Mexico nationalized its oil industry in 1938. The nationalization of the oil industry meant that the Mexican federal government would own all the petroleum reserves, facilities, and foreign companies operating in the oil industry. Subsequently, the Mexican oil industry has been underperforming, and 80 years later, the government has decided to open the industry to private investors.
Mexico decided in 2015 to accept private investors in its oil industry. Three companies placed their bid and won rights to explore oil in in the Sureste Basin off the state of Tabasco. The three companies, Premier Oil, Talos Energy LLC, and Sierra Oil & Gas, joined hands to drill their first oil well, the Zama-1. It is the first non-Petroleos Mexicanos well since 1938. Experts approximate the volume of oil present in the well to be between 100-500 million barrels.
Some analysts have welcomed the move and termed it progressive. Elaine Reynolds, an analyst at London-based Edison Investment Research Ltd, lauded the move by the Mexican government to invite other players to its oil industry. He further added that Zama-1 well being the first non-Pemex well, would be under a keen scrutiny from all players in the oil industry. Charlie Sharp, an analyst at Canaccord Genuity Ltd., echoed Reynold’s sentiments. Sharp referred to Zama well as “one of the most interesting exploration wells to be drilled in the sector this year,’’ perhaps based on the implications the well would have on the Mexican oil market.
The decision to allow Talos manage the operations of the Zama well could have been informed by the entrepreneurial nature of Talos’ employees. For instance, Ash Shepherd the commercial manager at Talos Energy Mexico was recently the Thirty Under 40 honoree for his efforts of enabling Talos to operate in Mexico. All Talos employees have reported being satisfied with their work environment which has been made possible by the chief executive of Talos, Tim Duncan. WorkplaceDynamics this year named Talos the best workplace among local small businesses.
Talos Energy is headquartered in Houston; the company has witnessed an exponential growth over the last few years. The company recently acquired an oil and gas producing subsidiary of Helix Energy Solutions. It plans on acquiring another company with a budget of over $500 million. In the coming years, Talos is expected to increase the number of its employees immensely.