Japan's Mitsui and Hungarian firm MOL have agreed to invest in a long-term charter business operated by Japan-based Modec for the purpose of providing a floating production, storage, and offloading system (FPSO) for use in the $2bn Area 1 block development project offshore Mexico.


Image: Mitsui, MOL to invest in Modec's FPSO charter project. Photo: Image by C Morrison from Pixabay.

Modec currently operates Area1 Mexico MV34, a Dutch company engaged in FPSO leasing, operations and maintenance services.

Last year, MV34 signed the 15-year charter agreement with Eni Mexico, the operator of Area 1 block and a subsidiary of Eni. The charter contract has options for extension every year for up to five additional years.

The Area 1 block is owned by a consortium of Eni Mexico as operator with 65% stake and Qatar Petroleum holding the remaining 35% interest.

Construction of the FPSO, which is planned to be deployed for the development of the Area 1 block at water depths of about 32m, is scheduled to be completed in 2021.

In 2018, the Italian oil and gas major Eni has secured approval from Mexico’s National Hydrocarbon Commission for the $2bn phased development plan of the Area 1 discoveries Amoca, Miztón and Tecoalli.

As per the plan, Eni aims to achieve early production from Area 1 by mid-2019 via a well head platform installed in the Miztón field and a multiphase pipeline for treatment at an existing facility owned by Pemex.

Full field production from the offshore block is anticipated to be achieved in 2021 via the FPSO, which will have a treatment capacity of 90,000 barrels of oil per day.

From 2021, oil production plateau at the Area 1 project will reach be 90,000 bopd and 65 million standard cubic feet per day (Mscfd) for a total of 102,000 barrels of oil equivalent.

The Area 1 concession is estimated to contain 2.1 billion barrels of oil equivalent, out of which 90% is oil. Two more platforms are planned to be installed on the Amoca and Tecoalli oil fields.

Last year, Qatar Petroleum has signed a deal to acquire 35% stake in three offshore oil fields in the Area 1 project in Mexico from Eni, for undisclosed amount.