Mexico has been very keen on attracting foreign investors to its underdeveloped drilling sector. Those efforts finally bore fruits. Bloomberg recently reported that the Mexican government had for the first time in well over 80 years, allowed a private company to drill offshore. The company was Talos Energy LLC.
Talos Energy hopes to partner up with Premier Oil Plc, an energy giant based in London, and the Mexican Sierra Oil and Gas Inc. The milestone achievement got mentioned in a press statement issued on the 21st of May 2017.
Petroleos Mexicanos Monopoly is Broken
Previously, the drilling rights were exclusively held by the state-run and owned oil and gas giant company, Petroleos Mexicanos. The latter had enjoyed a monopoly on the energy sector in the South American nation for the better part of the past century. The offshore well sunk by Talos Energy, the Zama-1 holds massive oil reserves. Best estimates state the Zama-1 has the capacity to produce up to 500 million barrels of crude oil.
Cost of Drilling
Drilling was expected to last for three months, according to the top officials of Premier Oil, Sierra Oil & Gas, and Talos Energy. The companies needed to cough up an estimated $16 million to extract the fossil energy and convert it into meaningful end-products.
Experts Weigh in
Elaine Reynolds is a vastly experienced energy industry expert working with the Edison Investment Research Consortium in London. Mr. Reynolds expressed his optimism about the future of the Mexican oil industry. The reforms taking place in the nation’s energy sector look very promising, moving forward.
Another industry expert, Charlie Sharp of the Canaccord Genuity Ltd., dubbed the Zama-1 drilling project as one of the biggest exploration news of the year. Talos Energy owns and controls 35% of the rights to the tender while Sierra Oil & Gas controls 40% and the remaining 25% is in the hands of Premier Oil Plc.
About Talos Energy
Talos Energy LLC is a privately owned oil and gas Houston-based organization with an insatiable appetite for Mergers and Acquisitions and takeovers. Talos Energy Inc. took over Energy Resource Technology (ERT) GOM, Inc., a subsidiary of Helix Energy Solutions Group at a cost of $620M. Talos mostly operates within the Gulf of Mexico and the American Gulf Coast regions. Tim Duncan serves as Talos’ CEO and President.
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