De Jong Capital Acquires Peru-focused OIG from Ecopetrol and KNOC
Texas-based family investment company De Jong Capital LLC has entered into an agreement with Colombian national oil company Ecopetrol SA and South Korean state-owned Korea National Oil Corp. (KNOC) to acquire their equally-owned subsidiary, Offshore International Group Inc. (OIG). The financial terms of the transaction have not been disclosed.
Ecopetrol and KNOC had acquired OIG in 2009 for a total consideration of US$900 million. The current transaction is the result of a successfully-completed process between a number of bidders jointly carried out by Ecopetrol and KNOC.
OIG currently holds a 100% stake in offshore blocks Z-2B and Z-6, located adjacent to each other in the Talara basin off the coast of northern Peru. The blocks produced a gross average of around 11,300 barrels of oil equivalent per day (boe/d) in 2019, and are operated by Savia Peru SA, a wholly-owned subsidiary of OIG.
Block Z-2B covers an area of 130,315 hectares, with an average water depth of 120 meters. The block has been in production since the 1950s, and includes around 1500 drilled wells with 87 platforms. All of the produced oil & gas is piped to shore via a network of pipelines, and the oil is sold to Petroperu’s Talara refinery and gas to Empresa Electrica de Piura.
Block Z-6 covers an area of 528,116 hectares and is situated immediately south of Z-2B. The block includes two discovered unassociated gas fields, two prospects, and six leads. The implementation of the initial development plan on the block has been in a situation of force majeure since 2012.
“This transaction is part of Ecopetrol’s non-strategic assets divestment plan and is aligned with Ecopetrol’s priorities of cash protection, capital discipline and profitable and sustainable growth,” Ecopetrol said in a statement.