Moscow-headquartered Lukoil has completed a deal to become a lead shareholder in Area 4 shallow water asset next to the states of Tabasco and Campeche in Mexico.

Under the deal, initially announced in July 2021, 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, with the additional $250 million related to development expenditure that Fieldwood had incurred since 1 January 2021, Lukoil said in an emailed statement.

Fieldwood had committed to invest $477 million to increase oil production from the Ichalkil and Pokoch fields from the current level of 25,000 barrels per day to a plateau level of 115,000 bpd.

The work programme that was approved by authorities in Mexico earlier this month, includes drilling three development wells (two on Ichalkil and one on Pokoch), upgrading three production platforms, as well as seismic reprocessing and petrophysical studies.

The two fields, which are located in Area 4, are situated in water depths between 35 and 45 metres in the Gulf of Mexico.

The other 50% shareholder in the project operator is Petrobal which is a subsidiary of Mexico’s conglomerate Grupobal.

Lukoil said the project is operated under a production sharing agreement that expires in 2041, with an option to extend it for a period of up to ten years.

Last year, Lukoil announced several major acquisitions outside Russia as the company expects to remain a major supplier of hydrocarbons to the global market in the next several decades.

Earlier in February, it closed a key transaction in which it paid $1.45 billion to Malaysia’s Petronas to buy an almost 10% shareholding in BP's huge Shah Deniz gas field offshore Azerbaijan.

This deal doubled Lukoil's stake in the project to 20%, with BP remaining as operator with a 30% shareholding.