Lukoil Completes Area 4 Deal in Mexico

Russian producer takes over program left by bankrupt Fieldwood Energy.

Area 4 MX map

Russian producer Lukoil has completed a deal to become a lead stakeholder in an Area 4 shallow-water asset adjacent to Tabasco and Campeche in Mexico. Under the deal, Lukoil has acquired a 50% stake in the asset from US independent Fieldwood Energy, which filed for US bankruptcy protection in August 2020, for $685 million. The original deal was priced at $435 million; the additional $250 million is related to expenditures Fieldwood incurred since 1 January 2021.

Fieldwood committed to invest $477 million to increase oil production from the Ichalkil and Pokoch fields from the current level of 25,000 B/D to a plateau level of 115,000 B/D.

Situated in water depths between 35 and 45 m, the fields’ recoverable hydrocarbon reserves amount to 564 million BOE, more than 80% of which is crude oil. Production started in Q4 2021; current average oil production has exceeded 25,000 B/D.

The approved work program includes drilling three development wells (two on Ichalkil and one on Pokoch), upgrading three production platforms, and performing seismic reprocessing and petrophysical studies.

The remaining 50% stake in Area 4 is held by operator PetroBal, a subsidiary of Mexico’s GrupoBal.