HOUSTON – Mexico’s Ministry of Energy (SENER) has instructed the offshore block 7 partners and Pemex to agree on unitization terms for the Zama oil field.
Talos Energy operates block 7 in partnership with Wintershall Dea and Premier Oil. Zama extends from this concession into a neighboring block to the east, operated by Pemex.
According to Talos, the constitution of a formal unit is required prior to the final investment decision (FID) and subsequent field development.
Under Mexican regulations, the four parties must now deliver a unitization and unit operating agreement to SENER for approval within the next 120 days.
This will be the governing document of the unitized consortium over the life of the field, covering issues such as initial participating interests, the roles of the various parties, reimbursement of exploration and appraisal costs to date, and a redetermination mechanism for adjusting the initial participating interests as additional technical data is compiled.
According to Mexican regulations, all should be based on standard industry practices applied globally for unitization agreements.
Talos’ plan for development envisages two fixed production platforms with combined capacity for 150,000 b/d of oil, plus associated gas. The water depth of around 550 ft (170 m) will be the deepest for any installation to date offshore Mexico, Talos added.
The company‘s President and CEO Timothy S. Duncan said: “We are encouraged by the progress that SENER, CNH, and Hacienda have made on the Zama unitization process despite these difficult times, they have worked with transparency and in the interest of accelerating value creation through the Zama discovery.
“We have continued to invest in the front-end engineering and design work despite the recent pullback in commodity prices, so we can remain on pace to submit timely development plans…. We look forward to working closely with Pemex to quickly finalize a fair and mutually beneficial agreement for all parties involved.”