BHP takes bigger stake in Shenzi
PERTH (miningweekly.com) – Mining major BHP has struck a $505-million membership interest purchase and sale agreement with Hess Corporation to acquire an additional 28% working interest in Shenzi, a six-lease development in the deepwater Gulf of Mexico.
The acquisition will bring BHP’s working interest to 72% and immediately add about 11 000 bbl/d of oil-equivalent production.
BHP said on Tuesday that this transaction was consistent with the company’s strategy of targeting counter-cyclical acquisitions in high-quality producing or near producing assets.
“This transaction aligns with our plans to enhance our petroleum portfolio by targeted acquisitions in high quality producing deep-water assets and the continued de-risking of our growth options,” said BHP’s president for its petroleum operations, Geraldine Slattery.
“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.
“While our strict capital allocation framework tests ensure all investments are resilient to low points in the commodity cycle, we also recognise the potential for price upside over the medium term given the global slowdown in development activity, and we are well positioned to participate in that upside. We continue to believe that the fundamentals for oil and advantaged gas will be attractive for the next decade and likely beyond.”
The transaction is expected to close in December this year, subject to the satisfaction or waiver of customary and transaction-specific conditions.
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