Houston-based Talos Energy has informed that the unitization process of the giant Zama oil field, located in Mexican waters, will enter its next phase, as established in Mexican regulation.
Discovered in 2017 by the Talos-led consortium, Zama is a shared reservoir that extends from Block 7 to neighbouring Pemex AE-0152-Uchukil Asignación in the Cuencas del Sureste, in the Bay of Campeche in Mexico.
According to Talos Energy’s statement on Friday, the Mexican Ministry of Energy (SENER) is now required to propose finalized terms of a Unitization and Unit Operating Agreement (UUOA) based on international best practices and considering inputs from the parties.
As explained by Talos, Pemex and the Block 7 consortium, comprised of Talos and partners Premier Oil and Wintershall Dea, did not propose a UUOA to SENER within the initial timeframe established by the unitization guidelines, which ended on 25 March 2021.
President and Chief Executive Officer, Timothy S. Duncan, commented: “Since the presentation of the original key terms for the UUOA, significant progress in reaching a common understanding has been largely achieved. We appreciate the increased momentum and commitment from Pemex towards achieving a joint resolution”.
To remind, the Mexican ministry in July 2020 instructed Pemex and Talos to come up with a unification agreement to develop the Zama reservoir together in a way that would maximize its value.
The two companies were then given 120 days to resolve the issue and deliver the UUOA to the ministry for approval.
It was also said that, if the two companies do not come to an agreement, the energy ministry would decide which company would run the Zama field operations.
Following the expiration of the 120-day deadline, Talos and Pemex received an extension from SENER through 25 March 2021 to finalize the unitization framework, which has now also expired.
Duncan added: “As we transition into this new phase in the process, we look forward to continuing to engage constructively with both SENER and Pemex and we are confident we can achieve a positive outcome for all parties”.
Talos also said earlier in March that, pending the conclusion of unitization discussions, the company would aim to reach the Final Investment Decision (FID) on the project before year-end 2021.
The Zama field is located in Block 7 of the Sureste Basin offshore Mexico in the Gulf of Mexico and has a water depth of approximately 540 feet (165 meters).
The field, one of the largest shallow-water fields discovered in the past 20 years, with estimated peak production of approximately 150 MBOE/day.