After almost 80 years, Mexico has allowed a private company to dig an offshore oil well which is in Mexican waters. This is another step that the country is taking as it allows foreign competitors to come back in the energy sector.
This is a joint venture. It includes Premier Oil PLC that is based in London. Besides Talos Energy LLC which is Houston-based. Next is the home company, Sierra Oil & Gas. The drilling of the well started on May 21. Till now all the offshore exploration wells were being done by the state-run Petroleos Mexicanos as it has a monopoly here. This had been happening since 1938 as the oil industry of the country had been nationalized then.
This is being called the Zama-1 well. It is based in the Sureste Basin. It is located just off the state of Tabasco. It holds nearly 100 to 500 million barrels of crude as per estimates. It will take nearly 90 days before the drilling gets completed. The entire project will be costing nearly $16 million. It was in 2015 that these three companies had won the rights for this prospect. This was during the first round of bidding that took place after Mexico had voted for opening its oil industry to the prospects of private investing.
This is an integral part of the energy reform process that is being undertaken by the country. Hence this activity is being keenly watched by all those who are involved in this industry in any way. In addition, the structure of its basin suggests that this project has a very high chance of success in terms of its geology.
Zama has huge implications for the oil energy market of Mexico. Talos Energy is well aware of it. Several analysts are looking at such kind of exploration wells that are being drilled in this sector.
Talos Energy is one of the operators of this well. It is the owner of 35% stake in this venture. The other partners include Sierra that holds 40% in the venture. Next is Premier that holds 25% in this joint venture.