Major oil find a boon for Talos energy, Mexico.

Posted on June 30, 2018

Houston, TX.-based Talos Energy made a major oil field find in the Gulf of Mexico in July of 2017. They found approximately 2 billion barrels of oil 11,000 feet down in waters about 500 feet deep. An analyst at the energy research firm Wood Mackenzie, Pablo Medina, says the find is one of the top 20 largest in the past 20 years in this kind of shallow-water enviornment.

In addition to being a boon for the small energy company of about 200 employees and about $500,000,000 revenue annually, this find is also a boost for the economy of Mexico. Three years ago the government of Mexico deregulated the oil and gas industries and invited foreign companies to invest and build inside the nation in hopes of stabilizing the industry. Before this the countries oil and gas resources and infrastructure were controlled by the state-run monopoly PEMEX.

In the initial offering of blocks of water for drilling there was little interest from the larger companies. When 14 blocks were offered for sale only two sold, and both to Talos. Other factors than uncertainty about the returns were in play during this sale: The oil market had crashed just the year before, Mexico was having a difficult time preventing oil pipeline thefts in addition to other national instabilities and the North American Free Trade Agreement is in an uncertain status due to the 2016 U.S. Presidential election and its results.

Talos Energy was happy with the results immediately. They had favorable indications of a find and when the drill finally and literally “struck oil” on July 4th of 2017 the CEO of Talos Energy, Tim Duncan, brought out the red wine to celebrate. With competition from companies like Exxon, Chevron and the Italian oil company Eni now lining up Talos says it will still take about 4 years to fully develop the field, with Duncan commenting “…you just simply can’t make a decision on how to develop something this big that fast.”

Talos plans to continue to drill as far down as 14,000 feet before they begin to pull the crude out of the ocean.

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