Land Owners and Water Rights. Local landowners. Management explained that the Chiapas blocks the local land owners are all on side now. The land owners do not have any oil rights. They have been simply ignored a lot by Pemex in the past. There is now a regulatory process in place–which was just finished last December, for the oil companies. Oil companies like ROE are to negotiate with the local land owner to pay between 1 1/2% to 3% of the net oil revenue produced from his property. In reality this is a fraction of 1% of gross oil revenue. These land owner contracts are now all in place on the Chiapas blocks and ROE has the process in place for future blocks. With respect to the amount being paid, I was not told the percentage, however the indication given to me was that you need to have the land owners on side, so pay the maximum and the small amount is still good money for the landowner.
The other way to have the local people and owners on side is to do things like enhancing roads and building a school, etc.which ROE has been doing. ROE has been working to build a good relationship with all of the local people.
ROE is not in a position of ownership so they can’t negotiate with owners on the Amititlan property. That belongs to Pemex right now. ROE has a plan in place.
Water Sources.
Since fracking a well can use millions of gallons of water for one well I have been concerned if there is adequate sources of water as the Amititlan block is in farm country and where farm land rights have a high priority.
On speaking to management, I was told that the Amititlan block is mainly orchard country with other farmland but there is lots of sources of water. He said water sourcing will not be a problem for Amititlan or any of the surrounding blocks or in any of the areas they are looking to bid on or find partners. He said there are lakes, rivers, streams and companies that sell water. He also said that once they are fully operational in any of the areas they will be looking at setting up their own recycling facilities to reuse a lot of the water required as this will lead to cost savings.There are companies they can contract with to recycle the frack water as well.