By Ana Isabel Martinez
MEXICO CITY (Reuters) – Petroleos Mexicanos (Pemex) is ready to invest billions of dollars in a major disputed oil field in the Gulf of Mexico once its U.S. partner Talos Energy agrees to Pemex leading the project, the chief executive said. of the Mexican national oil company.
The 850 million barrel capacity Zama field has become a bone of contention under President Andres Manuel Lopez Obrador’s efforts to tighten state control over energy.
Majority shareholder Pemex has had a long stalemate over who should operate it with Talos, which leads a private consortium that also includes Harbor Energy and Wintershall Dea. It got to the point where the Mexican and US governments had to play a mediating role.
“They (Talos) are still a bit reluctant. We hope that they will finally accept and that we can start the project,” Pemex chief executive Octavio Romero told Reuters in an interview at the company’s headquarters in Mexico City. .
The other two companies in the consortium have agreed with Pemex on the need to continue, according to the executive. Pemex said it had to mine the project because of its experience, its larger size and because its section of the block holds most of the reserves.
Talos holds a 17.35% stake in Zama after the unitization of the project. He wants to have a say in how to develop the reservoir, which is considered one of the best shallow water prospects in the world.
Talos filed Notices of Dispute under the United States-Mexico-Canada Trade Agreement (USMCA) in September, a prelude to seeking international arbitration. Reuters reported in May that Talos had halted action during high-level talks.
Talos had no immediate comment and Wintershall did not respond to a request for comment. Harbor declined to comment. The Mexican presidency did not respond to a request for comment.
” EVERYTHING THAT’S NECESSARY “
Talos won the right to develop the lucrative estate at an auction held under the previous government.
Lopez Obrador’s administration froze oil and gas auctions. Its drive to favor Pemex and the national electric utility culminated last week when the United States requested dispute resolution talks with Mexico over its energy policy under the USMCA.
Pemex has not publicly disclosed its stake in Zama. According to an independent reservoir analysis, 50.43% of Zama’s reserves are on the Pemex side.
“Pemex needs to consider companies’ exploration spending and bring new investment into the project,” said Mexico-based analyst Gonzalo Monroy. “This is all the more true as Pemex wants to add two additional fields to the project, which would increase the assets but also the need for investment, and could atomize the participations of the other companies.”
Asked if Pemex has the means to develop Zama, Romero firmly nodded and pledged to invest “whatever it takes.” Investment in the field this year would be “very small” but would eventually represent “billions of dollars”, he added.
The state oil company has financial debts of $108.1 billion and $13.7 billion with suppliers, as well as other liabilities that have consistently plagued it with negative working capital. The investments Zama needs in the coming years will coincide with a busy debt repayment schedule.
“Pemex has yet to budget for Zama investment, its capital spending continues to be constrained, and the government is using the company’s extraordinary revenue to support subsidies, bolstering the president’s popularity,” said John Padilla, managing director of consultancy IPD Latin America.
If the parties reach a final agreement this year, investments for 2024 would be higher, Romero said, adding that Lopez Obrador had made a strong commitment to Zama during energy sector meetings between Mexican and American officials in May and June. Lopez Obrador said in June that Mexico and Talos were close to reaching an agreement on the development of the field.
(Reporting by Ana Isabel MartinezAdditional reporting by Adriana Barrera, Marianna Parraga, Dave Graham; Editing by David Gregorio)