RE: zama6 Jul 2021 11:22
MEXICO CITY, July 5 (Reuters) - Mexico chose state-owned
Pemex to run a major shared oil find over the private consortium
led by a U.S. oil company that first discovered it, in the
latest win for President Andres Manuel Lopez Obrador's
nationalistic energy policies.
The disputed deposit, believed to hold some 700 million
barrels of oil, is thought to straddle two neighboring blocks in
the southern Gulf of Mexico, one belonging to Pemex and the
other to a private consortium of oil companies led by
Houston-based Talos Energy .
It was the first major oil discovery by foreign companies
after reforms spearheaded by Mexico's previous administration
opened up the country's energy sector to foreign and private
producers, which Lopez Obrador has battled to roll back.
The Mexican government awarded Pemex the rights to operate
the potentially lucrative offshore Zama discovery in a letter
from the energy ministry dated July 2, even though the Talos-led
consortium initially won the exploration and production contract
in a 2015 oil auction.
Talos, which announced the discovery of the Zama well in
2017 that gave its name to the deposit and argues that it should
run the project, said in a statement it was "very disappointed"
by the ministry's decision, adding that it would explore all
legal and strategic options to maximize value for its
shareholders from Zama.
Talos and its partners have invested nearly $350 million in
the project, drilling four exploratory wells so far, while Pemex
has yet to drill on its side of the shared deposit.
U.S. officials have in the past highlighted Talos' legal
rights to the project, and some have suggested it could be
subject to a challenge under the investment protections of the
USMCA, the trade pact between the United States, Mexico and
Canada.
The other members of the Talos-led consortium are Germany's
Wintershall Dea [WINT.UL] and Britain's Harbour Energy .
SPLIT RIFT
The energy ministry's letter cited Pemex's technical
know-how and nearby oil infrastructure as reasons giving it an
edge, and cited a third-party study that concluded that Pemex's
block holds a slight majority of the oil below.
The letter backed heavily-indebted Pemex's claims from June
that it had the financial capacity to develop the project and
had nearby infrastructure for receiving, storing and exporting
the crude.
Miriam Grunstein, an energy expert at Rice University's
Baker Institute for Public Policy who has written extensively on
oil contracts, said the decision made it clear the Mexican
government wanted Pemex to have control over the project,
calling it a "political" move.
"They wanted to give Pemex the medal, but it will come at a
high cost," she said, pointing to the risk of failing to produce
results from the project, which she said could lead to lawsuits
from Zama's other stakeholders.
Last year,
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