Lukoil Acquires Fieldwood Energy's 50% Interest in Mexico's Area 4 Project
Moscow-based PJSC Lukoil has entered into an agreement with privately-held E&P company Fieldwood Energy LLC to acquire its 50% operated interest in the Area 4 project (containing the Ichalkil and Pokoch fields), located offshore Mexico, for a total consideration of US$435 million, plus certain additional expenditures. PetroBal SAPI de CV, a subsidiary of Grupo Bal Sa de CV, holds the remaining 50%.
Under the terms of the deal, Lukoil will acquire the 50% interest in the Area 4 project through the acquisition of Fieldwood Energy’s holding company, in exchange for a total consideration of US$435 million, plus reimbursement of expenditures incurred in 2021 (as of the transaction completion date).
The Area 4 project comprises two blocks covering a combined area of approximately 58 sq. km, located about 43 km offshore Mexico. Situated in water depths of 35-45 m, the project contains the Ichalkil and Pokoch fields in the shallow water Bay of Campeche. The development of the project is planned under three phases, with peak production rates estimated to be more than 115 thousand barrels of oil equivalent per day (Mboe/d). The estimated gross recoverable reserves from the project are approximately 564 million barrels of oil equivalent (MMboe), of which around 80% is oil, while the average daily production from the project during H2-2021 is estimated to be approximately 40,000 barrels per day (bbls/d).
“Lukoil considers Mexico a strategic region for the development of our international upstream operations. The new project, where we will be the operator, is notable due to its considerable explored reserves and significant production potential. It naturally complements our existing portfolio of projects in the Gulf of Mexico,” commented Vagit Alekperov, President of Lukoil.
Listed on the Moscow Stock Exchange (MCX), the London Stock Exchange (LSE), and the Frankfurt Stock Exchange (FWB), Lukoil is engaged in the extraction, production, transportation, and sale of petroleum, natural gas, and petroleum products across Asia, Europe, Africa and the Americas. In addition, Lukoil also operates in the refining, marketing of crude oil and refined products, and power generation segments internationally.
Houston-based Fieldwood Energy is focused on the exploration and development of offshore oil and natural gas assets in the United States and Mexico.
The transaction is subject to customary closing conditions, including approval by the Mexican authorities.