Qatar buys Mexican oil takes from Eni

[DUBAI] Qatar Petroleum is buying stakes in three offshore oil blocks in Mexico from Eni, as the Arab country signs another global expansion deal after leaving the Organization of Petroleum Exporting Countries (Opec).

Eni and the government-owned energy company in Qatar, the world's biggest exporter of liquefied natural gas, will produce about 90,000 barrels of oil a day from the Amoca, Mizton and Tecoalli fields in the Gulf of Mexico by the end of 2021, Saad Sherida Al Kaabi, Qatar's energy minister, said in Doha. The fields hold 2 billion barrels of oil equivalent, he said at a press conference with Eni chief executive officer Claudio Descalzi.

The companies are already working together on a separate offshore block in Mexico, according to press releases from both companies. Eni gained approval for the developments earlier this year and needs the Mexican authorities to sign off on Sunday's deal.

Global oil majors that have for years produced in US waters are being attracted to the Mexican side of the Gulf as the government opens new blocks for development. Middle Eastern producers are exploring opportunities for offshore developments in the Americas and Africa as well as looking at prospects for shale oil developments in the US. Growing production from outside Opec is challenging the producers' group.

Qatar Petroleum is now operating in Mexico, Brazil, Argentina, Oman, Congo, South Africa, Cyprus and Mozambique. The Middle Eastern country, which has been facing a blockade led by Opec members Saudi Arabia and the United Arab Emirates, said this month it was leaving Opec to focus on its gas business.

Last week, Qatar Petroleum agreed to acquire a stake in a Mozambique energy project. The company is exploring for oil and gas in Cyprus, Argentina, Morocco and other countries. It plans to pump US$20 billion in US fields and will expand its local LNG output by 43 per cent to 110 million tons per year in 2025.

Eni has made offshore discoveries from the Americas to Africa and the Mediterranean. The Rome-based company has ceded stakes in natural gas fields in Egypt to BP and Mubadala Investment and is working with Russia's Lukoil PJSC in Mexico.

Eni, which this year won rights to develop crude and gas deposits in Abu Dhabi, also wants to partner in LNG expansion projects in Qatar, Mr Descalzi said. Qatar isn't worried that Australia became the world's top LNG producer as the Arab country will regain the No 1 position after completing expansion projects, Mr Al Kaabi said.

BLOOMBERG