BHP secures Gulf of Mexico deal with Pemex

BHP Billiton has won a bid to acquire a majority share in the deep-water Trion oil field project in the Gulf of Mexico.

The diversified resources company will receive a 60 per cent interest in the discovery and will partner with Mexico’s state-owned oil company, Pemex (40 per cent), on the project.

BHP’s bid involves an upfront US$62.4 million ($83.5 million) cash payment and a commitment to a minimum work program, estimated to be up to US$320 million.

If the partners decide to advance the project beyond the program, BHP Billiton will invest the remainder of the US$570 million minimum work contribution and US$624 million in cash. The bid also includes a commitment to an additional four per cent royalty.

BHP’s petroleum president Steve Pastor said the company saw attractive potential in the assets offshore Mexico.

“This opportunity aligns with our strategy of owning and operating tier one assets and provides an opportunity for BHP to leverage its industry leading deep-water drilling, development and operational expertise to create value in Mexico,” Pastor said.

BHP outbid BP – the only other bidder – to secure the deal, which is expected to pass in 90 days.