The news that Mexico would end its government monopoly on its domestic oil exploration industry in 2014 sent shockwaves across the global markets. Mexico at the time was the 6th largest producer of oil in the world but its exports had been dropping dramatically for a quarter of a century.
Consider that in 1980 Mexico exported more than 50 percent of all its oil production. By year 2000 that had dwindled to just 7 percent. It was clear change was needed. That meant ending the monopoly held by PetroleosMexicanos (Pemex) since the 1930s.
When private firms around the world learned that Mexico would offer leases to foreign companies, one of the first to apply was a young upstart company from Houston by the name of Talos Energy LLC. The scrappy new wildcatter was founded by Timothy Duncan, a man steeped in oil exploration experience after earning a degree in petroleum engineering and working in management for a variety of companies for many years.
Under Duncan’s leadership, Talos Energy was awarded two leases for blocks in shallow Gulf waters out of 14 blocks offered. Talso wasted no time spudding a well off the coast of the Mexican state of Tabasco and struck oil — a big strike. The so-dubbed ZAMA-1 well may hold as much as 1.5 billion to 2 billion barrels of boe. Talos Energy was joined in ZAMA project by two international partners, Premier Oil of the United Kingdom and the Riverstone-backed Sierra Gas & Oil. The latter is a Latin American entity.
Talos is also going further with plans to spud more wells in blocks adjacent to where ZAMA found a massive cache of crude. At the urging or Mexican authorities, including newly elected President Obrador himself, Talos is moving aggressively to start putting infrastructure in place that will eventually bring oil to the surface. It is hoped that by 2023 the site will be fully operational and deliver from 100,000 to 150,000 barrels of oil per day.
That will be welcome news to world markets which are anticipating a slump in world production in the next 5 to 7 years.
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