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Pemex, Talos Strike Deal To Evaluate Overlap Of Two Blocks

pipelines

Mexico’s state energy company Pemex and a consortium led by U.S. Talos Energy have agreed to evaluate whether a field discovered by Talos in the Gulf of Mexico extends into a neighboring block, where the exploration rights belong to Pemex, a joint statement of the companies said.

The evaluation will continue for two years. It is the first deal of this kind for the Mexican state oil company.

The Talos-led consortium recently made headlines again as the newly elected Mexican government began a review of oil contracts that president-elect Andres Manuel Lopez Obrador pledged on the campaign trail.

Talos Energy holds 45 percent in the venture, which also involves Premier Oil with 10 percent and Mexican independent Sierra Oil & Gas, with 45 percent. The chief executive of the Mexican company welcomed the review.

“They should check everything,” Ivan Sandrea told Reuters. “Along with the entire industry, I’m most interested that they clear up all of their thoughts that there was manipulation.”

The consortium was among the winners of exploration rights to Mexican oil and gas blocks in the first tender of Enrique Pena Nieto’s government. It won the rights to two blocks and later announced a discovery that could hold 1.2 to 1.8 billion barrels of crude in Mexico’s shallow waters.

No wonder then, that Pemex wants to know if some of these barrels are part of its block. According to the statement, the consortium and Pemex will immediately form a working group “with the objectives of maximizing operational and informational efficiencies, defining activities on each tract that optimize the collection of data in the area, and reducing any potential hazards, all to maximize the benefits for México.”

The President-elect has big plans for Mexico’s oil, chief among them an increase in production. However, this will be delayed as all oil and gas tenders have been temporarily suspended until the contract review is completed.

By Irina Slav for Oilprice.com

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