BHP Group (BHPB.L), (BHP.AX) said on Friday approved advancing its Trion oil project in Mexico into the design and engineering phase and would spend $544 million to develop its Shenzi North oil project in the Gulf of Mexico.
The BHP Board approved US$258 million in capital expenditure to move the Trion oil project in Mexico into the Front End Engineering Design (FEED) phase.
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 from mid-calendar year 2022.
BHP holds a 60 per cent participating interest in and operatorship of blocks AE-0092 and AE-0093 containing the Trion discovery located in the deep-water Gulf of Mexico offshore Mexico.
PEMEX Exploration & Production Mexico holds a 40 per cent interest in the blocks.
BHP, which is the operator of Shenzi North and holds a 72% stake in it, said the project will add two wells and underwater equipment to establish a new drill with the capacity to produce up to about 30,000 barrels of oil equivalent per day.
Spanish oil company Repsol SA (REP.MC) , which owns the rest of the Shenzi North project, is expected to make a final investment decision (FID) later this year.
"Both Shenzi North and Trion are strong growth assets for our business, providing attractive returns from relatively low carbon intensity resources," Geraldine Slattery, BHP's president of petroleum operations, said in a statement.
Production from the Shenzi North project is expected to start in fiscal 2024, the miner said.