Anglo-Australian multinational mining, metals and petroleum firm, BHP, is to acquire a 28% stake in the Shenzi oil and gas field from Hess Corporation, Kallanish Energy reports.
The deal between BHP and U.S.-based independent energy company Hess has a purchase price of $505 million and is expected to close by December 2020, subject to regulatory approval. It will bring BHP’s overall interest in the Shenzi field to 72%, alongside Spanish energy firm, Repsol, which owns the remaining 28%.
The Shenzi field is located in the Gulf of Mexico and is operated by BHP. The company said on Tuesday that the acquisition will add approximately 11,000 barrels of oil equivalent per day of production (90% oil).
In September this year, BHP announced that the Shenzi field had exceeded nominal capacity of 100,000 barrels of oil per day (Bpd) by recording sustained rates of 120,000 Bpd. In the year ending June 30, 2020, BHP recorded a total output of 6,740 million barrels of oil equivalent from the field, a 22.6% year-on-year decline.
BHP stated the acquisition is in line with its strategy of “targeting counter-cyclical acquisitions in high-quality producing or near producing assets.” In a separate statement, Hess confirmed that it will invest the funds in its stake in the Guyana offshore development, operated by ExxonMobil.
“We are purchasing the stake in Shenzi at an attractive price, it’s a tier one asset with optionality, and key to BHP’s Gulf of Mexico heartland. As the operator, we have more opportunity to grow Shenzi high-margin barrels and value with an increased working interest,” said BHP president petroleum operations, Geraldine Slattery.
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