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Petroleos Mexicanos is Operator of the Country’s Largest Oil Discovery

Mexico’s energy ministry has designated Petroleos Mexicanos (Pemex) as the operator of the country’s largest oil discovery by private companies, in the latest sign of the government’s nationalist approach to the energy industry. The Zama field, discovered in 2017 by a private consortium led by Talos Energy Inc., will be operated by a state-owned producer.The resolution ends a long-standing conflict between Pemex, as the state company is known, and the Houston-based producer over the field, which contains as many as one billion barrels of oil equivalent. Talos said that it was very disappointed with the decision and will explore “legal and strategic options regarding Zama.

The company added that the energy ministry had informed Talos of its sudden decision only three days after the driller received a letter directly from Pemex arguing for operatorship. Spokespeople from Mexico’s energy ministry and petroleum Mexicanos didn’t respond to comment requests. Timothy Duncan, chief executive officer of Talos, didn’t return a call seeking comment.

Newspaper Reforma reported earlier that Talos and Petroleos Mexicanos were informed by Mexican authorities in a letter that the state company had the technical capacity and conditions to be the operator of the reservoir. The field, shared by both companies, is located in Mexico’s Campeche Bay. The dispute over Zama has been dragging on for years after it was discovered that the field shared the same reservoir as one belonging to Petroleos Mexicanos. In 2018, the two parties signed a preliminary agreement to share information and undertake a unification of the joint area.

In May, Talos announced that Petroleos Mexicanos had the majority share of Zama, with 50.4%, citing a study commissioned by both parties. The company had initially said that it held a 59.6% stake in the shared reservoir based on an independent study by Netherland, Sewell & Associates last year. Talos’s partners in the consortium are Wintershall DEA and Premier Oil Plc.

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