Petrofac close to securing big production contract in Mexico

Oilfield services group Petrofac has been declared, together with its partner Schlumberger, as the selected bidder on the Pnuco integrated production service contract in Mexico.

The area contains four mature onshore fields operated by Petrleos Mexicanos (PEMEX) and was discovered in early 1900s with original oil in place of around 6.8bn barrels. The fields have some 1,600 wells of which around 200 are currently producing a total of 1,500 barrels of oil per day.

Petrofac and Schlumberger will develop the fields together but Petrofac will be the lead operator. It will be reimbursed for 75% of its development expenditure and receive a tariff for each barrel of incremental production. The company has initially invested $17.5m for the first two years.

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"I am delighted to develop further our relationship with PEMEX and bring our field management capability to support the development of Mexico's oil & gas resources," said Andy Inglis, the Chief Executive of Petrofac's Integrated Energy Services division.

"This contract is the first example of our agreement with Schlumberger to work together to deliver integrated and high-value production projects. I believe that our complementary skill sets and proven execution capability will maximise the potential of these fields for PEMEX."

The contract runs for 30 years and is expected to be signed in late August 2012; field operations should begin at the start of 2013, Petrofac said.

BC