The Mexican oil drilling industry has been notoriously closed off to foreign, private investors for the better part of the last 80+ years. Mexico famously nationalized their oil industry under the state’s own oil monopoly, Petroleos Mexicanos. Since then there have been precious few private investments coming in to drill the lush waters available. This is all changing in 2017 as a group spearheaded by Houston, Texas based energy firm Talos Energy LLC. Mexico’s oil industry is changing and it looks like a trio of investors are leading the way.
Talos Energy will be heading to Mexican waters in order to proceed drilling on the Zama-1 Well which is located off of the waters near the state of Tabasco. The Zama-1 Well is located in the Sureste Basin and geological surveys have been performed to reveal that the basin could be giving up nearly 500 million barrels of crude oil if drilling goes well. Elaine Reynolds of Edison Investment Research said that there was, “A high geological chance of success.”
The Zama-1 Well will be drilled by a trio of investors led by Talos Energy LLC. The other two investors joining the drilling will be Premier Oil from London and Sierra Oil & Gas from Mexico. The three energy companies came together in a round of bidding back in 2015 in order to win the right to take on the drilling project. If all goes well, and reports are that it will, this well could begin a marked change in the way oil drilling goes throughout the Americas.
The Zama-1 Well should be finished drilling with 90 days of the start of the operation. Premier will be funding the drilling with $16 million of their own funds. As a shared project the stakes of the well will be split between the three different companies. Talos will be handed a 35% stake in the well while Sierra gets 40% and Premier gets 25%. Charlie Sharp, a high profile researcher at Canaccord Genuity, noted that the Zama-1 “Is one of the most interesting exploration wells to be drilled in the sector this year.”