BHP wins bid to develop a massive deep water oil field in Mexico

Omar Torres/AFP/Getty Images

BHP will be become the operator of, and the 60% owner in, the massive Trion oil field in deep waters of the Gulf of Mexico.

Mexico’s state oil company PEMEX Exploration and Production Mexico will keep a 40% interest in the blocks, about 80 km from the US border, which contain an estimated 485 MMboe of oil.

BHP’s winning bid for Trion includes an upfront cash payment of $US62.4 million ($A83.5 million) and a commitment to a minimum work program up to a maximum of $US320 million ($A428 million).

If the project goes beyond the initial program, BHP will invest the rest of a $US570 million ($A762 million) minimum work contribution and pay PEMEX another $US561.6 million ($A751 million) in cash.

“This opportunity aligns with our strategy of owning and operating Tier-1 assets and provides an opportunity for BHP Billiton to leverage its industry leading deep-water drilling, development and operational expertise to create value in Mexico,” says Steve Pastor, BHP’s president operations petroleum.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.