When Pemex, a Mexican state-owned petroleum company, tried to develop the Gulf of Mexico on their own, they immediately knew that they cannot do it alone. A lot of companies tried and succeeded in developing the American side of the basin. To achieve the same success, Pemex knew that they need to dig with a partner. That’s how Talos Energy, along with Premier Oil and Sierra Oil & Gas, helped Pemex in its endeavor. The venture is not only a success, but it is a success expected to last for at least a decade.
Talos Energy, Premier Oil, and Sierra Oil & Gas were successful in buying the Mexican part of the gulf. This purchase was proven to be worth it because after digging for a while, Talos Energy found a 1,000-foot thick layer of oil-soaked sandstone. The oil inside the sandstone is expected to fill 2 billion barrels. This discovery even paved way for Talos to receive the “Discovery of the Year 2017” award from WoodMackenzie’s. During the initial auction, other big oil companies thought that putting their chips on Mexico’s table is too risky. But Talos Energy CEO Tim Duncan managed to turn the risk to an opportunity.
But it wouldn’t have been started if Talos Energy did not finish its part. They are the first to win the bid rounds, file an exploration permit, and social impact permit. According to Tim Duncan, the chief of Talos, partnerships are important, especially the partnership with locals. Having a partnership with Pemex is helping them in a lot of ways, including the local expertise of Pemex to the Mexican part of the Mexico Gulf.
Talos Energy is still developing the Gulf of Mexico and is the highest bidder on fourteen blocks of oil which is held by the Bureau of Ocean Energy Management. Talos is expected to pay $5.3 million to Mexico for royalty rate for the deepwater blocks. Duncan stated that he is happy on how Talos is turning into after its merge with Stone Energy. Right now, Talos is one of the fastest growing companies in the US and there’s no doubt that they will continue to grow in the next decade.
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