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Australian energy major Woodside has approved the $7.2-billion Trion development in Mexico, subject to joint venture approval.

Woodside’s share of capital expenditure would amount to $4.8-billion, with the company holding a 60% interest in Trion and acting as operator, while partner PEMEX Exploracion Produccion holds the remaining 40%.

The project will target the development of an estimated 479-million barrels of oil equivalent of best estimate (2C) contingent resource of oil and gas, and the resource will be developed through a floating production unit (FPU) with an oil production capacity of 100 000 barrels per day. The FPU will be connected to a floating storage and offloading (FSO) vessel with a capacity of 950 000 barrels of oil.

Woodside CEO Meg O’Neill said on Tuesday that Trion is an attractive addition to Woodside’s portfolio of high-quality producing assets in the Gulf of Mexico.

“Trion is a valuable resource with a mature development concept. Our strong balance sheet and disciplined approach enable us to invest in opportunities such as Trion, expanding our global portfolio and delivering long-term value.

“The investment is aligned with Woodside’s strategy, exceeds Woodside’s capital allocation framework targets and will be a strong contributor to Woodside’s cash flows, shareholder returns and the funding of future developments in oil, gas and new energy.

“This development leverages Woodside’s proven expertise in deepwater project execution. The project’s tendering process has resulted in approximately 70% of total forecast capital expenditure as lump sum or fixed rates, with key contracts to be progressively executed following joint venture approval,” O’Neill said.

She noted that Trion has an expected carbon intensity of 11.8 kg carbon equivalent per barrel of oil equivalent average over the life of the field, which is lower than the global deepwater oil average, and will be subject to Woodside’s corporate net equity

“We have considered a range of oil demand forecasts and believe Trion can help satisfy the world’s energy requirements. Two-thirds of the Trion resource is expected to be produced within the first 10 years after start-up.

“We are developing Trion because we believe it will deliver value for Woodside shareholders and benefit for Mexico, including generation of jobs, taxation revenue and social benefit. We value the ongoing relationship with PEMEX and the support of the Mexican Government and regulators,” she said.

The development is subject to joint venture approval and regulatory approval of the field development plan, expected in the fourth quarter of 2023.