Mexico's Oil Regulator Approves Eni's $177M Work Program

Reuters

MEXICO CITY, Nov 17 (Reuters) - Mexico's oil regulator on Thursday approved a scaled-down $177 million work program for the three offshore blocks won last year by Italian energy group Eni, which includes drilling four wells.

The work program covers activities through 2017, and was trimmed from an original $245 million, since it was determined that one of the wells would take less time to drill than previously thought. Also, production tests cost less than expected.

Eni will, however, invest 14 percent more than the contract required, members of the regulator's governing body said during a session.

On Sept. 30, 2015, Eni won the production-sharing contract for the offshore Amoca, Mizton and Tecoalli fields, located in shallow waters of the southern Gulf of Mexico and believed to contain 196 million barrels in remaining oil resources.

The auction marked the second phase of Mexico's so-called Round One tender, and followed a historic energy industry overhaul finalized in 2014 that opened the sector for the first time in decades to private producers.

Separately, the commission voted to modify the bidding terms and contract for two oil auctions next year, the first couple installments of Mexico's so-called Round Two tender.

Both auctions cover onshore blocks, and the modifications were primarily aimed at giving interested companies more time to study the blocks and complete the pre-qualification process.

The CNH will publish final bid terms and contract language for blocks included in Round Two's first oil auction on Feb. 22, more than a week earlier than previously planned, while companies will have an additional month to turn in pre-qualification documents, now due on January 27.

The commission did not change the March 22 date when the auction's winners are set to be announced.

Contract terms were also modified to define a serious accident as one that impedes contracted activities during a period of more than 90 days.

The regulator also decided to give companies seeking to participate in the second Round Two auction three additional months to turn in pre-qualification documents, now due on March 31.

The revision of those documents will continue through June 9, and winning companies will be announced on July 12, also about three months later than originally scheduled.

(Reporting by David Alire Garcia; Editing by David Gregorio)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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