Green light shines bright for $7.2 billion deepwater oil project in Gulf of Mexico

Australia’s energy giant Woodside has received a stamp of approval from the Mexican regulator, Comision Nacional de Hidrocarburos (CNH), for a field development plan (FDP) covering a deepwater oil project in the Perdido basin in the Gulf of Mexico, located 30 km south of the Mexico-U.S. maritime border.

Woodside previously delayed the FID from 2022 until 1Q 2023 for the Trion project in Mexico, however, the FID to develop the resource was not revealed until June 2023. At that time, it was subject to Trion joint venture approval and regulatory approval of the FDP. Both of these conditions have now been met. The forecast total capital expenditure for the project is $7.2 billion out of which $4.8 billion is the firm’s share including capital carry of PEMEX of approximately $460 million.  

While welcoming the approval of FPD, Meg O’Neill, Woodside CEO, remarked: “This milestone allows us to fully progress into execution phase activities with our contractors. We look forward to working with PEMEX and our other stakeholders in Mexico to deliver this important project.”

Following the approval of the FDP, the Australian giant has booked proved (1P) undeveloped reserves of 324.7 mmboe gross – 194.8 mmboe Woodside share – and proved plus probable (2P) undeveloped reserves of 478.7 mmboe gross (287.2 mmboe Woodside share).

According to the company, the execution phase activities are progressing and several contracts related to the development of the project have been executed, including a floating production unit (FPU) engineering, procurement, and construction (EPC) contract with HD Hyundai Heavy Industries, a rig contract with Transocean, an FPU and floating storage offloading (FSO) installation contract with SBM Offshore, and a subsea trees contract with OneSubsea UK.

Located in a water depth of 2,500 m, approximately 180 km off the Mexican coastline and 30 km south of the Mexico/U.S. maritime border, Trion was discovered in 2012 by PEMEX. BHP Petroleum acquired an interest in 2017, which subsequently became part of Woodside’s portfolio in 2022. The project will be developed through an FPU with an oil production capacity of 100,000 barrels per day, which will be connected to an FSO vessel with a capacity of 950,000 barrels of oil.

The development is expected to entail 18 wells – nine producers, seven water injectors, and two gas injectors – drilled in the initial phase, with a total of 24 wells drilled over the life of the Trion project. The gas that is not reinjected or used on the FPU will be delivered to the domestic natural gas network by a subsea gas pipeline.

The first oil is targeted for 2028 and the Gulf of Mexico project is expected to have a carbon intensity of 11.8 kg CO2-e/boe over the life of the field. Woodside is the operator of the Trion development with a 60 per cent participating interest while PEMEX Exploración y Producción (PEMEX) holds the remaining 40 per cent.

Aside from pursuing oil and gas projects, Woodside is interested in finding new opportunities in emerging energy sectors. To this end, the Australian player entered into non-binding agreements to collaborate with Sumitomo Corporation and Sojitz Corporation on global opportunities in new energy which could entail ammonia, hydrogen, carbon capture and storage (CCS), and carbon management technology.