Italy’s Eni SpA has announced another deepwater find in the Sureste Basin in southeastern Mexico’s Gulf of Mexico (GOM), with preliminary estimates indicating 150-200 million boe in place.

Mexico production

The estimated resources “reflect that there’s still untapped potential to be brought to market,” Amexhi head Merlin Cochran told NGI’s Mexico GPI. Amexhi is a Mexico private sector hydrocarbons organization. 

“More importantly, they reflect that both companies and regulators are doing their share of the contract during the pandemic. This is easier said than done with new Covid variants appearing.”

According to Amexhi data, 2020 was the most fruitful year for members in terms of oil and gas finds. Six contracts yielded discoveries worth 505 million boe. 

Mexico had a total of 21 offshore exploration projects active in June.

Discoveries on the U.S. side in the GOM also abound, with several advancing. The U.S. Energy Information Administration (EIA) in April predicted U.S. production from the GOM will increase in the next two years. By the end of 2022, EIA said 13 new projects could account for about 12% of total GOM oil production, or about 200,000 b/d.

Sayulita-1 EXP, 43 miles offshore, is the seventh successful well drilled by Eni in Mexico’s Cuenca Salina/Sureste Basin. Eni said the find “confirms the value of the asset” and opens “the potential commercial outcome of Block 10 since several other prospects located nearby may be clustered in a synergic development.”

The Block 10 joint venture consists of Eni, which is operator with a 65% stake, along with  Russia’s Lukoil (20%) and Capricorn Energy Mexico, a subsidiary of Cairn Energy plc (15%). 

Eni said Mexico is a “core country in the strategy of future organic growth.” Its Mexico production currently stands at 20,000 boe/d. Eni expects output to ramp up to 65,000 boe/d in 2022 and reach a plateau of 90,000 boe/d in 2025. 

Currently, Eni holds rights in eight exploration and production (E&P) blocks, including six as operator, all in the GOM’s Sureste Basin.

As of April, E&P contracts awarded under the reform between 2015 and 2018 had resulted in $7.38 billion of total direct investment, according to upstream regulator Comisión Nacional de Hidrocarburos (CNH).

Among private sector companies, Eni had invested the most at $1.78 billion as of April. In mid-2019, Eni became the first private sector operator to record offshore oil production in Mexico at its Area 1 project.

Despite the cancellation of new oil and gas rounds and general hostility to nonstate actors from the government of Andrés Manuel López Obrador, private sector E&P activity continues to tick up in Mexico.

Last week, Mexico E&P player Hokchi Energy SA de CV announced it had put online a third well offshore the state of Tabasco. The well increased total Hokchi output to more than 14,000 b/d.

Meanwhile, later this month the Ichalkil and Pokoch fields operated by Fieldwood Energy E&P México are also set to begin operation, with production set to hit 40,000 b/d. In July, Lukoil said it was buying Fieldwood’s operator stake in the project.

Private sector oil production hit 146,000 b/d in June compared with 128,000 b/d in the year-ago month.