Mexico allowed private companies to sink an offshore oil well in its waters. The decision has taken more than 80 years. The government decided to open its oil market to foreign investors to rescue its ailing oil industry. Talos Energy is the project`s operator.
The drilling program began on 21st May 2017. It was achieved through a joint venture of Mexico`s Sierra Oil & Gas, London-based Premier Oil and Houston`s Talos Energy. Sierra owns 40%, Talos 35% and Premier 25%. Premier said that the exploration is a national achievement. It is the first offshore exploration project that has been launched by a private organization. Petroleos Mexicanos, a state-run monopoly, has been running all the offshore exploration projects. The government projects have not been successful.
The well is known as Zama-1. It is located in Sureste Basin in Tabasco state. It holds crude oil that is estimated to be between 100 million to 500 million barrels. According to Premier, the drilling process will take 90 days. The project will cost an approximate value of $16 million. This cost will be shared by the three companies. The firms won the rights to the drilling project in 2015.
Elaine Reynolds is an analyst at Edison Investment Research Ltd., a London-based company. She said that the project`s chance of success is high according to her firm`s geological evidence. This well should be watched keenly because it is part of Mexico`s energy reforms. Charlie Sharp said that Zama-1 is one of the best exploration wells that have been drilled in 2017. Charlie is an analyst at Canaccord Genuity Ltd.
Talos Energy, the main operator, is a private oil and gas company that deals with offshore explorations. The firm has been successful in exploring and acquiring assets from deep areas in the Gulf of Mexico. Talos exploits and optimizes the assets using advanced technology. It has employed a team of professionals with decades of experience in the area.
The company has built a good reputation over the years. It hopes to grow into a world-class company. Talos Energy seeks to meet its objective by complying with environmental regulations. It also develops its competitive edge by constantly finding better methods of operating.