Oil and gas service provider Petrofac has been selected as the preferred bidder by Petróleos Mexicanos (Pemex) to develop the Arenque project located offshore of Mexico.
Under the terms of the 30-year contract, Petrofac will deliver the integrated production service to develop the Arenque project, situated in the Gulf of Mexico, 30km from the city of Tampico.
The field is currently producing around 5,000 barrels of oil a day and has initial oil in place of approximately 1.2 billion barrels.
Using horizontal wells and secondary recovery techniques, Petrofac intends to improve the recovery factor of the Arenque area.
It also plans to use secondary recovery techniques to increase production from the core area of the field.
The company will receive $7.90 for each barrel of incremental production and Pemex will reimburse 75% of its development expenditure incurred by Petrofac.
The contract is expected to generate an estimated backlog figure of $500m for Petrofac, which will invest $50m in capital
expenditure, in the first two years.
Andy Inglis, Petrofac Integrated Energy Services chief executive, said the contract award strengthens the company’s relationship with Pemex.
“As well as today’s announcement we are also very pleased with the strong start we have made to field operations on Magallanes and Santuario, and the award with Schlumberger of the Pánuco contract,” said Inglis.
Image: Petrofac will deliver the integrated production service contract to develop the Arenque contract, offshore Mexico. Photo courtesy of: Petrofac.