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Woodside: Gulf Of Mexico Has Solid Growth Potential

The Gulf of Mexico offers some good growth opportunities thanks to the quality assets BHP operates there, Australia’s Woodside Petroleum’s chief executive Meg O’Neill told MarketWatch.

"One of the things that I think is really exciting about the merger is it does give us a substantially increased growth optionality when we look at the quality assets in the Gulf of Mexico, the quality assets we have here in Australia and then other opportunities in places like Trinidad, Tobago, Mexico and Senegal," she said in an interview.

BHP sold its oil business to the Australian major earlier this month in an all-stock merger deal.

“Merging Woodside with BHP’s oil and gas business delivers a stronger balance sheet, increased cash flow and enduring financial strength to fund planned developments in the near term and new energy sources into the future,” Woodside said in its statement at the time.

BHP’s assets in the Gulf of Mexico, according to O’Neill, were particularly valuable. The assets include operating stakes in two fields—Shenzi and Neptune—and non-operating interests in two other fields, Atlantis and Mad Dog. BHP recently approved a $544-million cash injection for the development of Shenzi North.

"We believe there is significant running room in those assets," O’Neill told MarketWatch.

The Shenzi field holds estimated recoverable reserves of 350 to 400 million barrels of oil equivalent and more in potential reserves that are also being targeted for exploitation, according to Offshore Technology. It has a production capacity of 100,000 bpd but exceeded that in the first year of production.

The Neptune field has reserves estimated at between 100 and 150 million barrels and the capacity to produce 50,000 bpd of crude oil.

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Atlantis, operated by BP, is the third-largest oil field in the Gulf of Mexico. It has a production capacity of 200,000 bpd of crude oil. Mad Dog, another field operated by BP, holds between 200 and 450 million barrels of oil equivalent and can produce some 80,000 bpd.

By Irina Slav for Oilprice.com

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