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UPDATE: Petrofac set for another contract win in Mexico

UPDATE: Petrofac set for another contract win in Mexico

--Adds broker comments from Investec ---

Oil services specialist Petrofac (LON:PFC) and partner Schlumberger are set to develop four onshore fields in Mexico.

The pair were declared the selected bidder for the Pánuco integrated production service contract where PEMEX is operating the fields.

The contract runs for 30 years and Petrofac will be the lead operator, it emerged.

The contract area was discovered in early 1900s with original oil in place of around 6.8bn barrels. The fields have around 1,600 wells of which around 200 are currently producing a total of 1,500 barrels of oil per day. 

The award demonstrates the company's continued success and commitment to Mexico.

In August last year it was awarded two services contracts by PEMEX to develop the Magallanes and Santuario blocks in central Mexico.  It successfully completed the transition and assumed operational responsibility for the blocks at the beginning of February this year.

Broker Investec said that while the contract was not "game changing",  it was in line with the strategy of adding one to two projects to Petrofac's Integrated Energy Services division (IES) a year, which should allow the business to deliver $300 million of net income by 2015.

The broker rates Petrofac shares a 'buy' and targets a price of 1900 pence.

As at 3.57 pm, shares in Petrofac were down 3.64 per cent, at 1,457 pence.


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June 21 2016

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