Friday, June 21, 2024

Italian oil company plans US $1.8-billion investment in oil fields

Italian oil and gas company Eni expects to invest almost US $1.8 billion in three Gulf of Mexico oil fields by 2040, according to a development plan approved by Mexico’s oil regulator this week.

The Amoca, Mizton and Tecoalli shallow water fields in Campeche Bay were discovered by state-oil company Pemex but put up for auction following the implementation of the 2013 energy reform, which opened the sector to foreign and private investment.

Mexico has now awarded more than 100 oil and gas contracts but Eni’s plan is only the second so far to get the green light from the National Hydrocarbons Commission (CNH).

The Italian giant, which is one of the world’s largest industrial companies, forecasts initial crude oil production of 8,000 barrels per day (bpd) in early 2019 from the Amoca and Mizton fields, a figure that will increase to 90,000 bpd by the end of 2020.

Production at the Tecoalli field is expected to start in 2024.

Eni’s development plan forecasts 32 wells, four platforms, a gas pipeline connecting to the coast of Tabasco and the acquisition of a floating, production, storage and offloading (FPSO) vessel.

The vessel will be used to separate and store oil and gas and eventually fill up tankers with crude. It will be based in the Mizton field.

Pemex will market the project’s crude output until the end of 2020 when Eni will have the option to sell crude directly from its FPSO vessel.

The company plans to invest US $232 million in the project through to the end of this year while its total value is estimated at around US $7.3 billion.

The CNH has estimated that the three-field project holds Mexico’s fifth-largest concentration of proven and probable reserves.

It is anticipated that the Mexican government will receive US $12.7 billion in taxes and royalty payments over the lifetime of Eni’s 25-year-contract, or about 92% of the estimated value of the oil and gas that will be produced.

Mexico has held a series of oil and gas auctions since the federal government ended a 75-year state monopoly in the energy sector five years ago. One in February this year attracted almost US $100 billion in potential investment.

President-elect Andrés Manuel López Obrador has said that his administration will review all oil contracts that have been awarded but incoming finance secretary Carlos Urzúa said last month that the contracts will be respected if no irregularities are found.

Source: Reuters (en)

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