Petrofac sells remaining 51% stake in Mexican biz Perenco

Petrofac sells remaining 51% stake in Mexican biz to Perenco

7:35 AM, 20th September 2019
Petrofac logo

SAINT HELIER, UK: Petrofac Limited (Petrofac) has signed an agreement to sell its remaining 51% interest in its operations in Mexico, including Santuario, Magallanes and Arenque, to Perenco (Oil & Gas) International Limited (Perenco).

This transaction will be effected by the sale of Petrofac’s remaining 51% interest in Petrofac Netherlands Holding BV, which indirectly holds the Santuario Production Sharing Contract, the Magallanes Production Enhancement Contract (a tariff-per-barrel-based service contract) and the Arenque Production Enhancement Contract.

The terms of the transaction are substantially the same as the sale of a 49% non-controlling interest to Perenco in October 2018. The transaction is expected to complete in 2020.

Under the terms of the agreement, Petrofac will receive an initial $37.5 million upon signing and a further minimum payment of $82.5 million upon completion. The total consideration of up to $276 million comprises a fixed amount and a series of contingent amounts that depend upon future milestones, including field development, commercial, service contract transition and fiscal terms, and is subject to the level of achievement of the milestones above. Proceeds from the sale will be used to reduce gross debt.

“This disposal reinforces our position as a capital-light business and represents further progress in our stated strategy to enhance returns. We are proud of the work we have done since 2011 to enhance production from our operations in Mexico and, in particular, of the country’s first ever contract migration, which we achieved for the Santuario field in partnership with Pemex and the Mexican authorities,” said Ayman Asfari, Chief Executive, Petrofac.

“The signing of this agreement to acquire the remaining shares in Petrofac’s Mexico operations marks another strategic move for Perenco which will allow us to accelerate the deployment of our expertise in relation to the Santuario, Magallanes and Arenque assets. We believe that our unique know-how will significantly enhance the production and value of these mature fields and allow us to address all the associated challenges,” added Benoit de la Fouchardière, CEO, Perenco.

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