In 2015, Mexico awarded three private companies the rights to prospect oil within her borders. The three companies, Premier Oil, Talos Energy, and Sierra Oil & Gas agreed to work together to actualize their first project. In the second quarter of 2017, the three companies commenced drilling their first well, the Zama-1 oil well, located in the Sureste Basin.
The Zama well, estimated to hold somewhere between 100 million and 500 million barrels of crude oil, is the first non-Pemex oil well in Mexico in over 80 years. In 1938, Mexico nationalized her oil sector, a move that caused an international boycott of Mexican products by countries such as the U.S, Netherlands, and the U.K. However, Mexico insisted on implementing her agenda, and for eight decades, Pemex (also known as Petróleos Mexicanos) dominated the Mexican oil industry. Apparently, the state-owned Pemex failed to deliver the expected gains. In fact, in the run-up to welcoming foreign companies, the Mexico’s oil industry was under-performing.
In May, Premier oil (an independent UK oil firm) released a press statement regarding the Zama well. The report indicated that it would take three months for the Zama well to be completed. Also, the well would cost Premier, which owns 25% stake in the venture, $16 million. Talos Energy, an American company, owns 35% stake in the Zama project while Mexico’s own Sierra holds the remaining stake.
The Zama project excited local as well as international investment firms. Elaine Reynolds and Charlie Sharp of Edison Investment Research and Canaccord Genuity respectively expressed high expectations for the project. According to Reynolds, the project would likely succeed based on the analysis of the rock structure around the Sureste Basin. Sharp regards Zama as an interesting oil well to be operated in 2017.
Talos Energy, a Houston based company founded in 2012, is the operator of the Zama Well. The private company is interested in the in the exploration, development, and production of oil and natural gas properties in the Gulf Coast and the Gulf of Mexico. Presently, the company is under the stewardship of Tim Duncan. He is the CEO and the co-founder oil Talos Energy.