BHP Billiton has submitted the winning bid to acquire the operatorship and a 60% participating interest of blocks AE-0092 and AE-0093, containing the Trion discovery in the deepwater Gulf of Mexico.

PEMEX Exploration & Production Mexico will retain a 40% interest in the blocks.

The Mexican operator estimates the gross recoverable resource to be 485 MMboe. Subject to satisfaction of conditions (including obtaining government approvals), the relevant agreements are anticipated to be finalized and signed within 90 days.

BHP Billiton’s bid for Trion includes an upfront cash payment of $62.4 million and a commitment to a minimum work program (estimated to be up to a maximum of $320 million).

Should BHP Billiton and PEMEX agree to progress the project beyond the minimum work program, BHP Billiton will be required to invest the remainder of the $570 million minimum work contribution (which includes the minimum work program spend) and a $624 million cash contribution (which comprises the upfront cash payment of $62.4 million already paid and the balance of $561.6 million as a future carry for PEMEX). The bid also includes a commitment to an additional royalty of 4%.

Steve Pastor, BHP Billiton President Operations Petroleum, said: “We see attractive potential in Trion and the Perdido trend, and we are pleased to have the opportunity to further appraise and potentially develop this prospective frontier area of the deepwater Gulf of Mexico.”

Total will operate block 2 in the Perdido basin with a 50% interest, the remainder held by ExxonMobil. The block covers an area of 2,977 sq km (1,149 sq mi) in water depths ranging from 2,300-3,600 m (7,546-11,811 ft).

In the Salina basin, Total, Statoil, and BP are equal partners (33.4%) in block 1, covering 2,381 sq km (1,093 sq mi), and block 3, covering 3,287 sq km (1,269 sq mi).

The winning bids for both blocks consisted of an additional royalty of 10% (on potential future revenues) and an additional work program equivalent to one biddable well per block. Each block also has a minimum work program as defined by the authorities, including a variety of geological activities but no required wells.  

INPEX, PEMEX, and Chevron were assigned equal shares in block 3 in the Perdido Fold Belt in northern Mexican sector of Gulf of Mexico, with Chevron designated operator.

Block 3 covers 1,687 sq km (651 sq mi) in water depths of 500-1,700 m (1,640-5,577 ft).

The concession is in an area where new hydrocarbon discoveries are expected, close to the PEMEX-discovered Trion oil field and other producing fields on the US side.

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