Mexico is Slowly but Surely Regaining Global Prominence in the Energy Sector
It is official: after having been awarded the shallow waters field containing the Amoca, Tecoalli, and Miztón fields on 30 September in the second bidding phase of Round One, ENI has just signed its first production-sharing contract, officiating its entrance into Mexico’s national oil industry.
Originally Italian, Ente Nazionale Idrocarburi (ENI) is one of the industry’s ‘majors’, with operations in 83 countries and vast experience in exploration and production. The company’s daily production reaches levels of 1.6 million barrels. The contract entered into effect on 30 November, and will be valid for the ensuing 25 years, with the option of extending it for two more periods of five years, allowing a total duration of 35 years if desired. The offer by the Italian company included 83.75% State participation and the certified bid-winner, ENI México, will have its activities in the country financially supported by ENI International. The company is expected to invest US$1.1 billion to develop the fields it was awarded.
The Italian firm said the combined reserves for the three fields approximated 800 million barrels of oil and 480 bcf of associated gas. In line with the changes in regulations that allow operators to also carry out exploratory activities, Federizo Arisi Rota, the firm’s Vice President for the Americas, specified that the company would first be performing a seismic analysis of the field, which Juan Carlos Zepeda Molina, President Commissioner of CNH, expects to last two years and require US$221 million. The next step will be to drill four wells for evaluation purposes. The VP also mentioned that ENI hoped to replicate the success it had experienced in Venezuela, Angola, and Egypt, where it discovered major reservoirs.
Pedro Joaquín Coldwell, Mexico’s Minister of Energy, acknowledged that this is the first major international oil firm to enter Mexico’s market as an operator under the new regulatory framework. Among various Twitter posts referring to the signing of the contract, Coldwell praised the Energy Reform for facilitating inflows of investment. The five contracts awarded during phase one and two of Round One have already opened Mexico’s doors to eight private firms, with investments that amount to US$5.8 million. This encouraging figure brings hope that the Energy Reform has the potential to position Mexico at the forefront of the international energy market, as expressed by Coldwell.