Perenco signs deal to purchase 49% of Petrofac’s operations in Mexico

Perenco (Oil & Gas) International has reached an agreement to acquire 49% of Petrofac Netherlands Holding, which holds Petrofac’s contracts in Mexico.

The deal will allow Perenco to buy an interest in Petrofac’s Santuario, Magallanes and Arenque operations.

Pursuant to the terms of the agreement, Petrofac will receive an initial cash payment of $200m, with $30m payable upon signing and the remaining $170m payable once the deal is closed.

The company is also entitled to receive additional payments depending upon several future milestones.

Although the exact value of the transaction was not disclosed, Petrofac has capped it at $274m.

Petrofac Group chief executive Ayman Asfari said: “They bring a 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. Today’s agreement also marks further progress in delivering on our strategy to reduce capital intensity.”

The company expects to record a $100m impairment charge upon completion against its 100% equity interest in its Mexican subsidiaries.

It will use the proceeds received from the sale to reduce gross debt.

This transaction will be affected by the sale of 49% of Petrofac Netherlands Holding, which holds the Santuario production sharing contract and the Magallanes and the Arenque production enhancement contracts.

Perenco CEO Benoit de la Fouchardiere said: “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.”

The transaction is subject to the receipt of approval from the Federal Competition Commission of Mexico (COFECE), which is anticipated in the fourth quarter of this year.