Private companies were not allowed to sink offshore oil wells for the last eight decades in Mexican waters. However, the country has made reforms that have allowed private companies to drill wells as a way of encouraging foreign competitors back into the country’s energy markets. Talos Energy, Premier Oil Plc., and Sierra Oil & Gas joined hands to drill a well. Premier stated the drilling project, noting that it will start on the 21st of May. Premier also pointed out that the project is the first to be launched since the nationalization of the oil industry in 1938 by any other party apart from the Petreleos Mexicanons, which is a state-run monopoly.
During the statement, Primer indicated that the Zama-1 well would be based in the Sureste Basin, which is located off the state Tabasco. The well will hold between 100 and 500 million barrels of crude. The drilling process will take about 90 days, and it will cost Premier a total cost of $16 million. The three energy firms won rights to the project in 2015 when the first round of bidding took place after Mexico decided to open its oil industry to private industries. The move aimed at saving the ailing oil industry in Mexico.
Elaine Reynolds, an analyst at Edison Investment Research, which is based in London, indicated that the oil industry would keenly watch the project. That is because it is the first non-Premex well to be sunk since Mexican waters opened up as a way of reforming the Mexico’s energy process. Elaine also noted that the basin’s structure indicates that the project has high geological success chances. Talos Energy is the operator of the project. Sierra holds 40 percent and Premier owns 25 percent. Talos Energy holds 35 percent of the venture. Charlie Sharp, an analyst at Canaccord Genuity, admitted that Zama-1 is one of the most exciting exploration wells this year because of the implications it has on the Mexican market.
About Talos Energy
Talos Energy is an oil & gas company that is privately owned. The company focuses on production and exploration of offshore. Talos Energy employs experts to ensure that the acquisition of assets in and around Gulf of Mexico and Gulf Coast is carried out professionally. Its expertise provides high-emphasis on exploration, asset optimization, and exploitation.
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