BHP Strikes Oil at Caicos in Deepwater Gulf of Mexico

BHP Billiton Ltd. said Wednesday it had encountered oil in multiple horizons at the Caicos exploration well in the deepwater Gulf of Mexico.

Drilled to a total depth of 30,803 feet, the well is located at Green Canyon Block 564 approximately 100 miles of Louisiana, said Steve Pastor, BHP Billiton president of petroleum operations, at an investor briefing in London.

BHP will drill the well using the Deepwater Invictus (UDW drillship), BHP Billiton spokesperson Bronwyn Wilkinson told Rigzone. Wilding is located in a block adjacent to Caicos, one of several discoveries in the central Gulf of Mexico Miocene, according to a BHP Billiton presentation.

Pastor said the company was encouraged by the Caicos results and is moving to further appraise the area. With success at Caicos and Shenzi North, BHP Billiton continues to be optimistic around the opportunity for a commercial development in the area, Pastor told investors.

In August 2015, the company encountered hydrocarbons in the second of two Shenzi North sidetrack wells it had drilled in the U.S. Gulf, according to the company's Oct. 21, 2015 report for the quarter ended Sept. 30, 2015.

Next month, BHP Billiton will drill the Wilding well, Pastor stated.

The company has a “rich portfolio of brownfield project options,” with total capital expenditure of $2.5 billion and an average IRR [internal rate of return] of 45 percent that will help offshore declining fields, Pastor told investors. Thanks to significant improvements in capital efficiency, major capital projects like Mad Dog 2 are now economically attractive, even below $50 per barrel of oil, Pastor added.

Earlier this year, the company reported it would focus its petroleum exploration program on three conventional deepwater basins: the Gulf of Mexico, the Northern Beagle sub-basin offshore Western Australia, and the Caribbean. BHP said it would invest $900 million in financial year 2017, starting July 1.


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