Pemex, Hokchi negotiating over unitization of shared offshore reservoir

Mexican national oil company Pemex and Hokchi Energy have begun the first stage of unitization negotiations over a possible offshore shared reservoir in the southern Gulf of Mexico.

Mexico’s energy ministry told Reuters on Wednesday that Pemex informed it in May that an exploratory well it drilled in its block “infers” the possibility of a shared oil reservoir with an adjacent shallow water area belonging to Hokchi Energy.

The ministry added that the companies have begun talks over a confidentiality agreement that will allow both sides to share technical data.

Hokchi is a unit of Argentina’s Pan American Energy which is partially owned by British oil major BP.

The negotiations, if they result in success, would result in a second shared oil reservoir in Mexico.

Namely, in early June, U.S. based exploration and production company Talos Energy and Pemex were given 120 days to reach some kind of unification agreement regarding the massive Zama oil field.

Back in the fall of 2018, Talos Energy and Pemex signed a pre-unitization agreement regarding Zama, which holds potentially 670 million recoverable barrels – the largest discovery in Mexico by a private company in decades.

The issue for Talos, which won the offshore Zama block back in 2015, is Pemex’s claim that the oil in Zama bleeds into the Pemex-operated neighbouring block. Talos, unlike Pemex, drilled a well in its block while Wood Mackenzie claims that nearly two-thirds of Zama lies in Talos’ block.

If the two firms do not agree, the energy ministry will decide which company will run Zama operations. If, on the other hand, they do reach an agreement – this will be the first discovery in Mexico developed between the state-owned company and a private one under a unification procedure.

The second one, if successfully negotiated, will be the one between Pemex and Hokchi.