ENI Strikes Oil AgainBy Pedro Alcalá | Tue, 08/03/2021 - 13:59
Italian NOC ENI, renowned in Mexico as the first private operator to produce oil offshore, has announced a new oil discovery with major potential.
The discovery took place in Block 10, in which ENI is an operating partner and majority stakeholder, with 65 percent ownership of the joint venture together with 20 percent owned by Lukoil and 15 percent owned by Cairn Energy through its subsidiary Capricorn. The block is located in the Cuenca Salina Sureste Basin offshore region, approximately 76km off the Dos Bocas port in Tabasco. It is also located a mere 15km away from ENI’s previous oil discovery in Saasken, which was announced at the end of 2020 and which will be appraised at the end of this year.
The discovery happened in the Sayulita-1EXP well, which is part of ENI’s Sayulita Exploration Prospect within Block 10. This well was approved by CNH on June 3rd, at which time it was expected to reach a maximum depth of 1905m at water depths of 325m, which makes this a mid-deepwater well (as it is also classified in ENI’s press release). The discovery was made in the Upper Miocene segment, reaching a total depth of 1758m.
The well was drilled with an ENSCO 8505 semisub rig operated by offshore driller Valaris. While ENI’s press release makes mention of “good quality oil” and reservoirs that “show excellent petrophysical properties,” no mention is made of the oil’s characteristics, which in the original CNH approval were expected to be 22 to 24 degrees API, making it a heavy to medium crude. Preliminary estimates on the discovery place the prospective resources found at between 150MMboe and 200MMboe. This well alone could produce up to 3,000b/d, according to what ENI refers to as its “intensive data collection” on the well.
Like many European NOCs, ENI is beginning to divest its resources from fossil fuels into renewable energy development. However, Mexico still represents one of its most important markets in terms of oil and gas development. This was highlighted in its latest 2Q21 results, which included capital expenditure which amounted to US$2.857 billion for the first half of 2021, US$1.836 billion of which was allocated to “oil and gas development activities, mainly in Indonesia, Egypt, the US, Mexico, the United Arab Emirates and Angola.” This was further underlined in the discovery’s announcement, concluding that “Mexico is a core country in the strategy of future organic growth of Eni, which is currently producing more than 20,000boe/d from Area 1 on an early production configuration, and expects to ramp-up to 65,000boe/d in 2022 and reach a plateau of 90,000 boe/d in 2025. Eni has been in Mexico since 2006 and established its wholly owned subsidiary Eni Mexico S. de R. L. de C. V. in 2015. Currently Eni holds rights in eight exploration and production blocks (six as Operator), all located in the Sureste Basin in the Gulf of Mexico, where it is carrying out an important exploration/appraisal campaign.”