Mexico's energy ministry has approved a 60-day extension for talks between state oil company Pemex and a private consortium led by U.S.-based Talos Energy Inc over the future of a massive shared crude deposit, Talos chief executive Tim Duncan told Reuters on Tuesday.
The energy ministry's previous deadline for a deal on an initial so-called unitization agreement for the offshore Zama discovery would have expired next week.
The country's energy ministry has agreed to let the parties continue negotiating through March 25, Duncan said, which would determine who runs the potentially lucrative project as well as a preliminary split of the reservoir, among other development details.
"Continuing talks with Pemex during the extended period represents the clearest and fastest route towards expedited first oil, which benefits all parties involved, including the government of Mexico," said Duncan.
The other members of the consortium are Germany's Wintershall Dea and Britain's Premier Oil.
Zama was discovered by Talos three years ago and is estimated to hold nearly 700 million barrels of oil in the Gulf of Mexico, due north of the Tabasco state coast.
Pemex claims more than half of Zama lies in its neighboring block, but only Talos has drilled several wells to confirm the contours of the reservoir, which in 2017 became the first major find by a private or foreign oil company since the previous government ended a 75-year-old state monopoly on exploration.
According to an engineering study from the technical oil consulting firm Netherland, Sewell & Associates, Talos' block holds 60% of the reservoir, while Pemex's holds 40%.
Neither the energy ministry nor Pemex's press office responded to after-hours requests for comment.
While unification agreements are common in the international oil industry, the talks over Zama mark the first time such a high-stakes deal is being negotiated in Mexico.
(Reporting by David Alire Garcia; editing by Richard Pullin)