After 80 years of monopoly control by the government-owned Petroleos Mexicanos (Pemex), a Telos-led enterprise has sunk the first privately-owned offshore oil well in Mexico. It is a major step forward for free enterprise in the Mexican oil and energy markets, and comes as just the latest step in Mexican oil reform
The oil well is jointly operated by three major companies. Premier Oil, Talos Energy LLC, and Sierra Oil & Gas are working together on the project. Premier Oil is a London-based company, Talos is headquartered in Houston, TX, and Sierra is a Mexican oil company. All three won bidding war to claim the drilling rights after Mexico opened up the opportunity in 2015, to try boosting investment money for Pemex.
Drilling for the well began on May 21st and marks the first offshore exploration well not run by Pemex since Mexico nationalized their oil companies back in 1938. The well is designated as Zama-1 and it is located off the coast of Tabasco in the Sureste Basin.
There is an estimated 100 million to 500 million barrels of crude oil buried underwater, and the Zama-1 will be keenly observed by Pemex, the three companies, and other oil companies worldwide. The basin was chosen because it has a high structural chance of success. Drilling will cost Premier 16 million dollars, and take around three months to complete. If it succeeds, there could be additional demands for Mexico to open up its oil monopoly to foreign investment and allow more companies in.
Talos will operate the well, and holds a 35 percent stake. Sierra holds a higher proportion, at 40 percent, and Premier holds 25 percent. Talos Energy LLC has experience operating offshore oil wells in the Gulf of Mexico, and holds 3-D seismic maps covering 33,000 square miles of the area for offshore drilling and exploration.
Its experienced executive team has worked with oil drilling and exploration for over a decade. Before starting Talos Energy LLC in 2012 the leadership team also operated two other Gulf Coast oil companies called Phoenix Exploration and Gryphon Exploration. They are known for their innovative exploration techniques.
Read more about Talos Energy here.