Mexico hands control of private oil find to state-owned Pemex

Mexico hands control of private oil find to state-owned Pemex

The Mexican government has awarded control of one of the country's biggest oil discoveries to state-owned Pemex after months of deliberation, dealing a blow to private investment and raising the prospect of international litigation.

A consortium made up of the US's Talos Energy, the UK's Premier Oil and Germany's Wintershall DEA discovered the nearly 700m-barrel Zama field in 2017 and have invested $325m in the project to date.

But some of the project spills over on to acreage owned by Pemex, which prompted a battle over who should be in charge. The energy ministry has now ruled in favour of the state company, which President Andrés Manuel Lpez Obrador sees as a national champion.

In the letter posted on Twitter by energy consultant Gonzalo Monroy, energy minister Rocío Nahle named Pemex operator of the discovery and said the companies should present a development plan within 30 days.

Neither the government nor Pemex had any immediate reaction to the news, which was made public on Monday. The announcement came days after a Pemex pipeline in the Gulf of Mexico caught fire, prompting a blaze in the sea.

Lourdes Melgar, a former hydrocarbons under-secretary, said Pemex had not wanted the field when the sector was opened to