder must have juridical status and must be represented by a legal representative or power of attorney holder in order to participate in the bidding process. Consortiums and associations must nominate a sole legal representative or power of attorney holder.

The Special Bids Committee (CEL) will be the organization responsible to recognize, process, and resolve issues relating to the contacts such as the provision of required documents for the bidding. Such documents must be available from the publication of the convocation of the bidding.

The foundations of the contracting will be approved via ministerial agreement of the Ministry of Energy and Mines.

Companies wishing to participate in the bidding will have to pay a participation rights fee. Once such fee has been paid, participating companies can request clarifications that they deem necessary regarding the bidding documents or whatever other inquiry they may have about the process.

Offers by interested companies must be submitted to the Special Bids Committee (CEL) and may be modified up until the deadline for the presentation of offers. Likewise, offers can be rescinded via written petition. In this case, the offeror will not have the right to a refund of its participation rights fee.

Area specialists, who may require written clarifications from the offeror, will evaluate offers.

The Special Bids Committee (CEL) will judge the contract based on the elements or criteria in accordance with what is stipulated in the bidding documents. The Committee will immediately notify the offeror if its offer has been accepted.

The contract to be executed by the parties shall contain clauses where specific rights and obligations will be stipulated. Such clauses should address guarantees, insurance, taxes, contract termination, dispute resolution mechanisms, and any other issue relevant to the contract’s nature. In the event that the contract is not signed within the stipulated period, the offeror will lose its seriousness of offer guarantee and will have to pay damages incurred for non-completion of its obligation.

The selected offeror must present the guarantees stipulated in the Hydrocarbons Law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.