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November 4, 2020

Petrofac completes sale of Mexican upstream operations to Perenco

Oilfield services provider Petrofac has completed the sale of its non-core assets in Mexico to Anglo-French oil and gas company Perenco.

By Himaja Ganta

Oilfield services provider Petrofac has completed the sale of its non-core assets in Mexico to Anglo-French oil and gas company Perenco.

Back in October 2018, Petrofac first sold 49% of its operations in Mexico to Perenco.

Later, in September last year, Petrofac also agreed to sell its remaining 51% stake in these operations to Perenco.

With the latest transaction, Petrofac has completed the sale of its remaining 51% interest in its upstream IES operations in Mexico to Perenco.

The assets include the Santuario and Magallanes onshore fields, as well as the Arenque offshore field.

Perenco now owns 100% of the Mexican operations.

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This transaction is part of Petrofac’s programme to ‘dispose of non-core assets’.

Petrofac said that it received gross cash consideration of $82.7m on completion.

So far, Petrofac has received $120.2m from the sale of its 51% interest. Funds generated from the sale will be used to reduce the oilfield services provider’s gross debt.

According to Petrofac, additional consideration of up to $155.8m is ‘potentially receivable’. This comprises $80.2m, plus interest payable on completion, which is ‘disputed by Perenco’.

Petrofac said it will ‘initiate formal legal proceedings against Perenco’ to recover the remaining balance.

In a press statement, Petrofac stated: “The uncertainty surrounding the Mexican Energy Reform programme and the outcome of other events is expected to result in a material non-cash impairment charge to be recognised at 31 December 2020.

“This exceptional impairment charge will take into account management’s assessment of the fair value of future consideration receivable.”

In September, Petrofac received a contract to integrate operations, as well as provide maintenance, engineering and construction services for Ithaca’s North Sea assets.

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