Upstream

Talos Energy files Notices of Dispute to Pemex over Zama oilfield

Talos Energy upstream

Talos Energy, the Houston-based upstream company, announced this Friday it has filed Notices of Dispute to the Mexican government over the Zama oilfield. Particularly, the company is trying to negotiate over decisions taken by the Mexican Ministry of Energy, earlier this year, about the ultimate operator of the gigantic oilfield.

As we reported previously, Mexico’s Ministry of Energy, designated Petroleos Mexicanos (Pemex) as the ultimate operator of Zama, yet to be unitized. Talos Energy argues that this decision damages the company as an investor in Block 7, offshore Mexico.

Talos highlights that Sener’s decision also constitutes violations of the trade agreement between the United States, Canada, and Mexico, called USMCA. However, it also violates the Bilateral Investment Treaty between the United Mexican States and the Belgo-Luxembourg Economic Union.

The aim of the Notices of Dispute is to resolve the issue amicably, and without further legal action, like international arbitration. In the company’s statement, Talos Energy makes clear that it still has the intent to mutually and beneficially continue with work alongside Pemex.

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Talos Energy looking for mutually beneficial development of Zama

In fact, the “Notices of Dispute provide the opportunity for an initial phase of negotiation and consultation between the parties in an attempt to resolve the controversy.” Talos’ statement read. However, if these efforts result unsuccessful, the company will take further legal action, as outlined above.

As we reported previously, back in July, Talos received notification of Sener selecting Pemex as the main operator of the Zama field. However, and according to Mexico’s own unitization guidelines, SENER was required to “consider the principles of economy, competitiveness, efficiency; also, legality, transparency, best practices of the industry and also the best use of hydrocarbons.” Talos highlights that Sener has not demonstrated how it followed those guidelines.

Finally, Talos’s President and Chief Executive Officer Timothy S. Duncan commented. “The filing of these Notices of Dispute, along with the concrete, mutually-beneficial proposals we have presented to PEMEX and Mexican authorities in the past, demonstrates our commitment to maximize value for all stakeholders, including Mexico.”

He also remarked. “We respectfully call upon the Government of Mexico to engage with Talos in meaningful negotiations and consultations considering the full body of evidence regarding the ideal operatorship structure for Zama and the safeguarding of our rights as a foreign investor.”

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