There has been some big news coming out of Mexico for 2017. Offshore oil well drilling is the hot topic and if everything goes as planned, Mexico’s ailing oil market will definitely come back to life. Since 1938, Mexico’s oil market has been closed to foreign entities and this will actually be the first time in 80 years since an oil well has been sunken in these waters. The Zama-1 well is being drilled by a joint-venture deal that’s comprised of three energy giants. This includes Mexico’s Sierra Oil & Gas,Houston’s Talos Energy and London-based Premier oil.
How important is the project? With the impending success of the drilling in the Sureste Basin, Mexico can expect a huge return on investment in the future. The drilling just so happens to be off the coast of the Tabasco State in Mexico. This specific area is expected to hold between 100 million to 500 million barrels of crude oil. With such huge amounts, the nation of Mexico could totally revamp its image on a global scale. Back in 2015, these three energy giants won the prospective rights during the bidding stage. Actual costs of the drilling project is at an estimated $16 million. Like the old saying goes, “you’ll have to spend money to make money” and this notion rings true on all levels.
The Zama-1 well is also known as a non-Pemex well, and it will go down as one of the very first to be drilled since Mexico opened up its waters for foreign trade. All of this progression falls under the country’s energy reform process. Analyst Elaine Reynolds of London-based Edison Research stated that “the project will be keenly watched.” Every measure is being taken here for the success of the project. Thanks to the structure of the basin itself, there’s a high geological chance of success.
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