QP will gain a stake in three Eni-operated fields in Mexico’s shallow-water Area 1.

Qatar Petroleum (QP) and Eni S.p.A. signed a deal Sunday that will enable QP to acquire a stake in three Eni-operated oil fields in Area 1 in Mexico’s Bay of Campeche, the companies reported.

“We are pleased to sign this agreement, with our valued partner, Eni, to participate in the development and production of oil fields in Mexico,” QP President and CEO Saad Sherida Al-Kaabi, said in his company’s announcement. “This agreement marks another milestone for Qatar Petroleum as it strengthens its international footprint and expands its presence in Mexico.”

Under the sale and purchase agreement with Eni, QP will gain a 35-percent interest in the Area 1 production sharing contract that includes the Amoca, Mizton and Tecoalli offshore oil fields. The companies noted that the three fields hold an estimated 2.1 billion barrels of oil equivalent, 90 percent of which is oil.

QP, as part of a separate consortium with Shell and Eni, stated that it already holds exploration rights in five offshore blocks in Mexico’s Perdido and Campeche basins. Eni added that it has drilled five successful Area 1 wells and that Mexico’s National Hydrocarbon Commission has approved the development plan for the shallow-waters of the area.

“I am extremely satisfied to sign this agreement, which falls within the scope of a broader strategic cooperation with our long-term partner Qatar Petroleum in Mexico and elsewhere,” Eni CEO Claudio Descalzi said in a written statement emailed to Rigzone. “I am also proud that Area 1 development is on track to provide the first offshore production by a foreign company after the Energy Reform in Mexico.”

According to QP, the phased Area 1 development plan will allow early production to start next year through a wellhead platform in the Mizton field and a multiphase pipeline for treatment at an existing Pemex facility. Full field production should occur two years later through a floating production, storage and offloading (FPSO) facility capable of treating 90,000 barrels of oil per day, the company added. Also, it stated that two addition platforms will be installed on the Amoca and Tecoalli fields.

“Qatar Petroleum is pleased to enhance its fruitful cooperation and partnerships with a major the energy player like Eni,” said Al-Kaabi. “We are also excited about participating in this development in Mexico’s Campeche Bay, and with first oil production expected by mid-2019, we look forward to collaborating with Eni to ramp up production to around 90,000 barrels of oil per day by 2021.”

QP noted that the latest deal with Eni reflects the company’s efforts to pursue Latin America as “an important core area for its upstream activities.” Elsewhere in the region, it has expanded in Brazil and Argentina.

Eni recently took the Area 1 final investment decision, and the Italy-based company stated that it anticipates a $2 billion capital expenditure for the development. The Area 1 agreement with QP is subject to authorization by Mexican authorities, Eni added.

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