Qatar Petroleum to join Eni as partner in $2bn Area 1 project offshore Mexico
Oil and gas industry news : Qatar Petroleum is all set to join Eni as a partner in the offshore Area 1 project, which is being developed in Mexico with an investment of $2.0 billion.
The Qatar state-owned petroleum company has agreed to acquire a 35% stake from the Italian oil and gas giant for an undisclosed price in the offshore oil project to be developed in the shallow waters of the Campeche Bay.
As a result, Qatar Petroleum will get participating interests across the Amoca, Mizton, and Tecoalli offshore oil fields that constitute the Area 1 project, which is targeted to enter into production by mid-2019.
Eni will continue to be the operator with a stake of 65% in the Mexican offshore block which is estimated to hold 2.1 billion barrels of oil equivalent, with 90% of it being oil.
The transaction will be subject to approval from the Mexican government.
Qatar Petroleum to partner Eni in Area 1 project. Photo courtesy of Qatar Petroleum.
Claudio Descalzi – CEO of Eni, commenting on the deal with Qatar Petroleum over the Area 1 project, said: “I am extremely satisfied to sign this agreement, which falls within the scope of a broader strategic cooperation with our long-term partner Qatar Petroleum in Mexico and elsewhere. I am also proud that Area 1 development is on track to provide the first offshore production by a foreign company after the Energy Reform in Mexico.”
Recently, Mexico’s National Hydrocarbon Commission approved Eni’s phased development plan of the Amoca, Mizton and Tecoalli discoveries.
The Italian oil and gas giant is looking for an initial production phase from the Area 1 project by installing a well head platform in the Mizton field in addition to a multiphase pipeline to transport the produced oil for treatment at an existing Pemex facility.
Through a floating production, storage, and offloading facility (FPSO), the Area 1 project is expected to see full production in 2021. The FPSO, which is likely to be delivered by MODEC, will have a processing capacity of 90,000 barrels of oil per day and 75 million cubic feet of gas per day.
Eni is also planning to install a couple of more platforms, which will come up at the Amoca and Tecoalli fields.
Two more platforms are planned to be installed on the Amoca and Tecoalli oil fields.
For Qatar Petroleum, the entry into the Area 1 project consolidates its presence in offshore Mexico, where it had won exploration rights for five concessions in the Perdido and Campeche basins earlier this year as part of a consortium made up of Shell and Eni, respectively.
Saad Sherida Al-Kaabi, Minister of State for Energy Affairs, President & CEO of Qatar Petroleum, commenting on the Area 1 project deal, said: “We are pleased to sign this agreement, with our valued partner, Eni, to participate in the development and production of oil fields in Mexico. This agreement marks another milestone for Qatar Petroleum as it strengthens its international footprint and expands its presence in Mexico.
“Qatar Petroleum is pleased to enhance its fruitful cooperation and partnerships with a major energy player like Eni. We are also excited about participating in this development in Mexico’s Campeche Bay, and with first oil production expected by mid-2019, we look forward to collaborating with Eni to ramp up production to around 90,000 barrels of oil per day by 2021.”