Talos eyes international expansion as Mexico frustrations mount

Houston-based oil and gas company Talos Energy wants to appoint a CEO who can accelerate its international expansion, with development of the Zama shallow water field in Mexico stalled more than seven years after its discovery.

Interim CEO Joseph Mills told a Q3 conference call Tuesday he was frustrated by the slow development of Zama.

Front-end engineering and design (FEED) work at the US$4.5bn development is ongoing, but there has been no sign of the final investment decision (FID) that was expected in 2024.

"We're seven years into it and still have not FIDed it," Mills said. "We definitely stepped on some landmines there."

For the CEO position, Talos is interviewing executives who have experience of international developments.

"Part of what the new CEO is going to help us avoid is stepping on landmines as we think about international projects," Mills said.

Following a series of acquisitions in recent years, Talos is now the fifth largest operator in the US Gulf of Mexico. 

Mills said that with production of around 34Mb/y, the time was right to chase bigger targets and "look beyond our shores."

Former CEO Tim Duncan resigned in August.

Zama

While Zama was discovered by Talos, in 2022 Mexico's energy ministry controversially appointed state-owned oil company Pemex as operator.

The field contains an estimated 750Mboe. At 180,000b/d, Zama's expected peak production will represent over 10% of Mexico's current oil output.

Talks with Slim

Over the course of this year, the family office of Mexican multibillionaire Carlos Slim has doubled its stake in Talos to around 24%.

In October, Talos implemented a poison pill scheme designed to prevent Slim from gaining control of the company without paying a premium.

Mills said Tuesday that Talos "will continue to have open and constructive conversations" with Slim's family office.

Slim is a major supporter of the current Mexican government. His Grupo Carso conglomerate has a 49.9% stake in Talos Mexico, the local subsidiary of Talos Energy. 

Talos Mexico has a 17.4% stake in Zama and operator Pemex holds 50.4%.