Talos, Premier make major historic oil find offshore Mexico

  • Talos, Premier make major historic oil find offshore Mexico

Talos, Premier make major historic oil find offshore Mexico

Houston-based Talos' discovery comes just months after Eni confirmed it had found oil in the Amoca-2 well, which it said was the first well drilled by an global oil major offshore Mexico since the country's 2013 Energy Reform. "It is one of the 15 largest shallow-water fields discovered globally in the past 20 years".

When Premier Oil and its partners spudded the Zama-1 exploration well in May, the estimates were for as much as 500 million barrels of oil in place.

Later on Wednesday, Mexico will tender the latest batch of productive areas in the sixth auction open to private and foreign producers since the energy reform.

The well, where drilling began May 21, is located 60.5 kilometers from the port of Dos Bocas, Tabasco, in a 166 meter water link.

Sierra Oil and Gas, a Mexican company, is the majority stakeholder in the partnership. According to Tim Duncan, president and chief executive of Talos, the block's operator, development of the prospect is going to start relatively soon with well appraisement scheduled for 2018 and production beginning between 2023 and 2025.

An global consortium led by Mexico has found a significant oil discovery in the Gulf of Mexico, which is expected to draw investments from major oil firms.

The Zama discovery "is the most important achievement so far of Mexico's energy reform", Pablo Medina, the senior upstream analyst for Latin America at Wood Mackenzie, said by email.

Initial samples brought to the surface revealed light oil with API gravities of between 28 and 30 and some associated gas.

Talos is setting a liner to protect the discovered reservoirs before drilling deeper objectives to a total vertical depth of 14,000 ft.

"There are no plans for immediate tests in the well", Duncan said. "We see a bright future for shallow Mexican waters in the coming years".

Sierra, backed by Blackrock Inc., Riverstone Holdings and EnCap Investments, has a 40% stake in the project, Talos 35% and Premier 25%.

Talos and Premier were awarded Blocks 2 and 7 in 2015, under Mexico first tender of oil and natural gas fields in over 80 years.