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The lesson in Mexico exploration and production is strike quickly and move fast, according to Timothy Duncan (pictured), the president and director general of US firm Talos Energy, which announced an historic Mexico oil and gas find in July.
The find, at block 7's Zama-1 well, which was spudded in May, was the first offshore exploration well drilled by the private sector in Mexico's history, and was awarded in last year's first shallow water auction. Talos is developing the block with JV partners Premier Oil and Sierra Oil & Gas.
Speaking at an energy conference in Mexico City on Tuesday, Duncan acknowledged that, while it was successful with its bid for block 7, it was unsuccessful in other bids. Although that is bad news for the company, it is good news for Mexico, as it underscores the interest among many firms to develop the blocks on offer, he said.
"We couldn't afford to sit around and wait, and we can only be so aggressive going forward to cover our return on investment and meet our investors' expectations, but we don't anticipate it getting any easier to grab E&P contracts in Mexico, although that is a great opportunity for Mexico," Duncan said.
Mexico will hold its next auction, for deepwater fields, on January 31, for which 25 firms have registered so far. The auction, called Round 2.4, is offering blocks in the Perdido area, Cordilleras Mexicanas, the Salina basin and the Yucatán shelf.
Duncan said Talos' strategy is to find operating conditions that fit the company's skillset. He also lauded the energy reform and Mexico's design of the auction process.
"The [hydrocarbons regulator] CNH did a great job in putting together the regulations, and the success of the auctions depends largely on that, they are still listening and I give them a lot of credit for putting together a good set of rules."
He also hinted that Talos may seek to partner with state oil firm Pemex in developing block 7.
"The energy ministry would prefer companies to make rational decisions among themselves, and that's the position we're going to take with Pemex, and we were impressed with their goodwill, their willingness to listen, and we're optimistic going forward in terms of working with them. It's very early in the Zama well process, and Pemex understands that all parties benefit from collaboration, and we're going to keep that attitude," he said.