Talos Energy Sinks First Private Well in Mexico Since 1938
For the first time in over 70 years, a private company has been allowed to sink an offshore well in Mexican waters. This is the latest step in Mexico’s drive to bring foreign investment into its energy market. The well is a joint venture between Houston based Talos Energy, London based Premier Oil and Sierra Oil & Gas a Mexican company. This is the first time an offshore well has been sunk by a company other than Petroleos Mexicanos, Mexico’s stat run monopoly. Foreign companies had been barred from sinking wells since Mexico nationalized its oil industry in 1938. The companies began drilling on May 21, 2017.
The well, dubbed Zama-1, is in the Sureste Basin off the coast of Tabasco state. It is estimated to hold between 100 million and 500 million crude oil barrels. Premier estimates the drilling will take 90 days at a cost of $16 million. All three companies won the rights for prospecting in 2015 after a competitive bidding process. It was the first bidding round after Mexicans voted to open their ailing energy industry to private investors. Many analysts in the energy market are closely monitoring the venture as the structure of the Sureste Basin gives the project a high geological chance of success. Talos, a privately held company, will operate the well. It has a 35 percent stake in the venture while Sierra has a 40 percent stake and premier owns 25 percent of the venture.
Talos Energy was started by Tim Duncan and other partners from Phoenix Exploration. Phoenix Exploration managed to rise from the depths of the financial crisis by doubling the company’s size and assets. They then sold the company to Apache Corp. Duncan then raised $600 million from various backers to start Talos Energy. In 2016 Talos Energy had a production of $16000 barrels per day. Most of its assets are in the Gulf of Mexico. Since its founding Talos has increased the number of employees from 15 to 120. The team includes 60 professionals based in the company’s headquarters in Houston and 60 field operators in the Gulf of Mexico. Talos is a growing company that is fun to work in. Workplace Dynamics named it the best workplace among local small businesses.