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Agip Extends Gulf Interests

Agip Extends Gulf Interests

The Italians seem to be rediscovering the New World --- and it's in the Gulf of Mexico this time. In the largest venture of its kind in the Gulf of Mexico's deep offshore, Exxon Mobil Corp. has given Agip Petroleum Exploration Co. the opportunity to earn 25% of the U.S. company's interest in up to 259 deepwater blocks. To earn the interest, Agip, a subsidiary of Eni, the Italian oil and natural gas company, has to participate in the drilling of at least 12 exploration wells over the next five years.

The agreement covers approximately 1.3 million net acres, or 5,200 square kilometers, and is the largest of its kind to date to be announced in the Gulf of Mexico's deep offshore, according to Luciano Sgubini, chief operating officer of Agip.

"The deepwater operating environment is challenging, but has the potential to contain large undiscovered accumulations of oil and gas," said John Cousins, executive vice president of ExxonMobil Exploration Co. "The combined capabilities of ExxonMobil and Agip will result in a very strong partnership to explore this significant potential."

The leases are located on the Outer Continental Shelf offshore Texas, Louisiana and Mississippi. They extend from Alaminos Canyon to Atwater Valley in water depths ranging from 3,000 to 8,000 feet. ExxonMobil owns 100% interest ;in about two-thirds of the blocks, and 50% interest in the remainder. Drilling is expected to begin later this year with ExxonMobil as operator.

While the Italian oil and gas giant holds interests around the world, the newest venture by Agip is not its first in the Gulf of Mexico.

Partnered with Shell, BP Amoco and Conoco, Agip is participating on production from Shell's Europa field in the Gulf. Production is flowing from three wells on Mississippi Canyon Block 934 at approximately 40,000 bbl/d, and 30 MMcf/d. Production from the first well there began January 31, and the third and final well of the initial phase was completed March 11. The Europa subsea production system is about 140 miles southeast of New Orleans in 3,900 feet of water, and ties back 18 miles to Shell's Mars tension leg platform on Mississippi Canyon Block 807.

The Mississippi Canyon Block also includes the Macaroni project, which began in August 1999, and Angus, which began in September 1999. Shell is operator of 13 of the projects, and Agip is a participating partner in them. Shell holds a 34% interest in the project, BP Amoco holds 33% interest, and Agip has a 32% interest. Conoco holds 1% interest.

Agip also partnered with Chevron and Shell to begin drilling in July on the initial well on Chevron's "Hurricane" prospect in 2,000 feet of water at Ewing Bank Block 1010 in the Gulf.

And earlier, in January 1999, Agip grabbed a 30% interest, and agreed to participate in EEX Corp.'s George prospect on Blocks 441, 442 and 485 in the Mississippi Canyon area of the Gulf of Mexico. EEX is the operator, and retained a 70% interest.

Carolyn Davis, Houston

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