Petrofac today confirmed it had completed the migration of the Santuario Production Enhancement Contract (PEC) into an interest in a Production Sharing Contract (PSC).
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 c. 7 kboed in 2016.
Petrofac will own a 36% equity interest in the PSC, with PEMEX Exploration & Production Mexico (PEMEX) having a 64% interest. The PSC 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.
Rob Jewkes, chief operating officer, Integrated Energy Services, said: “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.”
As at 30 June 2017, the net book value of the Santuario PEC was $260million. As a result of the migration, Petrofac expects it will incur a small impairment charge.
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