On 30 July 2018, Petrofac Limited announced that it signed an agreement to sell 49% of the company's operations in Mexico to Perenco (Oil & Gas) International Limited, The deal encompasses the Pemex legacy assets Santuario and Magallanes (onshore) and the Arenque offshore contract. The official contract names are:<P />* The 153.193 sq km CNH-M2-Santuario-El Golpe/2017 PSC (A-0396-Santuario Block & A-0121 Campo El Golpe )* The 191.14 sq km AE-0395-Magallanes-Tucan-Pajona Block* The 2,191.4 sq km AE-0390-M-Arenque Block<P />While Santuario is a Production Sharing Contract (PSC), Magallanes and Arenque are production enhancement contract projects signed before energy reform. Under the terms of the agreement, Perenco will pay an initial cash consideration of US$ 200 million (US$ 30 million payable upon signing and US$ 170 million payable upon completion). Petrofac detailed that the total consideration comprises a fixed amount and contingent consideration depending upon a number of future milestones, including future field development and migration terms of Petrofac's Magallanes and Arenque oilfield contracts. This final amount, Petrofac said, is subject to adjustment based on achievement of the milestones above and will be capped at US$ 274 million. Petrofac added that it currently estimates that an impairment charge of approximately US$100 million, will be recorded because of the deal. Petrofac will use proceeds from the sale to reduce gross debt. The transaction is subject to approval by the Federal Competition Commission of Mexico (COFECE). That is expected to take place Q4 2018."We are delighted to welcome an experienced partner in Perenco to our Mexican operations," Petrofac's Group CEO Ayman Asfari said. "They bring strong technical capability that will complement our existing brownfield operations experience to strengthen our offering. We look forward to working with them and the other stakeholders to further develop our mature field interests in Mexico."As for Perenco, the agreement gives it an important foothold in the Latin American economy. "Mexico is a land of opportunities, a new play, a new country and an exciting new challenge for Perenco," Perenco's CEO Benoit de la Fouchardiere. "Partnering with Petrofac in Mexico will give us a fantastic opportunity to reach our goals in a timely manner and, by our results, demonstrate to the state company Pemex that we can also be a partner of choice for the future."Mexico's Comision Nacional de Hidrocarburos (CNH) on 18 December 2017 signed a PSC for CNH-M2-Santuario-El Golpe/2017, encompassing the A-0396-Santuario and A-0121 Campo El Golpe fields with Petrofac and state-run Pemex. Petrofac holds 36% equity interest in the PSC. Pemex retains the balance (64%). The contract is located in Tabasco state. According to the CNH at the time of signing, the PSC will have the capacity to tap 29,000 boe/d. In April 2018, according to data, oil production at Santuario was on the order of 6,021 bo/d. Petrofac originally won the Santuario 25-year oilfield service contract in October 2011. That was before energy reform in which Pemex awarded contracts with performance incentives, known as CIEP in Spanish, and the financed public works contracts, or COPF, to develop production in various parts of the country. The contracts, which were grandfathered into the Round Zero entitlements in August 2014, are being migrated over to a new contract model. Separately, regulators have approved the transitional plan for the field. Magallanes and Arenque oilfield are in the pipeline for migration to a new contract model. Petrofac in 2012 was awarded the integrated production service contract for the offshore Arenque contract. The Magallanes enhancement contract is a tariff-per-barrel-based service contract. In all, 22 integral service contracts have been earmarked to be migrated over to new contracts.<P />
Mexico, CNH-M2-Santuario-El Golpe/2017Perenco is acquiring 49% in Petrofacâs Mexico assets â including Santuario, Magallanes and Arenque fields for US$200 MM. 