Maurel & Prom Buys Shell's Stake in Venezuela
Paris-based Maurel & Prom announced that it has acquired Shell Exploration and Production Investments' 40% interest as Shareholder B in Petroregional del Lago Mixed Company, which operates the Urdaneta West field in Lake Maracaibo, Venezuela.
Maurel & Prom said further that all condition precedents have been satisfied and that the acquisition has been completed.
The total consideration for the acquisition of Shell's shares in the Mixed Company is EUR70 million, funded from Maurel & Prom's existing cash resources and composed as follows: EUR47 million which have been paid at closing of the transaction, and EUR23 million payable in December 2019, on the anniversary date of the transaction closing.
Maurel & Prom Venezuela, subsidiary of Maurel & Prom, has replaced Shell as Shareholder B in the Mixed Company, with a 40% interest. Petróleos de Venezuela (PDVSA), wholly owned subsidiaries Corporación Venezolana del Petróleo (CVP) and PDVSA Social (PDVSAS) collectively referred to as "Shareholder A", jointly own the remaining 60% stake of the Mixed Company.
Michel Hochard, Chief Executive Officer of Maurel & Prom, said: "This transaction fits Maurel & Prom's growth strategy, focusing on opportunities with significant potential in regions and countries where we have operating experience. It provides us access to an established producing asset in a world class petroleum system, with a potential for significant production improvements."
"Investments in oil and gas projects require a long term approach, and we expect that jointly with PDVSA and its subsidiaries we will help boost the redevelopment of the Field in the years to come. We have operated in Venezuela in the past and our experience of the region make us confident in the ability to transform this opportunity into a successful project," Michel added.
The production of the Field in 2018 is estimated to be around 15,500 barrels of oil per day on a 100% basis (approximately 6,200 barrels of oil per day net to Shareholder B's 40% interest), and there is potential for a swift ramp-up in production. In particular, it is expected that a number of targeted well interventions in the first months of operations could have a significant impact on production.
Maurel & Prom will also maintain the efforts which have been deployed over the years to achieve high standards of health, safety, and environmental practices on the Field.