After 80 years Mexico has advanced in their oil production with an offshore private well being sunk. This step will allow their foreign competitors to come back into their energy market.
This is the first offshore well to be drilled by anyone in Mexico besides the state-run monopoly Petroleos Mexicanos since 1938 when the country was nationalized. This is now a joint venture with the London-based Premier Oil Plc, Mexico’s Sierra Oil and Gas, and Houston’s Talos Energy LLC.
Premier Oil has said that the Zama-1 well which is in the Sureste basin off the coast of Tabasco, holds 100 million to 500MMbbl of crude oil. It is estimated to cost Premier $16 million and take 90 days to complete the drilling. The state of the Mexican oil production was ailing until they voted to open it to private investment. The three companies were awarded the rights to prospect this area in 2015.
Research has shown that the Sureste basin has a high geological chance for success, and will by closely watched by the oil industry. This is the first Non-Pemex well, since the opening up of the Mexican waters, which was part of Mexico’s energy reform process, to be drilled.
Zama-1 is said to be one of the most interesting wells to be drilled in this sector this year from all the implications. Talos Energy owns a 35% share in the venture and will be the operators of the well. Sierra has 40% and Premier has 25%.
Tim Duncan of Talos Energy, along with his partners, started with $600 million in equity from assets gained in the Gulf of Mexico that had produced more than 16,000 barrels of oil per day in the last year. There was a deal made when they brought the head count up from 15 employees to 120, with private equity companies, Appolo Management and Riverstone Holdings.
Talos Energy LLC is private gas and oil company that has focused on exploration and acquisition of gas and oil properties on the Gulf Coast and the Gulf of Mexico.
Ash Shepherd, Talos Energy’s commercial manager for Mexico signed two production sharing contracts after Mexico’s 2013 Constitutional Energy Reforms which made Talos the first foreign operator, since 1938, in Mexico.
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