BHP Billiton Named as Pemex's First Deepwater Oil Partner
(Bloomberg) -- BHP Billiton Ltd. will pay $624 million to be Petroleos Mexicanos’ first private partner in producing oil and natural gas in the deep waters of the Gulf of Mexico.
BHP will partner with Pemex, as the state-owned operator is known, to develop oil in the Trion field. Trion, located just south of the maritime border with the U.S., is estimated to contain the equivalent of about 485 million barrels. The Melbourne-based company beat out BP Plc, which offered $604 million, the National Hydrocarbons Commission announced Monday in Mexico City. Both BHP and BP offered the maximum royalty to the state of four percent.
The joint venture with a private oil producer in the Gulf of Mexico signals the beginning of a new era for Pemex, whose 75-year monopoly in Mexico ended in 2013 when the government approved to open the energy industry to foreign competitors. Pemex hopes joint ventures, such as in the Trion field, will assist to reverse 12 years of oil production declines and 16 consecutive quarterly losses that have left the state-owned giant in its most difficult financial standing in company history.
"It will be the first-time in history that Pemex has a joint venture with risk involved," Jose Antonio Gonzalez Anaya, Pemex’s Chief Executive Officer, said in a Dec. 1 interview with Bloomberg Television. "We expect investment as soon as 2017. We have worked quite a bit on the field and it is a production project. The work can be continued relatively quickly."
Deepwater Experience
BHP brings experience in deep-water fields, as it already operates deep-water fields in the Gulf of Mexico on the U.S., including Shenzi and Neptune that lie more than 100 kilometers off the coast of Louisiana. It also has non-operating interest in other Gulf fields such as Atlantis, Mad Dog and Genesis.
The Trion field, which Anaya estimated will bring in as much as $11 billion in investment for Mexico, is located in the Perdido belt, an area of the Gulf of Mexico that spans the U.S.-Mexico maritime border. The historic joint-venture auction attracted only two bidders, as four other companies --Chevron Corp., Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA -- that qualified as operators did not participate.
Mexico will also auction off 10 blocks today, including four in the Perdido belt and six in a southern gulf area known as the Salina Basin. A total of 17 companies grouped into 15 consortia qualified to bid for the blocks.
To contact the reporters on this story: Adam Williams in Mexico City at awilliams111@bloomberg.net ;Amy Stillman in Mexico City at astillman7@bloomberg.net To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net ;Margot Habiby at mhabiby@bloomberg.net Tina Davis
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension