Aug. 1 (UPI) -- The outcome from a potential $1.9 billion commitment to offshore Mexico could realize 90,000 barrels of oil per day from 2021, Italian energy company Eni said.
Eni CEO Claudio Descalzi said Wednesday he was "extremely satisfied" that Mexican authorities signed off on the development plan for a string of discoveries in the so-called Area 1 basin, located in the shallow waters of the Campeche Bay.
The company said it was envisioning total development spending of $1.9 billion barrels and a production plateau of 90,000 barrels per day from 2021.
The approval came about three years after the company signed a production sharing contract with Mexican authorities and 17 months after drilling began.
"Area 1 development will be a fast-track project in line with Eni's strategy aimed at maximizing the long term value for all stakeholders and shareholders," Descalzi said in a statement.
Initial production slated for the first half of 2019 would realize only 8,000 barrels per day. Full production begins in 2020 using a floating production, storage and offloading facility.
The company in December finished drilling a well in the shallow waters in the Campeche Bay off the coast of Mexico. After completion, Eni revised its estimate for Area 1, from 1.4 billion to 2 billion barrels of oil equivalent.
About 90 percent of that estimate is expected to exist as oil.
The Italian company confirmed the potential for oil offshore Mexico in March 2017. Descalzi said the discovery was the first for his company in Mexico and the first by a foreign company since national energy reforms were enacted in 2013.
Assuming a price for Brent crude oil at $60 per barrel, Eni said it expects to produce on average 1.9 million barrels of oil equivalent per day this year, a 4 percent increase from last year.