Some huge news has been trending around the gas and oil industry. Thanks to deregulation of the industry both in America and Mexico, companies have had more options for drilling. Thanks to deregulation in Mexico, the state monopoly has been broken, allowing them to sell blocks of land to prospective oil drillers. What should have been an easy way to solve a big problem in the area didn’t turn out the way Mexico had hoped. There was not as much interest in their in their shallow-water auction blocks as initially expected.
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— talosenergy (@talosenergyllc) February 12, 2013
This has been largely attributed to the oil price crash where in two years oil went from over $100 a barrel, to now just $26 a barrel. If this was not enough to scare away investors and floundering oil companies, Mexico’s political instability was also a turn-off for many companies.
Leading the Way
The hopes did not look high for Mexico until Talos Energy stepped in. They were willing to take the big risks where other oil companies would not. And while for a while this seemed like it may have been a mistake, their risk-taking ventures have finally paid off with the discovery of a massive oil well off of the coast of Mexico. Considered a big beast of a well with over 2 billion barrels of oil potentially, Talos has rekindled interest in these shallow-water block auctions, something that will benefit the Mexican economy, and the American one.
The renewed interest in possible drilling sites is good news during a dire time for Mexico. The revenue they can generate from the feeding frenzy that is likely to ensue can really bolster their economy. This will help America as well because it will increase domestic oil production, and lower the prices that are usually at the whims of unstable foreign politics.
This win-win partnership may not have happened if it wasn’t for companies like Talos Energy and partners, who were willing to take risks and bet on the unknown. Their discovery is likely to spur and inspire others to come to the area and drill for the benefit of all.
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