Oilfield services provider Petrofac has completed the sale of 49% of its operations in Mexico to Perenco, following approval from the Federal Competition Commission of Mexico (COFECE).
Under the terms of the sale, announced on July 30, 2018, Petrofac has been paid an initial cash consideration of $200 million, comprising $30 million paid upon signing and $170 million on completion, for its business including Santuario, Magallanes and Arenque.
Petrofac said in July that the proceeds from the sale will be used to reduce gross debt.
The total consideration is capped at $274 million and comprises both fixed and contingent consideration dependent upon the achievement of future milestones, including the future field development and migration terms of Petrofac’s Magallanes and Arenque Production Enhancement Contracts.
Petrofac’s Magallanes contract with Pemex has an end date set for 2036. The project is located in Tabasco State, south-central Mexico and the main scope of the contract is to increase production and manage ongoing operations and maintenance.
Petrofac’s Arenque contract is also with Pemex and it has an end date set for 2042. The project is located in the Gulf of Mexico, 30 km offshore from Tampico.
The Arenque offshore field was discovered by Pemex in 1967 and was the first exploration well in the area to be successfully tested in the San Andres formation.
Petrofac was awarded a Production Enhancement Contract (PEC) in 2012 for the Arenque field – becoming the first foreign company to operate a shallow water field in Mexico for more than 70 years. Asset operations were successfully transitioned to Petrofac in 2013.
The scope of work includes field development and operations, including subsurface and facilities engineering, drilling, project execution and operations management.