The Mexican oil industry has been dominated by the state-run operator, Pemex. The oil giant has held a tight leash on the sector since the nationalization of oil and gas assets in 1938. The industry was recently privatized to attract more investors. The industry has been struggling to meet increasing demand. The denationalization has opened up numerous opportunities especially for international stakeholders wishing to cash in on the expected boom.
The reforms were finalized in 2014. In 2015, three companies were awarded the rights to start prospecting for oil. The Zama-1 becomes the first well to be sunk by private entities. It is a collaboration between Premier Oil from the UK with a 25% stake, Talos Energy based in Houston at 35% and Sierra Oil and Gas which has a 40% stake in the venture. Sierra is a local oil and gas company in Mexico.
The new offshore oil well is located in the Sureste Basin in Tabasco State. It is estimated to hold up to five hundred million barrels of oil. The geological evaluation shows the basin has a high chance of success. It is anticipated to take three months to finish drilling the oil well. Industry analysts are eagerly waiting to see the results.
Talos Energy is on the ground running the project. It is a privately-held energy company established in 2012 in Houston, Texas. It has extensive oil and gas assets in the Gulf coast. Talos Energy’s investment ventures are supported by the holding companies Apollo Global Management and Riverstone Holdings. Both are private equity companies based in New York. The Talos Energy management is also backing the project.
The deal positions Talos Energy as one of the first private operators to benefit from the oil and gas industry in Mexico. The company has been chasing just such an opportunity. It has recently acquired cutting edge seismic technology. This enables the company to explore both shallow and deep-water oil assets. The Mexican deal includes two blocks in shallow waters measuring more than 160,000 acres. Talos Energy is led by Timothy Duncan who is a founder and serves as the President and CEO.