BHP Billiton has announced that it submitted the winning bid to acquire 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 (Pemex) will retain a 40 per cent interest in the blocks. Pemex estimates the gross recoverable resource to be 485 MMboe. Subject to satisfaction of conditions (including the obtaining of government approvals), it is anticipated that the relevant agreements would be finalized and signed within 90 days.

BHP Billiton’s bid for Trion includes an upfront cash payment of US$62.4 million and a commitment to a Minimum Work Program (estimated to be up to a maximum of US$320 million).

Should BHP Billiton and Pemex agree to progress the project beyond the Minimum Work Program, BHP Billiton would be required to invest the remainder of the US$570 million Minimum Work Contribution (which includes the Minimum Work Program spend) and a US$624 million cash contribution (which comprises the upfront cash payment of US$62.4 million already paid and the balance of US$561.6 million as a future carry for Pemex). BHP Billiton’s bid also includes a commitment to an additional royalty of 4%.

Steve Pastor, BHP Billiton President Operations Petroleum, said “We see attractive potential in Trion and the Perdido trend, and we are pleased to have the opportunity to further appraise and potentially develop this prospective frontier area of the deep-water Gulf of Mexico.”

“This opportunity aligns with our strategy of owning and operating Tier-1 assets and provides an opportunity for BHP Billiton to leverage its industry leading deep-water drilling, development and operational expertise to create value in Mexico.”