Mexico drills its first private well after oil reform
Mexico’s decision to allow foreign companies in its oil industry has started to bear fruits with the sinking of the first offshore well by an international company in 80 years.
Three companies Premier Oil Plc, Talos Energy LLC and Sierra Oil & Gas based in London, Houston and Mexico respectively jointly participated in this activity from May 21, 2017. The previous offshore exploration wells have been undertaken by the state-run monopoly Petroleos Mexicanos.
The Zama-1 well is located in the Sureste Basin eoff Tabasco State. Premier said that the well is believed to hold between 100 and 500 million barrels of crude oil. The whole process is expected to cost $16 million and last up to 90 days.
Edison Investment Research Ltd. analyst Elaine Reynolds believes that the project will be keenly watched because it is the first one to be carried out after the reforms of the Mexican oil industry. Another analyst at Canaccord Genuity Ltd., Charlie Sharp, said that the wells would be the most interesting to be drilled in the year due to the implications it will have on the Mexican market.
The three companies were given the rights in 2015. Talos, Sierra, and Premier control 35%, 40%, and 25% of the venture respectively.
About Talos Energy
Talos Energy LLC is a privately-owned oil and gas company based in Houston. The company was started by Tim Duncan and his partners. In February 2013, the company acquired Energy Resource Technology GOM, Inc. (“ERT”), at the cost of $620 million. The team invested $600 million from a previous investment in the Gulf of Mexico that produced over 16,000 barrels of oil every day in 2012, and over 60 professionals in Houston. As of 2013, the company’s number of employees had increased to over 120.
In 2013, the company was named by WorkplaceDynamics as the best workplace among small businesses in America. Although the company does not pay its workers high salaries, most of the employees are shareholders.
Talos Energy LLC’s commercial manager based in Mexico, Ash Shepherd, was named Thirty Under 40 honoree on October 17, 2016. This was after he entered into two production sharing contracts that saw Talos Energy become the first foreign oil operator in the former Spanish colony.