Energy companies have long sought a path around the crude monopoly that has enjoyed Mexican waters for almost eight decades. It wasn’t until earlier this year that any company has been successful in breaching this territory and energy investors and speculators are wondering what it could mean for the future.
When the Mexican government first announced that it would consider opening its waters to private entities looking to invest in their energy industry, Talos Energy, along with partners Premiere Oil and Sierra Oil, lobbied the government for first drilling rights. That was back in 2015, and after more than a year of negotiation and preparation this joint venture begun drilling efforts in May. This is the first of any such business to take place in Mexico since 1938.
Talos and its partners begun their drilling venture at the Zama-1 well, located in the Sureste Basin, just off the coast of Tobasco. It’s estimated that there will be approximately 100 to 500 million barrels of crude oil produced from this drilling and it will cost $16 million to do so. But in order to reach these estimates drilling will have to complete within 90 days.
The news is being well received by speculators, many of which expect this venture to set a new direction of energy growth in coming years. According to analysts from Edison Investment Research, many will be watching how Talos and company are received at the end of their initial license. A positive reception by Mexico after keeping foreign companies out of its waters for decades could mean a shift in policy from many countries that have a reputation of keeping energy companies out.
About Talos Energy:
Founded in 2012, Talos Energy is an American oil and gas company. Having spent years specializing in deep-water and shelf crude production, Talos Energy has become and ideal influential force in the development and production of technologies and techniques in exploration.
The ambitious culture within Talos Energy has not only made it a leader in the energy industry but an entity that continually invites partnerships and develops lasting relationships with countries innovating energy. This rate of growth is exemplified by the development and sale of known companies like Gryphon Exploration Company and Phoenix Exploration Company.