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ENI to start crude output in Mexico's Amoca-Mizton-Tecoalli next week: CNH

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ENI to start crude output in Mexico's Amoca-Mizton-Tecoalli next week: CNH

Highlights

Output limited to 8,000 b/d by onshore constraints

AMT output to hit 90,000 b/d of crude and 75 MMcf/d of gas by 2022

Next offshore private fields to follow are Hokchi and Ichalkil-Pokoch

Mexico City — ENI will start producing crude in Mexico's Amoca-Mizton-Tecoalli (AMT) shallow water complex next week, although output will initially be limited to 8,000 b/d because of constraints at Pemex's onshore facilities, Mexico's National Hydrocarbon Commission said on Friday.

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ENI would be able to produce 15,000 b/d were it not for capacity limitations at Pemex's San Ramon hydrocarbons separation facility and La Venta crude dehydration plant, CNH said in a webcast session.

If Pemex were to make adjustments, ENI could increase output, CNH said. Pemex and ENI could not be reached for comment.

The start-up of AMT, located in the Cuencas del Sureste Basin in offshore Tabasco state, has been delayed since March as a result of regulatory approval delays by Mexico's Communication and Transportation Secretariat.

ENI is going to be the first private operator to begin crude oil production offshore Mexico. The Italian company won the rights over the AMT discoveries during Mexico's hydrocarbon auction Round 1.2 in October 2015.

The 28 API crude from AMT will be mixed in transportation pipelines with Pemex's 33 API crude produced locally before arriving at La Venta, CNH said. Trafigura will market the crude.

Also, 5.7 MMcf/d of wet gas produced from AMT will be processed at La Venta. The natural gas will then be marketed by CFEnergia, a subsidiary of Mexico's state power utility CFE.

ENI is expected to install a floating, production, storage, and offloading unit (FPSO) at AMT by early 2021, after which the wet gas will be processed at the FPSO.

Once ENI installs the FPSO, AMT crude production is expected to ramp up to 47,000 b/d. Crude output is then expected to peak of 90,000 b/d from 2022 to 2025, while natural gas output is expected to peak at 75 MMcf/d, CNH said.

CNH said that the start-up of the FPSO hinges on regulatory approval from other federal entities.

MORE PRIVATE OUTPUT

The next offshore private fields expected to come on stream are Pan American Energy's Hokchi and Fieldwood's Ichalkil-Pokoch, both of which were awarded during Round 1.2. Those fields are expected to eventually produce 28,000 b/d and 108,000 b/d, respectively.

CNH expects upstream contracts signed after Mexico's Energy Reform was implemented will reach a combined production peak of 341,000 b/d of crude oil by 2025 and 371 MMcf/d of gas by 2022. This forecast is based only on projects with development plans approved. Also, this CNH projection includes Pemex's Ek-Balam shallow water field and farmouts.

The forecast does not include projects under appraisals, such as Pemex and BHP's Trion deepwater project and Talos Energy's prolific Zama shallow water discovery. Pemex has said that Trion could produce 100,000-120,000 b/d. Talos estimates Zama could produce 150,000-170,000 b/d.

-- Daniel Rodriguez, daniel.rodriguez@spglobal.com

-- Edited by Jeff Mower, newsdesk@spglobal.com