Repsol CEO upbeat on Mexico upstream following block 9 discovery

Spanish oil major Repsol has a clear opportunity to increase production from Mexican offshore operations following a discovery in block 9 in July, chief executive officer Josu Jon Imaz said on Wednesday.

Repsol's Italian partner Eni made the discovery at the Yopaat-1 well in block 9. Preliminary estimates indicate a potential of around 300–400Mboe (million barrels of oil equivalent). Repsol holds a 50% stake in block 9, with Eni holding the other 50%. 

The block is located in deep waters in the Salina basin, adjacent to the Repsol-operated block 29 where Repsol has also made major discoveries. Because of the location of the well close to other discoveries and prospects, there is high potential to develop a production hub in the area.

"We see opportunities to optimize the whole area," Imaz said during a conference call on Repsol's second-quarter results. "We have a clear case for a new FID [final investment decision] that is going to support sustained improvement in production."

Of Repsol's spending on exploration in the first half of the year, 33% was allocated to Mexico, more than any other country and ahead of 21% for the US.

When asked about the election of Claudia Sheinbaum as Mexican president, Imaz said he expected continuity with the energy policies of incumbent Andrés Manuel López Obrador.

"Our perception is that Mexican authorities, then and now, are fully focused on promoting local resources and increasing the power of Mexico as a relevant country in terms of producing hydrocarbons."

"We want to be part of this history and this narrative of Mexico."