05 Aug - 4 min read

BHP approves Shenzi North project and Trion FEED phase

BHP approves Shenzi North project and Trion FEED phase

BHP Group Plc
Registration number 3196209
Registered in England and Wales
Share code: BHP
ISIN: GB00BH0P3Z91

NEWS RELEASE
Release Time      IMMEDIATE
Date              5 August 2021
Release Number    11/21


BHP approves Shenzi North project and moves Trion project into the FEED
phase

The BHP Board has today approved US$544 million in capital expenditure to execute
the Shenzi North oil project in the US Gulf of Mexico. The capital expenditure
approved represents a 100 per cent share interest. The project offers very attractive
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(1). BHP is operator and holds a 72 per
cent share in Shenzi North. Repsol holds the remaining 28 per cent working interest
and is expected to make a Final Investment Decision later this calendar year.

Shenzi North represents the first development phase of Greater Wildling, following
exploration success in 2017, with the resource and development plan further refined
through Ocean Bottom Node seismic data and analysis. The project will take
advantage of existing infrastructure and production capacity in the nearby Shenzi
production facility, with value further enhanced through the recent acquisition of an
additional 28 per cent working interest taking BHP’s interest in the Shenzi field from
44 per cent to 72 per cent. 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.

In addition, the BHP Board has also approved US$258 million in capital expenditure
to move the Trion oil project in Mexico into the Front End Engineering Design (FEED)
phase. The focus of these studies will be on completion of the engineering,
commercial arrangements and execution planning required to progress to a Final
Investment Decision from mid-calendar year 2022. BHP holds a 60 per cent
participating interest in and operatorship of blocks AE-0092 and AE-0093 containing
the Trion discovery located in the deep-water Gulf of Mexico offshore Mexico.
PEMEX Exploration & Production Mexico holds a 40 per cent interest in the blocks.

Geraldine Slattery, BHP President Operations Petroleum, said “Both Shenzi North
and Trion are strong growth assets for our business, providing attractive returns from
relatively low carbon intensity resources.
“Shenzi North is aligned with the petroleum strategy to unlock and deliver further
growth options in this key Gulf of Mexico heartland. This Board decision also marks
an important milestone in advancing the Trion development as we continue to work
with our partner PEMEX towards a Final Investment Decision in calendar year 2022.”

(1)   At consensus pricing, 10% nominal discount rate.


Further information on BHP can be found at: bhp.com

Sponsor: UBS South Africa (Pty) Limited

Authorised for lodgement by:
Stefanie Wilkinson
Group Company Secretary


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BHP Group Limited ABN 49 004 028 077                   BHP Group plc Registration number 3196209
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Date: 05-08-2021 03:40:00
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