When she decided to nationalize her oil sector in 1938, Mexico thought it would reap immensely (economically) from the move. The immediate reaction to Mexico’s decision included a boycott of the country’s products by the U.S, UK, Netherlands, etc. Several years later, the repercussions of nationalization became so apparent that Mexico changed her constitution in 2013 to encourage foreign investments in the sector. The change in the country’s laws meant that the state-owned Petróleos Mexicanos (better known as Pemex) would no longer enjoy the monopoly on the energy sector—for over 75 years, Pemex had no competitors.
Two years after Mexico amended her constitution, she invited foreign companies (in the energy sector) to bid for an opportunity to prospect oil in the country. Two foreign companies, UK’s Premier Oil and America’s Talos Energy, won rights to the prospect in the first round of bidding. With the two foreign investors, the future of the country’s oil sector would take a new turn.
Talos Energy, Premier Oil, and Mexico’s Sierra Oil & Gas settled on working together to drill the first non-Pemex well, the Zama-1 Well. Drilling of the well commenced on May 21, 2017. Premier Oil, through a statement issued by the company in May, speculated that the well would be fully drilled in 90 days. The report further speculated that the Zama-1 Well, located in the Sureste Basin, holds between 100 million and 500 million barrels of crude oil. The UK based Premier Oil owns 25% stake in the project. The company expects that it will advance $16 million towards the drilling of the well. To know about Talos Energy click here.
Of course, the move by Mexico to open her borders excited investors and analysts from different investment firms all over the world. For example, Elaine Reynolds and Charlie Sharp of Edison Investment Research and Canaccord Genuity respectively have high hopes in the Zama-1 Well.
Houston’s Talos Energy owns 35% stake in the Zama Well, and it operates the well. The Zama project rightly suits the private company as it is interested in oil and gas projects in Gulf Coast and the Gulf of Mexico. The company has been scaling the heights of the energy sector since it was founded in 2012. Thanks to the able stewardship of Tim Duncan, the co-founder and CEO.