Renaissance to partner with Lukoil to develop Amatitlán oil block in Mexico

Renaissance Oil has entered an Integrated Exploration and Production Contract with PJSC Lukoil to develop the 230km² Amatitlán block located near Poza Rica, Veracruz in Mexico.

The Amatitlán block is situated within the Tertiary aged Chicontepec paleochannel formation that covers nearly 3,800km².

It is known to host one of the largest hydrocarbon resources in Mexico, holding an estimated 59 billion barrels of oil equivalent.

Renaissance chief geochemist Dan Jarvie said: “The Upper Jurassic shale interval is widely considered to be the major carbonate source rock for the oil-rich Chicontepec formation but the Upper Jurassic formations have not been commercially developed.

“Renaissance’s analysis indicates the Upper Jurassic interval is an oil-rich, hybrid system in the Amatitlán block and is highly prospective for targeted stacked pay development of this thick unconventional resource.”

Largely underdeveloped, the Amatitlán field has produced around 175,000 barrels of light oil, ranging from 34° API to 44° API.

Renaissance drilling and completions advisor Nick Steinsberger said: “Our goal is to apply modern oilfield development technologies in Amatitlán to re-establish production in the underdeveloped Chicontepec formation and to commercialise the Upper Jurassic shale formations.”

Exploration wells previously indicated oil and natural gas at various depths of drilling on the Amatitlán block. 

Under the deal with Lukoil, Renaissance will acquire a 25% indirect interest in Petrolera de Amatitlán from Marak Capital,  the contractor of the Integrated Exploration and Production Contract for the Amatitlán block and holder of 50% indirect interest in Petrolera.

Renaissance will pay $1.75bn as consideration for the interest acquisition of Petrolera de Amatitlán.

The remaining 50% interest of Petrolera de Amatitlán is with Lukoil.

Renaissance CEO Craig Steinke said: “Renaissance, while playing the lead role in operations, is delighted to be working alongside LUKOIL in order to fully develop this high potential property.

“Amatitlán is a strong strategic fit for Renaissance as the leading independent onshore oil field operator in Mexico, with a solid technical team of global experts in shale resource development.”

Under the deal, Renaissance will take the lead role in operations for Petrolera to jointly develop the Amatitlán block, which is currently held by Pemex-Exploración y Producción. 

Renaissance is also finalising separate option agreements, through which it will obtain an exclusive period to increase its participating interest in Petrolera up to 62.5%, by purchasing an additional 12.5% from Marak and 25% from Lukoil, upon migration of the Integrated Exploration and Production Contract to a Contract of Exploration and Extraction.

Renaissance expects the transaction to close this month.