Mexico’s oil industry was nationalized in 1938, and since then, its energy sector has been a monopoly ran by the state. Almost 80 years later, the country has allowed back foreign investors into the sector. Three companies, Sierra Oil & Gas, Premier oil Plc and Talos Energy LLC, came together and started drilling the well on May 21.
Mexico voted to open up its falling oil industry to foreign investors and in 2015, the three companies were the winners of the exploration rights in the first bidding round. Zama-1 well, which is situated in the Sureste Basin off Tabasco state, is said to have an estimated 100-500 million barrels of crude oil. It is expected that it will take 90 days for drilling to be completed, an exercise which will cost Premier Oil Plc approximately sixteen million dollars.
According to Edison Investment Research Ltd’s analyst, Elaine Reynolds, by virtue of this well being the first non-Pemex well to be drilled in the country since it opened up its waters to the energy reforms process, it will be watched keenly by the industry. The structure of its basin implies that this project has a high chance of succeeding. Zama is said to be one of the most fascinating explorations this year.
Talos Energy LLC, one of the three investors, owns 35% and is the operator of the well. Sierra has a 40% stake and Premier has a 25% stake. Talos Energy was started by Tim Duncan and his partners. It has over 120 employees in Houston and has $600 million in equity. The company acquired a Helix Energy Solutions oil and gas subsidiary for $620 million and is open to acquiring more shares in lucrative businesses in the industry.
According to Workplace dynamics, Talos is, among local small businesses, the best workplace. When it comes to compensation, the company is categorized as average, but its employees are rewarded with a portion of the company’s equity. Duncan is a firm believer in rewarding talent. He believes that every move can break or make Talos and encourages his staff to share ideas that they may have for vetting and implementation, where applicable.