Talos Energy : A look into a rare partnership with Pemex
Recently Talos Energy along with project Zama discovered over 2 billion barrels of oil in the southern Gulf of Mexico. Much of the oil found in their block has been speculated to cross into Pemex’s (Mexico’s state-run oil company) adjacent block. In light of this, Talos Energy CEO Tim Duncan quickly discussed an immediate proposal to the Mexican government to form a partnership with Pemex. The partnership will allow each of the oil companies to be able to share their data with one another ultimately benefiting everyone.
Although partnerships aren’t rare in the business/oil industry a partnership with Pemex would be a rare move for the Mexican government. Since it’s establishment in the 1930’s, Pemex has held a position of not doing business with any private company. Although this decision allowed Pemex to flourish and grow to the levels of some of the worlds largest oil companies, allegations of corruption soon brought that to an end. Funds where cut almost to a third of their previous budget and Pemex profits and production began to decrease.
Despite this tradition, CEO Tim Duncan would reach out to President-elect Andres Manuel Lopez Obrador who has advocated during his campaign for president for the strengthening of Pemex. This would include bringing back funds and forming partnerships with outside entities to increase their production. The partnership was quickly accepted with Mexico’s oil regulator approving an appraisal plan to continue the Zuma project. Talos Energy themselves have invested an additional $325 million to begin drilling on two new wells. Drilling is expected to begin in late November of 2018 and should be producing over 150,000 barrels of oil by 2023. Although much of the fracture has not been agreed on, Tim Duncan says that this might be a good thing because it allows Talos Energy to continue their research in the area and generate stronger data before drilling begins.
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