The Mexican government has been the sole player in the country’s oil trade. But, all is about to end now. Talos Energy, a private firm is shining in the industry. The results are after the government approval of foreign companies to take part in the trade.
Talos Energy is engaging in the partnership with Mexico Sierra Oil and Gas with Premier Oil Plc. The three firms are launching an offshore exploration. In the past, Petroleos Mexicanos, the state-run monopoly firm has been doing these operations since 1938.
The partnership between the three firms is very advantageous to them. They are now in a position to share the expenses and resources together. The companies brainstorm on various ideas ensuring all the ideas pass the different scrutiny levels at the boardroom. As such, the businesses only implement the best available alternative.
The cost of investment regarding time and resources is also very high. Drilling crude oil from the Zama-1 basin will consume more than $16 million. The drilling exercise will take the Talos Energy firm ninety days to complete. Once complete, the reservoir can produce 100 to 500 barrels of oil.
Tim Duncan is the chief financier of the project. He has contributed slightly over $600 million towards the entire exercise. With such a massive investment from a single investor, you can see how profitable the venture is.
In the growth plan, Talos Energy has acquired all the assets that the Gulf of Mexico owned. Before the takeover, Gulf of Mexico was producing over 16000 barrels of crude oil in a day. Alongside the assets, Talos energy also acquired the staff, pushing the employees of the firm to 120.
The Talos Energy LLC has received some awards for its role in running of small enterprises. Duncan, the CEO of firm advocates dedication and teamwork as the main reasons for success. The management feels that they have made the right investment in the staff they have. These include receptionists, geoscientists, and the general staff.
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Mexico nationalized its energy sector in 1938, a move that converted all petroleum reserves, facilities, and foreign oil companies operating within her territories into government owned entities. The decision ultimately brought the Mexican energy sector to its knees. However, in a rare change of heart, the country has decided to allow foreign companies back into her energy sector. Many international companies such as Premier Oil Plc, and Talos Energy LLC have welcomed the move by initiating their operations in Mexico.
Premier, London based and Talos, Houston based in conjunction with Mexico based Sierra Oil & Gas company , undertook to work together in drilling their first oil well, the Zama-1, in the Sureste Basin located in the state of Tabasco. The oil well will be the first to be owned by a private company in over 80 years. The well is estimated to hold crude oil in excess of 500 million barrels. The well is expected to be functional in three months’ time.
Analysts from many companies have welcomed the move by Mexico. Elaine Reynolds, an analyst at Edison Investment Research Limited, observed that the Zama well being the first non-Pemex well, would be monitored closely by all players in the industry. He further suggested that the project has a high chance of success owing to the structure of the basin around the well. Another analyst, Charlie Sharp referred to Zama as an interesting well because of the implications the well would have on the Mexican market.
Talos energy has witnessed unprecedented growth over the last few years. The company owns a 35% stake in the Zama well, and it has been tasked with the responsibility of managing the operations of the well. Talos recently acquired an oil and gas producing subsidiary of Helix Energy Solutions for $620 million. There have been talks of the company planning to make another major purchase at an estimated cost of over $500 million.
According to WorkplaceDynamics, Talos trounced its peers to emerge as the best workplace in 2013. Tim Duncan, the chief executive of Talos, notes that Talos employees are continually empowered to own part of the company. One of Talo’s employee, Ash Shepherd, was recently honored by Thirty Under 40.