Page 5 - LatAmOil Week 12 2023

LatAmOil COMMENTARY LatAmOil

He remarked: “We are delighted with the col- US company. Indeed, Talos had filed a notice
laboration between our partners, which has of intent in September 2021 to seek arbitration
enabled us to submit the unit development plan over the decision, claiming it was a breach of the
for the Zama field on schedule. This marks an US-Mexico-Canada Agreement (USMCA) on
important milestone towards delivering safe and free trade.
efficient first oil from the Zama field, which once The US company had invested in Mexico
on stream will contribute significantly to both after the previous presidential administration,
Harbour’s production and Mexico’s domestic led by Enrique Pena Nieto, adopted energy
energy supply.” reforms that scaled back Pemex’s monopoly over
Hugo Dijkgraaf, the chief technology officer the oil sector. It found oil at Zama, an offshore
of Wintershall Dea, added: “The establishment field in Block 7, in 2017, and initially estimated
of the integrated project team brings many the site’s reserves at 700mn barrels. This made it
advantages to this comprehensive world-class the largest discovery made in Mexico in several
development project. It enables the targeted decades. Talos and its
mobilisation of specific competencies from all By contrast, Andres Manuel Lopez Obrador,
participating companies, including from Win- the current president, has been keen to help partners have
tershall Dea. I am convinced this will have a sig- Pemex recover its former dominance. He has spent around
nificant impact on the quality of the project and sought to reverse or freeze the energy reforms
the efficiency of its execution. I wish the entire made by his predecessor in 2013-2014 that ena- $350mn on
Zama team a successful start into this important bled the Talos-led consortium to make the dis-
project phase.” covery in the first place. Zama to date,
Meanwhile, Talos’ president and CEO Tim-
othy S. Duncan and described the new plan as Reasons to be wary while Pemex
“an important step in moving the Zama project The US company does have reason to be wary, as has yet to
forward.” He then went on to say: “The UDP it and its partners have invested around $350mn
[unit development plan] provides an efficient in the Zama project to date, while Pemex has yet make any
development plan that we expect to advance this to make any significant investments. The total
discovery to first production. Separately, the IPT cost of developing the field is expected to reach significant
provides important roles for each of the Zama $4-5bn over the next 30 years. investments
unit holders, a structure which we believe best In the meantime, though, the scope of the
leverages the talents of each organisation and project has changed. That is, Zama no longer
optimises project governance. We understand consists solely of the areas explored by Talos but
the importance of this project to Mexico and also of the acreage added to the site via the uni-
look forward to continuing our collaboration as tisation deal. Thanks to the government’s deci-
we look towards formal approval and to advance sion, the field now also includes Asab, Chamak
the project to FID.” and Naquita, three fields within Uchukil 0152,
Duncan spoke similarly in an interview with an adjacent block originally assigned to Pemex.
Bloomberg on March 24, emphasising that The NOC had not explored these sites by the
Talos, Wintershall and Harbour would be mak- time unitisation was under discussion, and Talos
ing operating and drilling decisions together cited Pemex’s slow pace as a reason why it ought
with Pemex. “We will have a hand in the design to remain at the helm of the Zama project.
and execution of everything related to that It may now be wondering, then, whether col-
development plan,” he said. laborative decision-making will end up meaning
in practice that Pemex will expect it to expend
Consolation prize? time, money and effort in the exploration of this
The news agency commented, though, that the section of the Gulf of Mexico, only to swoop in
deal might be seen as something of a consola- afterwards and take the fruit of its labour for
tion prize for Talos. The new arrangement does itself. Duncan is probably too diplomatic to raise
nothing to disrupt Pemex’s status as operator such a possibility in public, but privately he may
of the field, which has been a sore point for the be considering such a scenario. ™

Zama was discovered within the Block licence area 7 in 2017 (Image: Wintershall Dea)

Week 13 29•March•2023 www. NEWSBASE .com P5