The decision by Mexico to nationalize its oil industry in 1938 irked many countries including the United States. However, Mexico failed to achieve the economic benefits it thought it would gain by nationalizing the sector. Apparently, the Mexico’s oil industry is weak, and she recently voted to invite foreign investors to rescue her ailing oil sector. The oil sector is expected to accommodate other players than the state-owned Petroleos Mexicanos known to many as Pemex.
Many foreign companies were keen to join Mexico’s oil industry. Notable foreign companies such as Talos Energy and Premier Oil won rights to explore oil in Mexico’s waters. The two companies and Mexico’s Sierra Oil & Gas joined hands to mobilize resources and expertise that will enable them to drill an offshore oil well. The oil well will be the first non-Pemex well in an extended period of time.
The well will be located in the Sureste Basin off the state of Tabasco. It will be referred to as Zama-1 well. Recently, Premier Oil issued a statement about its involvement with the project. The project will cost Premier Oil a whopping $16 million. However, Premier Oil notes that Zama is a promising well, and it estimates that it holds over 500 million barrels of crude oil. Premier Oil owns 25% stake in the project.
The news about the Zama excited pundits in the business world. Elaine Reynolds of Edison Investment Research recently addressed clients about Zama. According to Reynolds, Zama will be under the scrutiny of players in the Oil industry, but he adds that the well is likely to be a success as evidenced by the structure of the Sureste Basin. Charlie Sharp of Canaccord Genuity noted that Zama well was the most interesting well to be dug in 2017.
Talos, a partner in the venture, owns 35% stake of Zama-1, and it also operates the well. Talos Energy was established in 2012; it is a privately held company based in Houston, Texas. Talos Energy is currently under the stewardship of Tim Duncan.
Talos prides itself in providing the best work environment for its employees. Mr. Duncan states that the company may not be the best paying in the sector, but it enables its employees to become part of the enterprise. Recently one of Talos employee, Ash Shepherd, was Thirty Under 40 honoree.