Mexico’s Pemex Plans to Begin Production at Zama Offshore Field In 2024

Mexico’s state oil company expects to begin production at the field before the end of President Andrés Manuel López Obrador’s six-year term in office, which ends in December 2024

Mexico’s state-owned Petróleos Mexicanos (Pemex) will begin crude oil production at the giant offshore Zama field during 2024
December 22, 2022 | 11:49 AM

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Mexico City — Mexico’s state-owned Petróleos Mexicanos (Pemex) will begin crude oil production at the giant offshore Zama field during 2024, according to the company’s 2023-2027 business plan seen by Bloomberg Línea.

The start-up date pushes back the estimate made by Pemex CEO Octavio Romero Oropeza, who had told Bloomberg Línea that a possible production start-up date was on target for 2023.

“During 2021 and so far in 2022, Pemex has worked on the definition of the development plan for the Zama field,” the company said in its five-year business plan.

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The field contains recoverable oil in the range of 500 to 800 million barrels of crude oil, and possibly more than one billion barrels, according to a document prepared in September 2021 by US oil company Talos Energy’s legal counsel, King & Spalding.

Zama has been a source of controversy between the Mexican government and Talos Energy, which heads the consortium that won marine block 7 in the southeast basins during an auction held during the administration of former president Enrique Peña Nieto, and where the company discovered the field after previous exploration activities by Pemex when the state-owned company operated as a monopoly in the country’s oil and gas production, prior to the 2013 energy reform that opened up the sector to private players.

The Zama discovery, located in the Gulf of Mexico, is adjacent to Pemex’s assignment AE-0152-M-Uchukil field. The Energy Ministry (Sener) commission a field study from Ryder Scott to determine the percentage of participation of the consortium formed by Premier Oil, Wintershall Dea, Talos and Pemex in the field.

“The discovery of the Zama field within these adjoining areas led to a series of technical studies that resulted in the confirmation by Sener of a shared field and the designation of Pemex as the operator for its development,” the Mexican oil company stated in its five-year plan.

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Talos Energy initially pursued operation of the field, but its CEO Timothy Duncan said during an interview with Bloomberg News in August 2022 that the private oil company is willing to concede in the fight for control of Zama if it maintains a leadership role, but also threatened the Mexican government with a legal dispute.

Mexican President Andres Manuel Lopez Obrador said in August that Talos is the only US company with which his government has a dispute.

Sener concealed until 2023 the Ryder Scott study that favors Pemex. Bloomberg Línea consulted Talos Energy on the subject, but has yet to obtain a response.

Pemex currently produces 1.7 million barrels per day, while Talos Energy extracts 53,000 barrels per day of crude oil equivalent.