Eni Stops Production in Mexico Due to Regulatory Stoppage

Italian oil giant Eni stopped production at three of Mexico’s most promising fields under private development this March 31, as the IOC works to clear a regulatory hurdle required for the export and sale of its crude.

Due to a missing permit, Eni has not been able to export its first crude oil shipment, which forced the company to temporarily halt production at the Amoca-Miztón-Tecoalli shallow water fields as of March 31. The trio of fields represents one of the country’s most promising privately developed oil prospects and is located near the coast of Tabasco in the Gulf of Mexico.

Eni, together with Hokchi, is one of the private oil companies with highest production in the country, because of the contracts the companies won in bidding rounds during the previous administration. The Italian enterprise started producing crude in July 2019 and the latest data of CNH indicated that the company produced 9,336 b/d of crude during Feb. 2022.

Eni signed a joint production contract with the Mexican state, which gives it the faculty to export crude without state intervention. The first shipment was planned for March 25, but until now it has not been possible to start the sales process. Although Eni has an active crude export permit issued by the Ministry of Energy, it is still waiting for the authorization of entry and exit of goods granted by the National Customs Agency. A temporary authorization was denied.

Information suggests that the oil company started the authorization process in Nov. 2021, but the process was delayed by various changes to trade regulation promoted by the federal government.

At the beginning of 2022, the Italian oil giant reported that its Area 1 development received a floating production, storage and offloading (FPSO) vessel, which can greatly increase the oil produced at the company’s frontrunning project off the shore of Tabasco.

The Area 1 project consists of the Miztón, Amoca and Tecoalli fields, which contain around 2.1 MMBOE, most of which is oil. Eni became Mexico’s first private operator to produce oil offshore in 2019. With the 90Mb/d FPSO, called MIAMTE, the Italian operator hoped to boost its production figures in 1Q22. “Its construction involved five construction yards in three different countries including Mexico, where five modules were built. The final integration was done in Singapore and the jacket of the mooring system was fabricated there as well. Overall, works required more than 17 million man-hours, executed at the highest HSE standards. Finally, on Oct. 27, 2021 the MIAMTE FPSO sailed away from Singapore, reaching Mexico after 67 days,” reported Eni.

Nevertheless, due to the missing permits, the crude has not been commercialized so far, which resulted in the maximum capacity storage of the FPSO. Lacking the insufficient infrastructure to store the crude, the company was forced to stop its production, at least for the time being. Eni said that it will not be able to retake its usual production rhythm until the first shipment can be delivered to a buyer.