The ailing Mexico’s oil industry can be attributed to the decision by the Mexico’s government to nationalize the sector in 1938. After the nationalization, most of the activities in the sector were undertaken by Petroleos Mexicanos, popularly known as Pemex. However, the sector is on a path to recovery following a decision by Mexico to welcome foreign companies, interested in the oil industry, back into her borders.
In 2015, Talos Energy, Premier Oil, and Sierra Oil & Gas were awarded rights to prospect oil in the Sureste Basin off the state of Tabasco. The three companies won the rights in the first round of bidding. The companies agreed to work together in a joint venture that will see the first non-Pemex oil well drilled in over 80 years.
The three companies are working on their first project, the Zama-1 well. The well is located at Sureste Basin. Premier Oil issued a statement indicating that the well holds crude oil in excess of 500 million barrels. The report further suggested that the well is likely to be functional in close to 90 days. Premier Oil said that the Zama-1 well would cost them $16 million.
The Zama-1 well has enthused many oil industry experts and investors as well. Elaine Reynolds, an analyst at Edison Investment Research, welcomed the news about Zama. He stressed that Zama being the first non-Pemex well will likely generate a lot of interest from the oil industry. He also added that the project is likely to succeed owing to the structure of the basin around the well. Charlie Sharp, an analyst at Canaccord Genuity, supported Reynolds’ views; he stated that Zama could revolutionize the Mexican oil industry.
Talos Energy owns 35% stake in the Zama-1 project. The company was founded in 2012, and it is based in Houston. It is a privately held company with business interests in Gulf of Mexico, oil & gas, and exploration & production. Tim Duncan is the Chief Executive of Talos. Talos energy has over 200 employees.
Talos employees have continually found pride in working for the company. Perhaps, it is because the management of the company allows them to own part of Talos.