BHP Approves $ 544 Million for Gulf of Mexico Project | Rigzone
BHP’s board of directors announced that it has approved $ 544 million in capital spending to execute the Shenzi North oil project in the Gulf of Mexico in the United States.
The project offers “very attractive” returns with a nominal IRR of over 35%, a breakeven point of around $ 25 a barrel and a return on investment of less than two years, BHP noted. Shenzi North represents the first phase of development for Greater Wildling. The project, which will take advantage of existing infrastructure and production capacity at the neighboring Shenzi production facility, adds two wells and subsea equipment to establish a new drilling center north of Shenzi. Production is expected to start in 2024.
In addition to Shenzi North’s $ 544 million investment approval, the company’s board of directors also approved $ 258 million in capital spending to bring the Trion oil project in Mexico into the phase of. initial engineering design. Trion’s studies will focus on completing the engineering, business arrangements, and execution planning necessary to move towards a final investment decision from mid-calendar year 2022, BHP said.
“Shenzi North and Trion are both strong growth assets for our business, delivering attractive returns from relatively low carbon resources,” said Geraldine Slattery, president of oil operations at BHP, in a statement.
“Shenzi North is aligned with the petroleum strategy to unlock and deliver new growth options in this key heart of the Gulf of Mexico. This decision by the Board of Directors also marks an important step in advancing Trion’s development as we continue to work with our partner PEMEX towards a final investment decision in calendar year 2022 ”, Slattery added in the statement.
BHP has a 72 percent operated stake in Shenzi North, with Repsol holding the remaining 28 percent of the working stake. BHP has a 60% operational interest in blocks AE-0092 and AE-0093, which contain the Trion discovery. PEMEX Exploration & Production Mexico holds the remaining 40% interest in the blocks.
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