The UAE-based oil services company, Petrofac, announced today that it has completed the migration of its Santuario Production Enhancement Contract (PEC) in Mexico into an interest in a Production Sharing Contract (PSC).

Effective from 18th December, 2017, Petrofac will own a 36% equity interest in the PSC, with the Mexican state oil company, PEMEX Exploration & Production Mexico (PEMEX), having a 64% interest. The contract will run for 25 years, with two optional five-year extensions. Petrofac will be Operator of the block and will carry PEMEX’s share of cash calls for the first year.

The Santuario Production Enhancement Contract was signed in October 2011. It covers the onshore Santuario block in Tabasco State, central Mexico, which produced an average of around 7,000 boed (barrels of oil equivalent), in 2016. At 30th June 2017, the net book value of the project was US $ 260 million, although Petrofac said in its statement that a small impairment charge could be expected as a result of the new arrangement.

Rob Jewkes, Chief Operating Officer, Integrated Energy Services for Petrofac, commented, "We are pleased to have successfully concluded the migration of the first of our Production Enhancement Contracts. We are committed to unlocking value in the block through a new field development plan in conjunction with our partner PEMEX."

The company has major operational centres in Sharjah and Abu Dhabi, where it is currently working on the closing stages of the US$500 million SARB3 offshore development project and the development of artificial islands for the offshore Upper Zakum field.