Page 5 - LatAmOil Week 06 2020

LatAmOil COMMENTARY LatAmOil
 The US company has laid claim to a majority share of Zama on the basis of a technical analysis conducted by an outside consultant, Netherland Sewell & Associates. The study concludes that Talos’ licence area contains an estimated 60% of the Zama reservoir, while the remaining 40% lies within Pemex’s Asab block.
Pemex dissents
those delays during an interview with Reuters earlier this week. “They’ve had their lease for a long time and there hasn’t been a lot of activity,” he told the news agency. “We’ve had our lease for a shorter amount of time, and there’s been a tremendous amount of activity.”
Duncan went on to say that his company was still looking into possible designs for offshore drilling platforms that could be used to explore and develop Zama. “We’re happy to move this forward, and we expect to move this forward,” he said.
“ have become
The NOC has disputed this assessment, say-
ing that more than half of Zama’s reservoir lies
within Asab. “In Pemex’s analysis, we consider
that we have the largest portion of the field,” the
NOC’s CEO Octavio Romero Oropeza declared
in late January. “Independently of who has what,
Pemex will drill exploratory wells to confirm
thisinformation.” Foritspart,CNHmayalsoprovereluctantto
Zama seems to
According to Oropeza, the best solution is to award the state-owned company a majority stake and to let it serve as operator of the pro- ject. Putting Pemex in charge would be the most efficient solution, he said at the daily presidential press briefing.
He went on to say that Zama ought to be developed in tandem with Asab and two other nearby prospects, Naquita and Chamak, both of which are under Pemex’s control. Together, he said, these fields could “constitute a develop- ment cluster that we’re looking to create that will slash operating costs by a lot.”
Pemex can launch production in the area more quickly than Talos, he added. “We think Asab can enter into production next year. They are thinking production won’t happen [at Zama] until2024,”hesaid.
Work schedule
Talos is probably sceptical of these claims, given Pemex has repeatedly delayed the drilling of its first exploration well at Asab.
Indeed, the state-owned company scrapped plans to drill there last year. Even after asking for and obtaining permission to spud a well at the field, it opted instead to draw up a schedule for drilling at Naquita, which lies further to the east in an area that may be associated with an entirely different oilfield. (It also moved Asab into a more speculative category of future drill- ing scenarios.)
Tim Duncan, the CEO of Talos, pointed to
endorse the NOC’s plans. Pimentel told Reuters this week that Pemex would not be able to rely on the drilling permit it had secured in 2019. If the company wants to drill for oil within the Asab licence area, he said, it will have to apply for authorisation once again.
The commissioner’s remarks may lend strength to Talos’ case. Duncan argued in late January that Pemex’s decision to pursue its claim to Zama might slow the pace of development, to the detriment of all parties involved.
Ongoing debates
Talos and the Mexican NOC have been in dis- cussions on the matter for about a year now, and neither side seems to have changed its negotiat- ing position significantly. This is not surprising, giventhesize(andthereforethemoney-making potential) of the field.
But the parties are not just squabbling over the division of the spoils. Zama seems to have become a flashpoint in ongoing debates over how Mexico should develop its natural resources.
The country’s current president, Andrés Manuel López Obrador, generally favours a state-led approach that would see private com- panies playing second fiddle to Pemex. Many observers fear that López Obrador’s policies will undo the financial and economic gains made by his predecessor, Enrique Peña Nieto, who favoured market-friendly policies and sought to encourage outside investment.). ™
But he also echoed Pimentel’s words about the laggardly pace of negotiations. “That part of the discussion has obviously slowed down,” he remarked.
a flashpoint in ongoing debates over how Mexico should develop its natural resources
Zama lies off the coast of Tabasco state (Image: Mexico News Daily)
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