From Bloomberg
For the first time in almost 80 years, a private company has sunk a new offshore oil well in Mexican waters — the latest step in the country’s drive to allow foreign competitors back into its energy markets.
A joint venture of London-based Premier Oil Plc, Houston’s Talos Energy LLC and Mexico’s Sierra Oil & Gas began drilling the well May 21, Premier said in a statement Monday. It’s the first offshore exploration well to be launched by anyone other than state-run monopoly Petroleos Mexicanos since the country nationalized its oil industry in 1938.
The Zama-1 well, in the Sureste Basin off the state of Tabasco, holds an estimated 100 million to 500 million barrels of crude, Premier said in the statement. Drilling is expected to take up to 90 days to complete, at a cost to Premier of $16 million. The three companies won rights to the prospect in 2015, in the first round of bidding after Mexico voted to open its ailing oil industry to private investment.
“As the first non-Pemex well to be drilled since the opening up of Mexican waters as part of the country’s energy reform process, this well will be keenly watched by the industry,” Elaine Reynolds, an analyst at London-based Edison Investment Research Ltd., said in a note to clients Tuesday. The structure of the basin suggests the project has “a high geological chance of success.”
Given the implications for the Mexican market, Zama is “one of the most interesting exploration wells to be drilled in the sector this year,” said Charlie Sharp, an analyst at Canaccord Genuity Ltd., in another note.
Closely held Talos is the operator of the well and owns a 35-percent stake in the venture. Sierra holds 40 percent and Premier, 25 percent, according to Premier’s statement.
From Premier
Premier is pleased to announce that the Zama-1 exploration well in Block 7 (Premier equity 25 per cent) in the shallow water Sureste Basin, offshore Mexico, was spudded at 0630 on 21 May 2017. This is the first exploration well to be drilled on acreage awarded in Mexico’s first international licensing round in 2015.
The well’s principal target is the low risk Zama prospect with supportive direct hydrocarbon indicators in the Tertiary clastic reservoirs. The Zama structure is estimated to have a P90-P10 gross unrisked resource range of 100-500 mmbbls. The well is expected to take up to 90 days to drill both the Zama prospect and the secondary target, Zama Deep, at a total cost to Premier of $16 million.
The partners in Block 7 are Talos Energy (operator, 35 per cent), Sierra Oil and Gas (40 per cent) and Premier (25 per cent).
