On Wednesday March 30, 2017, the North American Energy Standards Board (“NAESB”) Wholesale Gas Quadrant (“WGQ”) Contracts Subcommittee voted to move forward with the development of a Mexican Addendum to the NAESB Base Contract for the Purchase and Sale of Natural Gas. Developing a Mexican Addendum should make Mexico a more desirable market for natural gas trading by providing greater certainty about the legal structure of gas trades.
As part of the 2017 NAESB WGQ Annual Plan, the WGQ Executive Committee proposed, and the Board approved, a proposal to review whether to develop a Mexican Addendum. In December 2016, WGQ members voted not to pursue a Mexican Addendum. However, that meeting was not well-attended and several parties who had advocated for creating a Mexican Addendum were not present.
The Texas-based oil and natural gas equipment company National Oilwell Varco, Inc., and its subsidiaries Dreco Energy Services, Ltd. (Dreco), and NOV Elmar (Elmar) (collectively NOV) recently settled potential civil penalties with the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) and the U.S. Department of Commerce Bureau of Industry and Security (BIS) and executed a nonprosecution agreement (NPA) with the U.S. Department of Justice (U.S. Attorney’s Office for the Southern District of Texas). NOV, which did not voluntarily disclose the alleged violations to the government, will pay a total of US$25 million to resolve the charges.
On October 6, 2016, Sajid Javid, U.K.’s Secretary of State for Communities and Local Government, overruled local objections by granting Cuadrilla Resources permission for up to four horizontally-drilled, high-volume hydraulically-fractured wells to produce natural gas from shale formations in North Lancashire, U.K. The decision marks Britain’s first approval of new wells using the controversial method to produce natural gas from shale since Cuadrilla’s exploratory drilling was halted due to seismic activity in 2011. Earlier this year another producer was granted permission to “frack” a well it had already drilled in 2013.