Russia’s Lukoil completes purchase of stake in offshore oil project in Mexico

A 3D printed natural gas pipeline is placed in front of displayed Lukoil logo in this illustration taken, February 8, 2022. REUTERS/Dado Ruvic/Illustration

MOSCOW, Feb 25 (Reuters) – Russia’s second-largest oil producer Lukoil (LKOH.MM) said on Friday it has completed its acquisition of a 50% operator interest in an offshore oil project in Mexico, part of its drive to expand its global reach.

The company said it finalised the deal to buy the stake in the Area 4 project by acquiring the operator’s holding company following approval by local authorities.

Lukoil put the transaction value at $435 million plus expenditures of $250 million.

The project includes two blocks, which are located 42 kilometres offshore in the Gulf of Mexico. Two oilfields – Ichalkil and Pokoch – are located within the blocks. The recoverable hydrocarbon reserves of the fields amount to 564 million barrels of oil equivalent, more than 80% of which is crude oil.

Production at the fields started in the fourth quarter of 2021, while current average daily oil production has exceeded 25,000 barrels.

The project is being developed in three phases, with a peak daily production rate estimated to be more than 115,000 barrels of oil equivalent. The partner in the project is PetroBal, the oil and gas subsidiary of Mexican conglomerate GrupoBAL, with the remaining 50% interest.

Reporting by Maria Kiselyova and Vladimir Soldatkin; Editing by Susan Fenton

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