It’s been nearly a century since an oil well has been drilled in Mexican waters, but its just the most recent example of that country’s efforts to attract foreign oil producers to its remaining oil reserves. Off the coast of Tabasco in the Sureste Basin, the Zama-1 oil well is poised to produce between a hundred and five hundred million barrels of crude oil. It’s a joint project between top three energy companies: Premier Oil Plc, Talos Energy LLC, and Sierra Oil & Gas. The drilling began on May 21, 2017, and it’s expected to take around 90 days to complete at a cost of $16 million, according to Premier Oil. The last time a well was drilled offshore Mexico’s coasts was in 1938 by the state-own company Petroleos Mexicanos.
Analyst Elaine Reynolds of Edison Investment Research Ltd. noted that the Zama-1 project would be watched by the oil industry closely because it was the first to be drilled since the Mexican government reformed the country’s energy industry and opened its offshore reserves to foreign operations. The ideal location chosen for the project gave it a high probability of success. Another analyst, Charlie Sharp, at Canaccord Genuity Ltd. noted that the Zama project was “one of the most interesting exploration wells to be drilled in the sector this year” because of its implications for the Mexican oil market.
Talos Energy LLC is a private oil company based out of Houston that focuses on exploration and drilling oil and gas wells in the Gulf of Mexico and Gulf Coast region. The company is funded with investments made by Apollo Global Management LLC, Riverstone Holdings LLC, as well as its own management.Talos Energy’s Ash Shepard, the commercial manager for their Mexico operations, was honored as Oil and Gas Investor’s Thirty Under 40 award for signing the first production contracts after Mexico’s 2013 Constitutional Energy Reforms. This made Talos Energy the first foreign oil company to operate in Mexico since 1938.