Eni CEO says Mexico oil find likely bigger than estimates


UPDATE 1-Eni CEO says Mexico oil find likely bigger than estimates

(Recasts lead, adds CEO comments, background)
    By Stephen JewkesRAVENNA, Italy, March 29 (Reuters) - Italy's Eni <ENI.MI>
said on Wednesday it expected that its recent discovery off the
coast of Mexico would hold more than the 800 million barrels of
oil it originally estimated.
    "This is an important find and we've found new layers of
good light oil that make us think there's more," Chief Executive
Claudio Descalzi said at an oil and gas conference.
    Eni said earlier this month it had found "meaningful"
reserves of oil off the coast of Mexico after becoming the first
 international oil company to drill a well in the country after
a 2013 reform opening up the sector to investors.
    State-controlled Eni, which in recent years has made major
gas finds in Mozambique and Egypt, holds one of the best
discovery track records in the industry.
    Its organic reserve replacement ratio -- a measure of its
ability to find hydrocarbons -- stood at 193 percent in 2016
compared to a 35 percent peer average.
    "Eni's Zohr discovery is a game changer," Egypt's oil
minister Tarek El Molla said on Wednesday, referring to Eni's
discovery in Egyptian waters of the biggest gas field ever found
in the Mediterranean.
    Descalzi said Eni would follow the same strategy in Mexico
as it had adopted in Egypt, using infrastructure already in
place to help speed up time to market.
    He said the discovery, some 6-7 km from the coast, was close
to installations owned by Mexico's state-owned oil company
Pemex. He added he would speak to Pemex in coming months to
discuss using some of their infrastructure in the area.
    Royal Dutch Shell <RDSa.L>, Chevron <CVX.N> and Exxon Mobil
<XOM.N> have recently signaled the oil industry's return to
Mexico's deep waters with high bids in a government auction.
    Since taking over as Eni CEO in 2014, oil veteran Descalzi
has streamlined the company, focusing attention on the upstream
job of finding oil and gas.
    Asked about the group's retail gas and power business which
serves 11 million clients, he said a decision would be taken
this year on whether or not to sell all or part of it. "There is
a lot of interest from industrial players and funds," he said.
    Descalzi, former head of Eni's upstream activity, is set to
be re-appointed CEO of Eni in April for a second three-year

 (Editing by Edmund Blair)
 ((stephen.jewkes@thomsonreuters.com; +39.0266129695; Reuters
Messaging: stephen.jewkes.thomsonreuters.com@reuters.net))

Keywords: ENI MEXICO/ (UPDATE 1)

This article appears in: World Markets , Stocks , Economy , Oil
Referenced Symbols: CVX , ENI , RDSA , XOM

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