In the Sureste Basin, off the shores of Tobasco, Talos Energy and two other private oil drilling companies have struck oil in Mexican waters. Along with Premier Oil Plc and Sierra Oil & Gas, Talos Energy began drilling the Zama-1 well in May of 2017 in order to reach the estimated 100 to 500 million barrels of crude oil that lie there beneath the Earth’s crust. This offshore basin is a unique geological location, and analysts predict a high likelihood of success throughout the operation.
What makes this endeavor so much more interesting, is the fact that this is the first time in 80 years that a private company, joint venture or otherwise, has been permitted to drill for oil in Mexican waters. Since 1938, when Mexico nationalized oil industry, exploration and acquisition of crude oil within the country was largely dominated by the government. This state run monopoly was made manifest in the form of the petroleum company Petroleos Mexicanos. Now that Mexico faces failing energy markets, they have decided to open their oil industry up to private investors.
Because this lucrative industry was never challenged by competition in Mexico, private investors, like Talos Energy, realized upon arrival that much of the infrastructure that one would expect to find already in place was, in fact, not present. This includes geologically promising locations that have yet to be tapped, as well as a lack of regulatory infrastructure one might see in countries with foreign investors. In a way, this is an ideal situation for Talos Energy and their partners, as they have found the shallow water opportunities in Mexico to be comparable to that of the U.S. waters in the Gulf of Mexico around the 1960’s and 70’s. Simply put, the oil executives have reason to believe there’s huge resource potential in these offshore Mexican basins with large quantities of oil to be found.
Coming in with a 35 percent stake in this venture, Talos Energy stands to represent the United States as one of the first private investors to gain a foothold in a sparsely exploited, energy rich environment. If successful, they stand to make countless millions of dollars and open the door for a new and thriving international market.
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