The News
Saturday 20 of July 2024

Historic Oil Discovery

An offshore drilling oil platform,photo: Flickr
An offshore drilling oil platform,photo: Flickr
“I guess Mexico will be oil rich again”, President Peña Nieto told reporters

U.S. Energy Secretary Rick Perry’s visit to Mexico and President Enrique Peña Nieto last Thursday really made no sense. And upon checking out the press release from the President’s press office it even makes less sense.

They allegedly held a polite good will chat but that was it.

But the bomb had been dropped the day before in Houston, only that the news were kept guardedly hidden — as usual — by President Peña Nieto’s press office and of course, now Secretary Perry’s much touted visit to Mexico finally made sense.

Let me share with you part of a press release made public in Houston the day before Perry’s visit:

“Talos Energy LLC Announces Historic Oil Discovery Offshore Mexico.”

“Houston, July 12, 2017 – Talos Energy LLC (“Talos” or the “Company”) as operator, together with its joint venture partners Sierra Oil and Gas S. de R.L de C.V. (“Sierra”) and Premier Oil Plc (“Premier”), is pleased to announce that the Zama-1 exploration well, offshore Mexico, has discovered oil. Talos holds a 35% participation interest with Sierra and Premier holding 40% and 25% participation interests, respectively.

“The Zama-1 well is the first offshore exploration well drilled by the private sector in Mexico’s history. The well, located in 546 feet (166 meters) of water and approximately 37 miles (60 kilometers) from the Port of Dos Bocas, has reached an initial shallow target vertical depth of approximately 11,100 feet (3,383 meters).

“Preliminary analysis indicates:

“- A contiguous gross oil bearing interval of over 1,100 feet (335 meters), with 558-656 feet (170-200 meters) of net oil pay in Upper Miocene sandstones with no water contact.

“- Initial gross original oil in place estimates for the Zama-1 well range from 1.4 to 2.0 billion barrels, exceeding pre-drill estimates, some of which could extend into a neighboring block.

“- Initial tests of hydrocarbon samples recovered to the surface contain light oil, with API gravities between 28° and 30° and some associated gas.”

This was not even mentioned – at least not publicly – after the Perry-Peña gathering and to boot it, apparently one thing had nothing to do with the other.

Though there are still no significant reactions, expect them to be virulent in the nation, particularly stemming from the political left wing – an important majority – particularly as it was about a year ago when President Peña Nieto, in defense of his highly questioned Energy Reform, had announced that the goose with the golden eggs oil had meant for Mexico “has dried up.”

The first comment came last Friday from La Jornada daily leftist newspaper Enrique Galván Ochoa – whom I have known as an oil industry expert since 1980 – who says that it only comes to show that Peña Nieto “knows nothing about poultry.”

On Saturday, the President gave an impromptu press conference after a mini marathon he ran with other people at Chapultepec Park and of course the main question was about certifying the truly massive oil discovery -1.4 to 2 billion barrels is no small fry – and he could no longer hide the cackling hen in the kitchen and had to say something about it.

“I guess Mexico will be oil rich again”, President Peña Nieto told reporters.

Except now under the contract with the three drilling companies – who will also get to pump the crude – the company is under obligation of selling the oil to the Mexican government but that’s not where the real money is at. Premier Oil’s shares skyrocketed upon the announcement and that’s where nationalists will start hitting Peña Nieto, because that money could have gone to the government.

Expect a lot of flak to come the President’s way in the future. For one – and this can prove to be poisonous politics for Peña Nieto – one of the main investors in the “Mexican part” of the joint American, Mexican and British venture – is Hipólito Gerard Rivera, brother in law to former President Carlos Salinas de Gortari and Sierra Oil chairman, who is said to be the brain behind the presidential chair nowadays.

The first question beginning to roll downhill is if the joint venture headed by Sierra Oil got the drilling concession not in a rigged rights awarding on influence from former President Carlos Salinas. There will be more but that’s already the tip of the scandalous iceberg on the President’s way.

Well, now we know the real reason for Rick Perry’s visit.