MEXICO OIL REFORM ADVANCES WITH FIRST PRIVATE WELL IN 80 YEARS

Foreign competitors have set up a new company in Mexico after the country accepted them back so as to revive the energy market. Therefore, an offshore exploration well has started to be drilled by three of these companies. They include; Houston’s Talos Energy LLC, London based Premier Oil PLC and Mexico’s Sierra Oil and Gas as said by Premier. From the time Brazil nationalized the oil Industry, only the state run monopoly (Petroleos Mexicanos) would launch a well, thus making this one the first to be launched by a different person. Premier in the statement also said that the Zama-1 well holds approximately 100 million to 500 million barrels of crude and it is located off Tabasco State, Sureste Basin.

When the oil industry in Brazil was opened to private investment, through bidding, the three companies above won rights to the well. The London based Edison Investment research Ltd analyst, Elaine Reynolds, quoted that the non-Pemex well will be watched carefully by the oil industry. Charlie Sharp, Canaccord Genuity Ltd analyst said in a client’s note that given the Mexican market implications, Zama-1 well will be among the most interesting to be drilled in the sector. Actually, given the basin structure, chances of geological success are high. In this business venture as stated by Premier, Sierra holds 40 % while Premier holds 25 % and Talos, the operator, holds 35 %.

Talos Energy LLC’s chief executive is known as Duncan. He, together with other partners from London and Mexico are the founders of Zama-1 well. Talos is an oil and gas company based in Houston. It is in fact, a private company and the first foreign operator in Mexico after about 80 years (since 1938). It was started with assets from the Gulf of Mexico, 15 workers from Gulf Coast that later increased after sealing a deal with Apollo Management and Riverstone Holdings and $600 in Equity by previous bankers such as Riverstone Holdings. Talos’ ventures on offshore premises. Thus, it focuses on the Gulf of Mexico and the Gulf Coast.

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