Appraisal drilling of Mexico's first private offshore oil discovery Zama-1 is expected to begin in late 2018, at the earliest.

This is according to Premier Oil, a partner in the project operated by Talos, which in July this year struck the historic Zama oil discovery of more than a billion barrels.

The discovery was historic in that it was the first offshore exploration well in Mexico's history drilled by the private sector, following a recent energy reform.

In an update this week, UK-based premier oil said that the partners have begun talks with Pemex over a pre-unitization agreement to enable an appraisal program of the Zama discovery „in late 2018 or early in 2019.“

Preliminary analysis of the Zama well, located in Block 7, offshore Mexico, indicated initial gross original oil in place estimates for the Zama-1 well of more than 1 billion barrels, which could extend into a neighboring block.

Since the neighboring block, into which Zama discovery extends, is operated by the Mexican oil company Pemex, the Zama partners are now in talks over a pre-unitization agreement.

Such an agreement is used to define how parties to licenses which contain a common hydrocarbon reservoir will jointly evaluate the reservoir to submit a common field development plan, including a plan for unitization.

Zama-1

As previously said, the Zama-1 well is the first offshore exploration well drilled by a private company in Mexico. The well was spudded on May 21 some 60 kilometers (37 miles) offshore Dos Bocas utilizing the Ensco 8503 drilling rig, and completed in late July.

The entire Zama Field is estimated to hold more than 1.5 billion barrels of oil equivalent and is considered one of the largest shallow water fields discovered in the past 20 years.

Talos, the operator of the discovery, holds a 35% participation interest, while Premier Oil and Sierra Oil & Gas as its partners have 25% and 40% participation interests, respectively.