Mexico is allowing foreign players in its energy markets once again after nearly 80 years. Now, this has led to a private company drilling an offshore oil well. This is in the Mexican waters. This is a joint venture that is being undertaken by Premier Oil PLC which is based in London, Talos Energy LLC based in Houston and Sierra Oil & Gas of Mexico. The drilling of the well began on May 21. This is a major event as it is the first offshore well that is not being launched by the state-run Petroleos Mexicanos. This is because since 1938, the oil industry in Mexico had been nationalized and all the exploration oil wells were being drilled by the state run monopoly only.

 

This is the Zama-1 well. It is located in the Sureste Basin. It is situated off the state of Tabasco. It is estimated that it holds 100 to 500 million barrels of crude oil.

 

It will take 90 days for Talos Energy and others to complete this drilling. This joint venture will cost nearly $16 million. It was in 2015 that these three companies had won rights to this prospect. This was done through bidding once Mexico allowed private investment for its ailing oil industry.

 

This is the first well to be drilled by private players after the Mexican waters were opened up to foreign investment. Hence this venture is being keenly observed by everyone in the industry. The structure of this basin reflects that this project will have a high chance of success.

 

It can have interesting implications for the oil market in Mexico. In fact, Zama is being portrayed as being among the most interesting of the exploration wells being drilled in this sector in this year.

 

Talos Energy will be the operator of this exploration well. It is the owner of 35% stake in this joint venture. Other players like Sierra hold 40% stake while Premier has 25% stake in this venture.

 

The outcome of this oil exploration well drilling will have a far-reaching impact on the Mexican oil industry and its future.