For over 75 years (beginning in 1938), Mexico’s energy market remained nationalized. The state-owned Petróleos Mexicanos (better known as Pemex) dominated the energy sector. However, in 2013, Mexico altered some clauses in her constitution in favor of deregulating the energy sector. The deregulation of the energy sector meant that more foreign investors would stream into the country. Two years later, several foreign companies including Talos Energy and Premier Oil bid to explore crude oil in Mexico. Talos Energy and Premier Oil won the rights to the prospect.
Talos Energy and Premier oil partnered with the local Sierra Oil & Gas to establish a private outfit that would drill the first non-Pemex well in the country in over 80 years. The private well known as the Zama-1 is located in the shallow waters of the Gulf of Mexico. In a statement issued by Premier Oil in May 2017, the drilling work had begun, and it is expected that the well would be functional in three months’ time. The statement indicated that the Zama well holds crude oil in excess of 500 million barrels. The UK’s based Premier oil contributed $16 million towards the venture.
The move by Mexico to deregulate the energy industry and welcome foreign investors resonate well with analysts all over the globe. According to the London-based Elaine Reynolds of Edison Investment Research, the Zama well will be the talk of the town as it signifies Mexico’s energy reform process. He is confident that the project will succeed because of the nature of the rocks around the Sureste Basin (the location of the Zama well). Charlie Sharp echoed Reynolds’ sentiments. The analyst believes the success of the project will shape the future of the Mexico’s energy market. To know about Talos Energy click here.
The honor to manage the new well was bestowed on the 5-year-old Talos Energy. The Houston-based company holds 35% stake in the Zama-1 Well. It is a private company with interest in oil and gas in Gulf Coast and the Gulf of Mexico. Tim Duncan is the company’s co-founder and the current CEO. Recently, one of Talos’ employee, Ash Shepherd, was Thirty Under 40 honoree.
Their Facebook Page: https://www.facebook.com/talos.energy/