Petrofac will be paid $7.90 for each barrel of oil it will produce from the contracted area and Pemex will repay 75% of the development costs, which is expected to be about $50m in the first two years time.

Under the terms of the 30-year contract, Petrofac will use horizontal wells and secondary recovery techniques to improve the current recovery factor of about 11% of the Arenque field and also increase the present production.

Currently field production capacity stands at approximately 5,000 barrels per day.

The Arenque field is expected to have initial oil in place of about 1.2 billion barrels of oil and is estimated to have considerable upside potential in the rest of the block.

Pemex is estimating the contract to generate $500m in earnings.