U.S. private equity fund KKR and Mexico's Pemex are wrapping up details on a $1.2 billion sale and leaseback agreement, according to sources familiar with the operation, as the distressed state-owned oil company scrambles for extra cash.
Pemex, which has suffered from a prolonged oil rout, will sell some of its infrastructure assets to the fund, but will continue to operate and maintain them for 15 years and pay rent to KKR. Pemex plans to repurchase the assets after the lease ends, one of the sources said, speaking on condition of anonymity.
The assets include pipelines, a system of subsea cables, two non-drilling platforms and a facility for gas compression, according to IFR, a Thomson Reuters publication.
Details about the size and timing of the deal, which is seen as a way to quickly monetize Pemex's assets, were not previously reported. A successful deal could encourage other private equity firms to invest in Mexico's energy sector, which opened to private oil producers for the first time in decades in 2014.
KKR plans to finance the operation with its own resources, with a bank credit and with funds raised from a bond issue that was launched this week for $530.8 million.
"The operation is about to be settled," one of the sources said, adding that neither Pemex nor KKR plan to make an announcement once the deal is closed since information about it has already been available.
Pemex confirmed the deal, but declined to comment or provide details.
The company, which has been weighed down by bulging debt and huge losses from crude prices, announced this year it would defer billions of dollars in projects. It has also received some $4.2 billion in a cash injection from the federal government.
Recommended Reading
Kissler: OPEC+ Likely to Buoy Crude Prices—At Least Somewhat
2024-03-18 - By keeping its voluntary production cuts, OPEC+ is sending a clear signal that oil prices need to be sustainable for both producers and consumers.
Buffett: ‘No Interest’ in Occidental Takeover, Praises 'Hallelujah!' Shale
2024-02-27 - Berkshire Hathaway’s Warren Buffett added that the U.S. electric power situation is “ominous.”
Aramco Reports Second Highest Net Income for 2023
2024-03-15 - The year-on-year decline was due to lower crude oil prices and volumes sold and lower refining and chemicals margins.
Enbridge Advances Expansion of Permian’s Gray Oak Pipeline
2024-02-13 - In its fourth-quarter earnings call, Enbridge also said the Mainline pipeline system tolling agreement is awaiting regulatory approval from a Canadian regulatory agency.
Canadian Natural Resources Boosting Production in Oil Sands
2024-03-04 - Canadian Natural Resources will increase its quarterly dividend following record production volumes in the quarter.