Talos Energy, Sierra Oil, and Gas and Premier were awarded oil exploration rights in the Gulf of Mexico. The result of this has been huge. The consortium has discovered what some have described as “world class” oil find in the area. The area possibly has as much as 2 billing barrels of oil under the waves. Talos’s share of the pie is 35%. The well has been named Zama- 1 and by some estimates, it will take roughly four years to develop it into a fully operating well. In fact, the CEO of Talos, Tim Duncan, sums up the find in a couple of sentences. He has said that there are two sides to the story. First, the deposits are huge, which is a good thing, but on the other hand, because of its size, it will take time to get started.
There is a political side to all of this which is one of the reasons why this is important. This is the first time the Mexican government has allowed oil exploration to be done by private companies. As a result of this Francisco Monaldi, a Fellow at Rice Universities Baker Institute for Public Policy is optimistic that the Mexican government will encourage such ventures in the future. Obviously, this is big news for those in the oil and natural gas business. In fact, starting in 2015 the Mexican government began auctioning off land for drilling.
For the uninitiated, the oil and gas business in Mexico was monopolized by a government run company named “Petroleos Mexicanos” or PEMEX for short. However, due to red tape, this company consistently underperformed. This is the basic reason behind the Mexican governments about turn, and handing over drilling rights to private companies. For all of these reasons and more oil companies like Talos are expected to find more and more oil in the region.
For more information follow Talos Energy on Facebook.