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By Anthony Harrup
MEXICO CITY–Talos Energy Inc. of the U.S. said Mexico’s state-owned oil company will be the operator of a joint offshore oil field in the southern Gulf of Mexico, which Talos discovered in 2017.
Houston-based Talos received a final resolution from the Mexican Energy Ministry regarding joint development of the Zama field, which confirms a July decision by the government to grant Petróleos Mexicanos management control of the project.
A development plan is expected to be submitted for approval by the working partners in six to 12 months before a final investment decision is made in 2023, Talos said.
The company reiterated its disappointment with the decision to make Pemex the operator of the field, and said it will continue to evaluate “various strategic and legal options” while it participates in work to reach a final investment decision.
“We understand how important accelerated first oil from Zama is for the Mexican energy sector and all of the company’s stakeholders,” Talos said.
The field was discovered in 2017 in an exploration block that Talos won in a first bidding round following Mexico’s 2013-2014 overhaul of energy laws to allow for private exploration and production in the country’s oil industry. The reservoir also lies under an adjacent block assigned to Pemex.
Mexican President Andrés Manuel López Obrador put a freeze on new oil auctions after taking office in December 2018, and is seeking to undo other parts of the energy overhaul to restore market share to Pemex and the state-owned electric utility CFE.
An independent reserves auditor in 2019 estimated the Talos block to contain between 735 million and 950 million barrels of oil equvalent in recoverable reserves. Zama could produce 160,000 barrels a day of oil equivalent once developed, the company said.
Talos added that the $104 million it has invested so far in the block is subject to cost recovery under the production sharing agreement. Talos’s private partners in the block are Harbour Energy of the U.K. and Germany’s Wintershall DEA.
Write to Anthony Harrup at anthony.harrup@wsj.com
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