Mexico’s Pemex, which stands for Petroleos Mexicanos, the state owned Company will effectively claim operation of the Zama field from Talos Energy; according to a letter seen by Reuters.
Firstly, according to Reuters, the letter showed that Mexican Energy Minister, Rocio Nahle, had notified on Friday Pemex’s president Octavio Romero, the decision to grant Pemex Exploration and Production the operation of the Zama field.
Secondly, this decision comes right after ended its unification process to determine which company would be its operator; according to the company’s capacities upon drilling in shallow waters; also, financial capabilities, etcetera.
Thirdly, the dispute over the Zama field is years long. It was discovered in 2017 by a consortium led by Talos energy, and including Germany’s Wintershall Dea; and also Britain’s Harbour Energy; formerly known as Premier Oil.
Moreover, the discovery was one of the largest made by a private company in Mexico; however, since it was located in a Pemex neighboring area of Uchukil in the southern Gulf of Mexico; Pemex started to muscle up to claim operation.
Also recommended for you: Low carbon steel to be produced in Ontario after investment. Click here to read.
Pemex would be a suboptimal decision for Zama operation: Talos
In addition, the consortium has already invested $325 million in the Zama reservoir operation. But, as we reported previously, after much dispute and pressure, Talos Energy concluded that Pemex had the majority of stake in the oilfield; with 50,44% of it, and the consortium the remaining 49,6%.
Furthermore, according to analysts from WSJ there’s a conflict of interest on the decision of who will be the operator of the field; as the decision is in the hands of the Mexican energy minister; who is also chairman of Pemex. This would be detrimental to the USMCA accord and its framework.
On the other hand, the letter seen by Reuters, apart from designating Pemex as operator, also states that the company has indeed the financial capacity to develop the project; upon which it holds a 50.43% stake of the reserves on its side of the reservoir; also says the company already has nearby infrastructure for receiving, storing and exporting crude oil.
Finally, neither Pemex nor Talos energy where immediately available for comments. However, the Talos Energy has said that Zama would generate $28 billion of fiscal revenue to Mexico; and that leaving its operations to Pemex would be a suboptimal decision.