Talos Energy has secured the approval of the National Hydrocarbons Commission (CNH) for its $325m appraisal plan for the Zama oil discovery in Sureste Basin offshore Mexico.

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Image: Talos Energy’s appraisal plan for Zama oil discovery gets CHN approval. Photo: courtesy of num_skyman/Freedigitalphotos.net.

The US-based oil and gas company said that the Mexican oil & gas regulator’s approval of the appraisal plan is a major approval needed to begin the appraisal of the Zama oil discovery.

Currently, CNH is looking into the application for drilling permits, which are needed to begin drilling operations.

Talos Energy president and CEO Timothy S. Duncan said: “This approval allows us to maintain an accelerated schedule of investments on the Zama project in Mexico, and begin drilling operations on the appraisal plan by the end of this year.

“This should allow us to stay on track for our ultimate goal of achieving initial production from the Zama discovery in 2022, thereby providing local jobs, increasing government revenues to Mexico, and materially adding to Mexican domestic production.”

Talos Energy expects to spud Zama-2, the first appraisal well of the program, in the fourth quarter of 2018 with the appraisal program slated to be wrapped up by mid-2019.

The Zama oil discovery was made in Block 7 at a water depth of nearly 165m, following the drilling of the Zama-1 exploratory well in July 2017. The offshore Mexican oil field is estimated to hold 1.4-2.0 billion gross barrels of oil.

Talos Energy is the operator of Block 7 with a stake of 35% and is partnered by Sierra Oil and Gas, and Premier Oil, which own stakes of 40% and 25%, respectively.

The Block 7 partners have given a contract to a subsidiary of Ensco to use the Ensco 8503 semi-submersible rig to execute the appraisal plan of the Zama oil discovery.

Under the contract, the Ensco 8503 semi-submersible rig will drill two wells, a sidetrack and a well test, starting from November.

According to Talos Energy, three new reservoir penetrations will be made as per the appraisal plan. The Zama-2 appraisal well will be drilled to nearly 500m to evaluate the Marte exploration prospect, which is believed to have an unrisked recoverable resource range of 60-150MMBoe.