Mexico nationalized its oil industry in 1938, and Petróleos Mexicanos better known as Pemex was created to solely oversee all the activities in the oil sector; the Mexico’s government owns Pemex. For over 79 years, Pemex controlled Mexico’s oil industry. However, in 2015, Mexico voted to allow foreign companies to own and operate oil wells and other oil facilities within her borders.
Three companies won rights to prospect oil in Mexico: Premier Oil, Talos Energy, and Sierra Oil & gas. Talos is an American company, Premier is based in the UK, and Sierra is a Mexican firm. The three companies are currently undertaking their first venture, the Zama-1 well. The well is located in Sureste Basin off the state of Tabasco. In a statement issued by Premier in May 2017, the well would take three months to reach completion. Premier said that it would contribute $16 million towards the venture. Zama is estimated to hold over 500 million barrels of the crude natural resource. In the joint venture, Premier owns 35%, Sierra controls 40%, and Talos, which is the operator of the well, owns 35%.
Financial industry pundits have weighed in on Mexico’s decision to allow foreign players back into her oil industry. Elaine Reynolds of Edison Investment Research indicated that Zama would be the center of attention for players in the oil sector. He added that Zama 1 would likely be a success as shown by geological dynamics. Charlie Sharp of Canaccord Genuity suggests that Zama is an interesting well owing to the implications it would have on the Mexican market.
Talos Energy, the operator of the Zama well, is headquartered in Houston. The private company focuses on oil & gas exploration and acquisition of businesses in the oil & gas industry. The company’s activities are targeted at Gulf of Mexico and Gulf Coast. Talos Energy is associated with Apollo Global Management and Riverstone Holdings LLC.
In 2013, WorkplaceDynamics indicated that Talos was the best workplace among small businesses in Houston. The CEO of Talos Tim Duncan has ensured that Talos’ employees own part of the company and are therefore motivated.