March 29, 2017 / 2:04 PM / 6 months ago

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

(Recasts lead, adds CEO comments, background)

By Stephen Jewkes

RAVENNA, Italy, March 29 (Reuters) - Italy’s Eni 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, Chevron and Exxon Mobil 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 mandate.

Editing by Edmund Blair

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