BHP commits $1.34bn to petroleum ventures

BHP in the Gulf of Mexico. Image: BHP.

BHP has approved two major funding packages worth a combined $US952 million ($1.34 billion) to advance its petroleum prospects offshore the United States and Mexico.

The company will contribute $US696 million in funding to develop the Atlantis Phase 3 project in the Gulf of Mexico. This follows last month’s sanction of the project by operator BP, which holds a 56 per cent majority share.

Atlantis Phase 3, located 208 kilometres off the coast of Louisiana, is a subsea tie back of eight new production wells that will be drilled and completed to access infill resource opportunities.

It will take advantage of existing infrastructure, production ullage and marketing agreements.

The project is expected to be in production during the 2020 calendar year, with output estimated to increase by 38,000 barrels of oil equivalent per day at its peak.

BHP president operations petroleum Steve Pastor said the Atlantis Phase 3 project provided a competitive opportunity to deliver on the company’s strategy to grow resources in Tier 1 conventional deepwater assets.

“The project will further expand the Atlantis field and will provide cost-efficient, near term volumes,” Pastor said.

BHP has also approved $US256 million in funding to drill an additional appraisal well (3DEL) and for additional studies in the Trion field in Mexico to further define the scale and characterisation of the resource.

The company’s primary objectives of the appraisal well and studies are to confirm the volume and composition of hydrocarbons near the crest of the Trion structure, and study the viability of development of the Trion field.

“A further appraisal well at Trion, following the recent encouraging results at the 2DEL appraisal well, reduces investment risk and adds value to this project. If Trion is determined to be commercial, these funds will also provide an option to potentially accelerate development of Trion,” Pastor said.

BHP, which owns a 60 per cent interest in Trion, expects the appraisal well to be drilled in the second half of the 2019 calendar year.