Eni to invest $1.8bn in three Mexican oil fields

Talal Husseini 1 August 2018 (Last Updated August 1st, 2018 12:13)

Italian oil and gas giant Eni has announced an investment of almost $1.8bn in offshore oil rigs in the Gulf of Mexico over the next 22 years.

Eni to invest $1.8bn in three Mexican oil fields
Eni has said it will invest $1.8bn in the in three Mexican oil fields through to 2040. Credit: Eni.

Italian oil and gas giant Eni has announced an investment of almost $1.8bn in offshore oil rigs in the Gulf of Mexico over the next 22 years.

The investment will cover three Mexican oil fields – Amoca, Mizton and Tecoalli. The company foresees initial crude oil production of 8,000 barrels per day (bpd) in early 2019 from Amoca and Mizton, with the two oil fields capable of producing 90,000 bpd by 2022.  The Tecoalli field should see initial production beginning in 2024.

Eni CEO Claudio Descalzi said he is “extremely satisfied for this result, achieved thanks to a close and proactive cooperation between Eni and the Mexican authorities, and also proud that Eni will contribute to the innovation and progress of the country in a sustainable and positive manner for the society”.

He added: “Area 1 development will be a fast-track project in line with Eni’s strategy aimed at maximising the long-term value for all stakeholders and shareholders”.

As well as four oil rigs in the Gulf of Mexico, the development plan consists of 32 wells, a gas pipeline connected to the Tabasco coast, and the acquisition of a floating, production, storage and offloading (FPSO) vessel based at the Mizton field.

Mexican oil company Pemex will market the crude oil until the end of 2020, after which Eni is responsible for selling crude directly from the FPSO.

Eni plans to invest $232m this year as part of its work programme. The total value of the project is expected to reach $7.3bn, with the total government take – the sum of the project’s applicable tax and royalty payments to the state – estimated at $12.7bn. This is equivalent to around 92% of the estimated oil and gas produced over the project’s 25-year contract.

The company also announced that a discovery in the same project had raised its estimation of the current oil and gas production capacity from 1.4 billion to two billion barrels.

The National Hydrocarbons Commission (CNH) estimates the programme to hold Mexico’s fifth largest concentration of proven and probable reserves.

Pemex discovered the three fields but made them available in 2013 to private and foreign oil companies that were interested in developing oil rigs in the Gulf of Mexico.