An international consortium of oil companies has struck oil in shallow waters off the coast of Mexico in what could be one of the five largest discoveries in the past five years, and among the top fifteen in the last two decades. The find could be good for 1.4 to 2 billion barrels of light crude.
The Financial Times:
“What really makes this unique is that this is truly an exploration project,” Tim Duncan, president and chief executive of Talos, the block’s operator, told the Financial Times. It was what the industry terms a “wild cat” drill — in an area that had never before been explored. The nearest well drilled was 20km away and had come up dry. […]
Zama is twice as big as Trion, a deepwater field in the north of the Gulf that BHP Billiton partnered with Pemex to develop, in the first joint venture in the Mexican company’s 79-year history.
Investment in Trion is estimated at more than $11bn, and Zama is expected to cost “a fraction” of that because it is in easier-to-access shallow waters. “It’s a win-win to have something this big,” said Mr Duncan. Once the block enters production, the government will take a 68.99 per cent share of the profit from each barrel produced.
This is a big win for Mexico, which two years ago decided to allow private companies to participate in energy projects. If this find turns out to be as significant as early indicators seem to have it, expect even more international companies to get interested.
It’s also yet another reminder of just how off the “peak oil” prognosticators have been. This is a substantive find of easy to process light crude in shallow waters; no fracking or next-gen technological requirements will be necessary to exploit it. Greens may not love it, but the age of oil appears to not quite yet be over.