1938 was the last time it happened: A oil well was drilled off the shores of Mexico by Petroleos Mexicanos, a state-owned company at the time. On May 21, 2017, it happened again, this time as a joint project between three energy companies, Talos Energy LLC of Houston, Premier Oil Plc of London, and Mexico’s Sierra Oil & Gas. The drilling operation was expected to take ninety days to complete and cost around $16 million.The Zama-1 well is located off the coast of the Mexican state of Tabasco in the Sureste Basin and was expected to produce anywhere between 100 and 500 million barrels of crude oil. Elaine Reynolds, an analyst with Edison Investment Research Ltd. stated that the location made it likely to be a success because of the geological characteristics of the basin.
“As the first non-Pemex well to be drilled since the opening up of Mexican waters as part of the country’s energy reform process, this well will be keenly watched by the industry,” she concluded. Analyst Charlie Sharp of Canaccord Genuity Ltd. also noted the project would be the most watched this year because of its importance after the Mexican reforms to their energy market. The country’s goal to attract foreign energy companies to its oil reserves has begun to pay off.
Ash Shepard, Talos Energy’s commercial manager in Mexico won Oil and Gas Investor’s Thirty Under 40 award for his part in making the initial contracts a reality, which were the first to be finalized since the 2013 Constitutional Energy Reforms there. In part due to his own efforts, Talos Energy had become the first foreign energy company to develop an oil well in Mexico since 1938.Headquartered in Houston, Talos Energy LLC is a private energy firm with a focus on exploration and production of oil reserves in the Gulf Coast and Gulf of Mexico. The company is well funded with backing from Riverstone Holdings LLC, Apollo Global Management LLC, and their own management.