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LUKOIL company announced that it entered into an agreement to acquire operation stake of 50% in the Area 4 project in Mexico by acquiring the operator’s holding company for $435 million, a statement. reported.
According to the statement, the project includes two blocks located at 42 kilometers offshore in the Gulf of Mexico. The two blocks contain two oil fields with recoverable hydrocarbon reserves amount to 564 million barrels of oil (mmboe), according to the statement.
President of PJSC LUKOIL, Vagit Alekperov, said “LUKOIL considers Mexico a strategic region for the development of our international upstream operations”. He added the company will act as the operator of the project. Alekperov also noted that it is notable due to its considerable explored reserves and significant production potential, adding that it naturally complements the company’s existing portfolio of projects in the Gulf of Mexico.
The Project is implemented under a production sharing agreement, which was signed in 2016 for a period of 25 years with the right for an extension for up to 10 years. The partner in the Project is PetroBal, the oil and gas subsidiary of Mexican conglomerate GrupoBAL, with the remaining 50% interest, according to the statement.
The agreement is pending certain conditions, including approval by the Mexican authorities. Regarding the project, the construction of production facilities is under completion to start production during Q3 of 2021.