Mexico has finally opened up its oil markets to private investment firms. The new initiative comes after the Mexican oil markets have sagged behind and were in need of a major boost. Previously, only the Mexican government run company called Petroleos Mexicanos was allowed to explore and extract for oil on Mexican territory. Both domestic Mexican companies as well as foreign companies from other nations are now welcome to invest in oil ventures in Mexico with these reforms.
A consortium of energy companies that includes Talos Energy, Premier Oil and Sierra Oil & Gas has taken advantage of the opportunity in Mexico. The trio had bidded on exploration and development rights of an offshore oil field in the Sureste Basin. They won the rights after bidding was open to foreign investors in 2015.
The oil well is called the Zama-1 well and it can hold as much as 500 million barrels of crude oil. It is located off of the Mexican state of Tabasco in the Gulf of Mexico. Early geologic samples and testing has shown that the site should be very fruitful in terms of the extraction of oil.
The biggest stakeholder in the venture is Sierra Oil & Gas, which is a Mexican energy company. Sierra Oil & Gas has a 40% stake in the deal. British firm, Premier Oil has a 25% stake. It is also the company that is doing the drilling and paying for the early exploration.
US based, Talos Energy meanwhile holds a 35% stake in the consortium’s venture in the Gulf of Mexico’s Zama-1 offshore well. Talos Energy will be operating the well once drilling is complete. The firm specializes in exactly these kinds of oil operations in the Gulf of Mexico and is expected to deliver success in the venture.
It is important to note that Talos Energy is a private firm that is based in the US energy center of Houston, Texas. Talos Energy has seen major investment recently from private equity firm Riverstone Holdings LLC and investment management company Apollo Global Management LLC. Talos Management LLC meanwhile is the managing arm of Talos Energy LLC and oversees the energy company’s operations.