Page 6 - LatAmOil Week 36 2021

LatAmOil MEXICO LatAmOil

Talos says it will fight SENER’s plan

to name Pemex as operator of Zama

US-BASED Talos Energy has opted to fight the notices of dispute, along with the concrete,
Mexican government’s move to transfer control mutually beneficial proposals we have presented
of Zama, a large oilfield within Block 7 offshore to Pemex and Mexican authorities in the past,
Tabasco State, to the national oil company demonstrates our commitment to maximise
(NOC) Pemex. value for all stakeholders, including Mexico. We
In a statement dated September 3, Talos respectfully call upon the government of Mexico
revealed that it had submitted notices of dis- to engage with Talos in meaningful negotiations
pute to Mexico’s government. These documents and consultations considering the full body of
outline the company’s objections to the deci- evidence regarding the ideal operatorship struc-
sion by the Secretariat of Energy (SENER) to ture for Zama and the safeguarding of our rights
unitise Zama with neighbouring fields within as a foreign investor.”
the Uchukil 0152 block assigned to Pemex and SENER, for its part, has repeatedly insisted
charge SENER with violating the terms of cer- that unitisation is the best solution for Zama. It
tain trade agreements, the statement said. issued an order to that effect in 2020 on the basis
“These decisions ... cause loss or damage to of studies showing that the Asab, Chamak and
the company as an investor and as the operator Naquita fields at Uchukil 0152 were part of the
of CNH-R01-L01-A7/2015 (Block 7) in off- same reservoir discovered at Zama. According
shore Mexico,” Talos declared. “The actions by to Mexican officials, those studies show all the
SENER also constitute violations of the agree- fields to be part of a single reservoir that lies
ment between the United States of America, the mostly within the block assigned to Pemex.
United Mexican States and Canada (USMCA) Talos discovered Zama, which is believed to
and the Bilateral Investment Treaty between the hold nearly 700mn barrels of oil in recoverable
United Mexican States and the Belgo-Luxem- reserves, in 2017. At the time, the field was the
bourg Economic Union (BLEU-BIT).” first major find made by a private or foreign oil
The company also faulted SENER for its deci- company in Mexico since that country’s govern-
sion to hand the project over to Pemex, despite ment adopted major reforms in the oil sector,
that company’s failure to engage in explora- thereby ending Pemex’s 75-year-old monopoly
tion and drilling work at the sites surrounding on exploration.
Zama. It pointed out that it had already invested The US company has been working at Zama
$350mn in Zama and had performed the work in a consortium with Wintershall Dea (Ger-
that led to the discovery of sizeable reserves at many) and Premier Oil (UK). Equity in the
the fields. project is split 35% to Talos,40% to Wintershall
“[Talos’] operated efforts between 2017 and and 25% to Premier, which has retained its stake
2019 were under budget, ahead of schedule and in the field following its merger with Chrysaor
without any safety incidents,” it commented. “In Holdings, another British company, into a new
contrast, despite the statements from Pemex company known as Harbour Energy. ™
executives and Mexican government officials
asserting that Pemex would drill a confirmation
well on their neighbouring contractual area to
provide complementary geological data, Pemex
repeatedly delayed the well for several years until
ultimately cancelling all plans to drill it just a few
weeks before SENER designated Pemex as the
operator of the yet-to-be-finalised unit.”
Talos went on to say that it hoped to resolve
the dispute with SENER amicably and with-
out the need for legal action. It also indicated,
though, that it had been raising objections to
the Mexican government’s unitisation plan for
nearly three years and did not intend to give up.
Timothy Duncan, the president and CEO of
Talos, stressed these points. “Despite SENER’s
current designation of Pemex as the operator of
the Zama field, we are still hopeful that a nego-
tiated outcome that fully respects the rule of
law is achievable,” he said. “The filing of these Zama holds 700mn barrels of oil in recoverable reserves (Image: Talos Energy)

P6 www. NEWSBASE .com Week 36 09•September•2021