Asset A&D

BHP Acquires Hess’ Stake in the Shenzi Field in the U.S. GoM

By Kunal Raj
October 05, 2020
a minute read
BHP Shenzi Rig at Dusk

BHP Billiton Petroleum (Deepwater) Inc., a subsidiary of international mining group BHP Group Ltd. has entered into an agreement with NYSE-listed Hess Corp. to acquire its 28% working interest in the Shenzi field located in the Gulf of Mexico, for a total consideration of US$505 million. Upon completion, BHP Billiton will hold an increased 72% operated interest in the field, with integrated Spanish energy major Repsol SA holding the remaining 28%.

The Shenzi field is located within the Green Canyon – Blocks 609, 610, 653 and 654, deepwater Gulf of Mexico, situated in water depths of around 1,310 meters, approximately 120 miles off the coast of Louisiana. The field was discovered in 2002, commenced production in 2009. The work programme includes appraisal and development planning of the northern portion of the field. The acquisition gives BHP an additional ~11,000 barrels of oil equivalent per day (boe/d) of production, of which 90% is oil.

“Proceeds will be used to fund our world class investment opportunity in Guyana. This sale is aligned with our strategy to preserve cash and preserve the long term value of our assets in the current low oil price environment,” said John Hess, CEO of Hess Corp.

“This transaction aligns with our plans to enhance our petroleum portfolio by targeted acquisitions in high quality producing deepwater assets and the continued de-risking of our growth options,” said Geraldine Slattery BHP’s President, Petroleum Operations.

“As the operator, we have more opportunity to grow Shenzi high-margin barrels and value with an increased working interest,” she added.

The transaction is subject to customary closing conditions, and is expected to be completed in December 2020, with an effective date of July 1st, 2020.

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