German oil and gas company Wintershall Dea is expanding its presence in Mexico following a farm-in agreement for the acquisition of a stake in the Hokchi Block located offshore Mexico.
Wintershall Dea announced on Monday it had signed an agreement with Hokchi Energy, the Mexican subsidiary of Pan American Energy, to acquire a 37 per cent non-operated participating interest in the Hokchi Block, with a conditional option to increase its participation up to 40 per cent at a later stage.
Through this acquisition, Wintershall Dea is expanding its presence in Mexico and becoming the second-largest interest holder in the Hokchi Block after operator Hokchi Energy.
The Hokchi Block was awarded in Mexico’s licensing round 1.2 and is operated by Hokchi Energy. The shallow-water block is developed as a subsea tie-back to two offshore platforms, Satellite and Central, and was brought on-stream in May 2020 following an appraisal campaign.
The well stream is piped over a distance of 24 kilometres from the two offshore platforms to an onshore processing facility where oil and gas are separated and treated for further sale to the Mexican state company Pemex. The block currently produces around 26,000 barrels of oil equivalent per day with a planned ramp-up to a gross production of 37,000 barrels of oil equivalent per day by 2023.
Thilo Wieland , a member of Wintershall Dea’s Management Board responsible for Latin America, emphasises: “Mexico is a growth country for Wintershall Dea, and the acquisition of the Hokchi Block interest is a clear sign of this. With Hokchi, we are gaining a producing asset that fully meets our strategic requirements, also in terms of efficiency and emissions.”
The transaction is subject to obtaining government approvals, including from Mexico’s National Hydrocarbons Agency (CNH) and antitrust agency (COFECE) and is expected to be closed before the end of the first quarter of 2023.
Martin Jungbluth , Managing Director of Wintershall Dea in Mexico, underlines the importance of this new asset: “It’s near our Zama, Polok and Chinwol discoveries as well as our own operated exploration block 30.”
In Mexico, Wintershall Dea and Hokchi Energy are already partners in Block 2, located in the southeast of the Gulf of Mexico.