BHP approves capex spending for Trion, Shenzi North projects

Australia’s BHP has approved plans to spend more than $800mn on work at two fields in the Gulf of Mexico: Trion and Shenzi North.

In a statement, BHP said that its board of directors had approved plans to allocate $258mn in capital expenditures at Trion, a deepwater field located off the coast of the Mexican state of Tamaulipas. These funds will be used to move the project into the front-end engineering and design (FEED) phase, it reported.

This decision clears the way for US-based McDermott International to begin implementing the FEED contract it won from BHP earlier in 2021. In turn, the statement said, the Australian company will use the results of the FEED study to help decided whether to proceed with development work at Trion.

“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 [FID] from mid-calendar year 2022,” it explained.

Currently, BHP has a 60% stake in AE-0092 and AE-0093, the two blocks that encompass the Trion field, and also serves as operator of the project. The remaining 40% is held by Mexico’s national oil company (NOC) Pemex.

The statement went on to say that BHP had approved the allocation of another $544mn in capital expenditures for Shenzi North, an unrelated site in the US section of the Gulf of Mexico. This project represents the first phase of development work on the Greater Wildling project and will “take advantage of existing infrastructure and production capacity in the nearby Shenzi production facility,” the company noted.

The Australian company holds a 72% stake in the Shenzi field. The remaining 28% of equity is owned by Repsol (Spain).

Geraldine Slattery, BHP’s president for petroleum, hailed the progress made on both projects. “Both Shenzi North and Trion are strong growth assets for our business, providing attractive returns from relatively low carbon intensity resources,” she said. “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.”