(Bloomberg) — The sale of a stake in Mexico’s giant Zama oil field promised to help Premier Oil Plc pay down debts and strengthen its balance sheet, but an ownership conflict is complicating that process.
Some international oil companies operating in Mexico are waiting for a resolution to a conflict between Talos Energy Inc., the field’s primary shareholder, and state-owned Petroleos Mexicanos to resolve their dispute before considering bidding on Premier’s minority share in Zama, three oil executives with blocks in Mexico told Bloomberg News, requesting anonymity because the information is confidential.
Premier Chief Executive Officer Tony Durrant cautioned against a quick sale last month because the conversations were complicated. He had previously told Bloomberg that there was “serious interest” in the asset, which investment bank Jefferies Llc initially estimated at $439 million.
The price “will be affected by a continued uncertain investment environment in Mexico,” said John Padilla, managing director of IPD Latin America, in an interview in Mexico City. “There’s a lot of uncertainty right now. That always breeds selling and buying, but the question is at what price.”
While Zama was first hailed as the biggest success of Mexico’s energy reforms, the 2017 discovery by Talos, Wintershall Dea GmbH’s local subsidiary Sierra Oil & Gas and Premier, has run into some hurdles. The deposit spread beyond the boundary of Talos’s block and into one owned by Pemex. Talos is holding discussions with Pemex to determine ownership of reserves that overlap the neighboring regions, but the talks have stalled amid a disagreement over who owns a majority of the shared reservoir and who will operate it.
“The Zama sales process is ongoing and the company remains in discussions with interested…
Source: FuelFix
