Talos Energy, a Houston based offshore oil company has made an oil find off the coast of Mexico that may eventually produce more than 2 billion barrels of oil. The find by Talos is the most significant since the Mexican government decided to allow foreign companies to explore Mexican waters for oil three years ago.
Executives with the company report that the oil find is located 37 miles from Puerto Dos Bocas, a town located on the southern coast of Mexico. The well has been named Zama-1, is positioned in waters that are 500 feet deep and has so far reached depths of 11,000 feet. Talos Energy president Tim Duncan, says that the company believes the full development of the find will take approximately four years.
Industry insiders say the discovery is important and that more drilling should be done in waters south of the United States border. One analyst, working with the research firm Wood MacKenzie, Pablo Medina, says that Zama-1 is guaranteed to be one of the 20 largest fields to be discovered in shallow water over the last two decades.
Francisco Monaldi, a fellow with the Baker Institute for Public Policy at Rice University, echoes the sentiments of others in the industry who feel that more interest is likely to be given to drilling in Mexican waters. Monaldi also says that the news of the oil discovery is a welcomed one for the Mexican government.
The deregulation of the Mexican oil and gas market took place in 2014 and effectively broke the stranglehold that Petroleos Mexicanos, a state-operated company, had exercised over the industry. Mexico held auctions in 2015 allowing companies to purchase the rights to explore and drill in different areas. Houston area oil companies found this to be an inviting offer due to the close proximity of the new area now available for drilling.
Talos Energy is a relatively small company in the oil and gas industry with $500 million in annual revenues and approximately 200 employees working for the company. Talos believed early in the game that the field it had accessed would soon bear fruit. This belief was confirmed when drilling began.
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