(Bloomberg) — The Mexican oil industry has a, long history of tight privatization laws but all this may soon be changed. For the first time in almost a century, a joint project has been permitted to construct an oil well in Mexican waters. This appears to be the first of many steps to open up the Mexican Oil Industry.
The joint venture that led to the monumental project was initiated by Houston’s Talos Energy LLC, Mexico’s Sierra Oil and Gas and London’s Premiere Plc. these three companies won the rights to begin the drilling project in an auction held not long after Mexico voted to open its faltering oil industry to foreign investment and expansion.
Since the country nationalized their oil supply back in 1938, there has never been an offshore drilling project launched by anyone other than the state-owned oil company PEMEX (Petroleos Mexicanos).
The oil well was dubbed Zama-1 and is planned for the Sureste basin off the coast of Tabasco. This basin is projected to hold as much as 500 million barrels of crude according to analysis by Premier Oil Plc. The entire project will cost $16 Million and the cache of natural oils is expected to be depleted in only 90 days. The geographical features of this specific basin give experts high hopes for the success of the operation.
According to the chief analyst at Premier Oil Plc, Elaine Reynolds, this project will be under close scrutiny by many parties as the first in the movement Mexico is making toward energy reforms. The way the first well that is not part of the PEMEX is opened and managed will decide the future of others like it.
Talos Energy is the operator of the oil well and holds a 35% stake in the enterprise. Talos is a Houston based company that receives funding from Apollo Global Management LLC. Talos is focused on investigations and exploration of the Gulf of Mexico and entire Gulf Coast Region. As a leader in oil acquisition and exploitation, Talos Energy has a long history of success and brings experience and skill to the Zama-1 project.
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