BHP Group PLC Shenzi North project and Trion FEED phase (7442H)
05 August 2021 - 11:34PM
UK Regulatory
TIDMBHP
RNS Number : 7442H
BHP Group PLC
05 August 2021
NEWS RELEASE
Release Time IMMEDIATE
Date 5 August 2021
Release Number 11/21
BHP approves Shenzi North project and moves Trion project into
the FEED phase
The BHP Board has today approved US$544 million in capital
expenditure to execute the Shenzi North oil project in the US Gulf
of Mexico. The capital expenditure approved represents a 100 per
cent share interest. The project offers very attractive returns at
a nominal IRR of over 35 per cent, a breakeven of approximately
US$25/bbl and a payback of less than 2 years(1) . BHP is operator
and holds a 72 per cent share in Shenzi North. Repsol holds the
remaining 28 per cent working interest and is expected to make a
Final Investment Decision later this calendar year.
Shenzi North represents the first development phase of Greater
Wildling, following exploration success in 2017, with the resource
and development plan further refined through Ocean Bottom Node
seismic data and analysis. The project will take advantage of
existing infrastructure and production capacity in the nearby
Shenzi production facility, with value further enhanced through the
recent acquisition of an additional 28 per cent working interest
taking BHP's interest in the Shenzi field from 44 per cent to 72
per cent. The project adds two wells and subsea equipment to
establish a new drill centre north of Shenzi with the capacity to
produce up to approximately 30 mboe per day. Production is expected
to begin in the 2024 financial year.
In addition, the BHP Board has also approved US$258 million in
capital expenditure to move the Trion oil project in Mexico into
the Front End Engineering Design (FEED) phase. The focus of these
studies will be on completion of the engineering, commercial
arrangements and execution planning required to progress to a Final
Investment Decision from mid-calendar year 2022. BHP holds a 60 per
cent participating interest in and operatorship of blocks AE-0092
and AE-0093 containing the Trion discovery located in the
deep-water Gulf of Mexico offshore Mexico. PEMEX Exploration &
Production Mexico holds a 40 per cent interest in the blocks.
Geraldine Slattery, BHP President Operations Petroleum, said
"Both Shenzi North and Trion are strong growth assets for our
business, providing attractive returns from relatively low carbon
intensity resources.
"Shenzi North is aligned with the petroleum strategy to unlock
and deliver further growth options in this key Gulf of Mexico
heartland. This Board decision also marks an important milestone in
advancing the Trion development as we continue to work with our
partner PEMEX towards a Final Investment Decision in calendar year
2022."
[1] At consensus pricing, 10% nominal discount rate.
Further information on BHP can be found at: bhp.com
Authorised for lodgement by:
Stefanie Wilkinson
Group Company Secretary
Media Relations Investor Relations
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