In an endeavor to ensure the continued prosperity of their countries, some governments tend to place strong controls on the exploitation of their resources by foreigners. However, this trend has been reducing in recent years as more and more governments have discovered that liberalization can guarantee even greater returns. One country that has done so fairly recently is Mexico. For the first time in more than eight decades, the Mexican government is allowing foreign companies to operate oil wells within its territories. The American company, Talos Energy has taken advantage of the industry’s liberalization to set up operations in Mexico. Given the company’s track record in recent years, its operations will likely bring great returns to Mexico.
Talos Energy is currently operating an offshore oil well in Mexico named Zama-1. It commenced operations on the well in May 2017. The well is considered to be one of great potential as it could up to 500 million barrels. Talos owns the rights to the well in collaboration with two other companies: Sierra Oil and Gas, and Premier Oil Plc. The local company, Sierra has the largest stake in the partnership (40 percent), followed by Talos Energy(35 percent), with British-based Premier Oil having the smallest stake.
Brief Overview of Talos Energy
Talos Energy fairly new entrant into the global oil and gas industry. The company was formed in 2012 and is based in Houston, Texas. The company has operations on various stages of oil’s production and supply chains, including exploration, drilling, extraction, and development. Talos’s greatest single investment thus far is in its Mexican operations.
Talos Energy is doing quite well for a company of its size. The initial capital of $600 million with which the company was formed is a mere portion of what some of its competitors spend every year. Further, due to the significant barriers to entry found in the oil and gas industry, most of the biggest players are those that were formed decades ago. Somehow, however, a five-year-old company is managing to go toe-to-toe with these large players.
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