BHP Group Ltd. said it has agreed to acquire an additional 28% interest in the Shenzi oil and gas development in the Gulf of Mexico from Hess Corp. for US$505 million.
The acquisition brings BHP’s interest in the development to 72% and adds approximately 11,000 barrels of oil equivalent per day of production, said BHP, which operates the development. The other 28% is owned by Repsol SA.
“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 of petroleum operations.
BHP said it believes that the fundamentals for oil and gas will be attractve for the next decade and likely beyond. It said that there’s potential for price upside in the coming years given the recent slowdown in development activity.
BHP said the effective date of the transaction is July 1, 2020, with an expected close by December.