Mining giant BHP (ASX:BHP)
has approved US $544 million to execute the Shenzi North oil project in the US Gulf of Mexico. The capital represents a 100 per cent share interest.
The project offers returns at a nominal IRR of over 35 per cent, a breakeven of approximately US $25/bbl and a payback of less than 2 years.
BHP holds a 72 per cent share in Shenzi North and Repsol holds the remaining 28 per cent working interest.
Shenzi North represents the first development phase of Greater Wildling. The project adds two wells and subsea equipment to establish a new drill centre north of Shenzi, with the capacity to produce up to approximately 30 mboe per day.
Production is expected to begin in the 2024 financial year.
BHP President Geraldine Slattery said, “Shenzi North is aligned with the petroleum strategy to unlock and deliver further growth options in this key Gulf of Mexico heartland."
Shares in BHP (ASX:BHP)
are trading 2.6 per cent lower at $51.76.