Lukoil says acquires 50% in Mexico’s Area 4 project for $435 mln

MOSCOW, Jul 5 (PRIME) -- Russian oil major Lukoil has signed an agreement to acquire a 50% operator stake in Mexico’s Area 4 shallow water project for U.S. $435 million plus expenditures incurred in 2021 as of the deal’s closure date, the company said in a statement on Monday.

“Lukoil announces the entry into an agreement to acquire the 50% operator interest in Area 4 project in Mexico through acquisition of the operator's holding company. The transaction value is $435 million plus expenditures incurred in 2021 as of the transaction completion date. Completion of the transaction is subject to certain conditions, including approval by the Mexican authorities,” the statement read.

The project comprises two sites with a combined area of 58 square kilometers located in 42 kilometers from the shore in the Gulf of Mexico. The depth of the sea in the location ranges from 30 meters to 45 meters, and the sites include two oilfields – Ichalkil and Pokoch – with recoverable hydrocarbon reserves of 564 million barrels of oil equivalent, of which oil accounts for more than 80%.

Lukoil plans to start production at the fields in July–September. The project will be implemented in three phases with the expected maximum daily production of more than 115,000 barrels of oil equivalent.

The project is implemented under a production sharing agreement signed in 2016 for 25 years with an option of prolongation of up to 10 years. Mexican oil and gas company PetroBAL, part of GrupoBAL, is Lukoil’s partner with the remaining 50% in the project.

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