Talos Energy in conjunction with their Zama project recently announced the discovery of over 2 billion barrels of oil in the Gulf of Mexico. The area in question is however located adjacent to a block owned by PEMEX, Mexico’s state-run oil company. Tim Duncan, Chief Executive Officer of Talos Energy immediately called for a partnership with PEMEX in order to better research the areas around the newly discovered oil deposit. The partnership would include the sharing of data with PEMEX as well as a consortium with Britians Premiere oil and Mexico’s Sierra Oil and Gas.
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The goal of reaching a partnership deal with PEMEX was however seen as wishful thinking at the time. This was due to a long-standing tradition by the Mexican government to bar all partnerships with outside entities. The practice goes back to the early days of the current Mexican government and was placed to protect the countries resources. However, in the years to come, PEMEX would grow to be so corrupted that the Mexican government cut the funding and began a 14-year slump for the oil company.
Tim Duncan, however, would find his opportunity in recently elected President-elect Andres Manuel Lopez Obrador. Throughout his campaign, President-elect Obrador promised the restoration of PEMEX to its once glory days of economic power. Both parties quickly agreed to a partnership and with the quick approval of the Zama project appraisal plan by Mexico’s oil regulator the plan to explore two new wells was underway. The Zama project calls for an investment by Talos Energy and partners of $325 million to drill two new wells and conduct research on other areas of the Gulf of Mexico throughout 2019. Drilling will begin in late November of 2018 with an estimated 150,000 barrels per day being produced by 2023. Although Talos Energy stated that they will still need time to construct additional platforms, the time will allow them to conduct patient and precise research in order to collect the best possible data.
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