Oil and gas services firm Petrofac said it had won a contract to develop the Arenque contract area, offshore Mexico.
The firm said the Arenque field, which is currently producing around 5,000 barrels per day, had initial oil in place of approximately 1.2bn barrels with a current recovery factor of around 11%.
Under the contract, which runs for 30 years, Petrofac plans to improve the recovery factor and increase production from the core area of the field using horizontal wells and secondary recovery techniques.
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In the first two years, the company will commit approximately $50m in capital expenditure.
In return Petrofac will receive a tariff of $7.90 for each barrel of incremental production and will be reimbursed for 75% of its development expenditure through a cost recovery mechanism.
The company said the integrated production service contract, the fourth such deal Petrofac has been awarded in Mexico since August last year, confirmed its commitment to the country.
