In 1938, a policy went into place in Mexico that prevented foreign investment in the oil and gas business. The policy was meant to protect everyday working people and their tax base in the country. However, as recent economic turmoil has shown, that didn’t work out as planned. Pemex, the Mexican monopoly, was given full rights to drill for oil. Now, new companies have won the ability to drill, and they aren’t Mexican.
Talos Energy, Premier Oil, and Sierra Oil and Gas won the bidding process. Sierra will receive a right to the profits a little more in the percentages than the other two due to it being Mexican. Still, this is a far cry from the original set up where Pemex took all the proceeds and failed to invest it in further innovation. Long gone are the days when Mexico’s president demands that only local companies invest. Clearly, this is a sign that foreign investment is just beginning in this developing nation.
Talos Energy is not like any other energy company. The staff has something special. They are offered profit sharing from the whopping $600 million per year in revenues that the firm enjoys. That’s because the company is led by equity backed investors who put almost a half a billion dollars into the company to start it in the first place. This allowed them to grow quickly from 10 to 100 employees and acquire competitors like Helix Energy Solutions for a whopping $620 million. Now, they’re up to $500 million in revenue annually. The profit sharing means that even scientists get to participate in a huge part of the upside. This kind of foresight from the top management is rare in the industry.
The company has received awards for being the number one small business in their industry by numerous organizations. Talos uses their fund to explore areas along the U.S. Gulf of Mexico and the Mexican coast to find oil to pump. So far, they do about 16,000 barrels of it per day. That’s one of the largest numbers in the industry. They refine the oil, but also offer raw and crude pricing.