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Lukoil closes US$435mn Mexican Area 4 purchase

Bnamericas Published: Friday, February 25, 2022

Russia’s Lukoil has purchased the remaining 50% of the highly prolific Area 4 shallow water project off Mexico’s Tabasco and Campeche states from Fieldwood Energy.

While the deal was approved by regulator CNH earlier this month, its terms had not been disclosed. Lukoil said it will pay US$435mn and commit to spending US$250mn on the project to buy Fieldwood Mexico, which owns the project’s operator, Fieldwood Energy Mexico.

Fieldwood Energy Mexico will remain as operator.

Changes to the corporate structure with the deal approved by CNH. (Source: CNH)

Lukoil already had a 50% share in the field after it bought Fieldwood partner Petrobal’s subsidiary last July for US$435mn plus expenditures.

Area 4 contains discoveries Ichalkil and Pokoch, where Fieldwood México is rapidly ramping up production.

The firm seeks to close the first quarter with production of 30,000b/d and end 2022 at 37,000b/d. At its peak in the middle of the decade, the project is expected to produce 100,000b/d, or double the 2021 production of all contracts awarded in Mexico's latest oil bidding rounds, which in December involved 51,000b/d, according to the hydrocarbons commission.

The project’s 2022 budget involves US$477mn to spud and complete three new wells and retrofit three production platforms, including state-owned Pemex’s Tumut.

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