Mexico has recently moved a step ahead by allowing foreign competitors to be part of its energy markets. A private firm has sunk a new offshore well in Mexican waters for the first time in eight decades. Talos Energy, Premier Oil Plc., and Sierra Oil & Gas started drilling the well on May 21st as reported by Premier last week. Talos Energy is based in Houston. Premier Oil Plc. is located in London while Sierra Oil & Gas is found in Mexico. The three energy companies had joined efforts to drill the first offshore exploration well since 1938 when the country nationalized its oil industry. The project will be launched by Petroleos Mexicanons, a state-run monopoly.
The Zama-1 well is located in the Sureste Basin, which is the Tobasco state. Premier noted that the well has a capacity of estimated 100 to 500 million barrels of crude. In the statement, Premier said that the drilling would be completed within 90 days, which will cost $16 million. The report indicated that the Premier would shoulder the drilling cost. The three energy firms won rights to the project in 2015 during the first round of bidding. The bidding took place when Mexico voted to open its oil industry, which was not doing well at the time to private investors.
The drilling is part of the energy reforms taking place in Mexico. It is the first non-Pemex well being drilled since the country opened up waters; therefore, all eyes are on it. Elaine Reynolds is an analyst at Edison Investment Research Limited, which is based in London. Reynolds said that the project has high geological chances of success because of the basin’s structure. Charlie Sharp noted that the project was one of the investments to look out for because of the implications it has on the Mexican market. Charlie is an analyst at Canaccord Genuity Ltd.
About Talos Energy
Talos Energy is a privately-owned upstream oil and gas firm. Its primary goal is the exploitation, exploration, and acquisition of oil and gas properties focusing on Gulf Coast and the Gulf of Mexico. It receives investment funds from Talos management, Apollo Global Management, and Riverstone Holdings LLC.