Woodside approves Trion development in Mexico
Woodside, an Australian energy company, has made a final investment decision to develop the Trion resource located in Mexico, it said on June 20.
Woodside will be the operator with a 60% participating interest, while PEMEX Exploración y Producción holds the remaining 40%. The estimated total capital expenditure for the development is $7.2bn, with Woodside's share being approximately $4.8bn. The project aims to start producing oil in 2028, pending joint venture and regulatory approvals.
The Trion resource is a large conventional oil and gas reservoir, estimated to hold 479mn barrels of oil equivalent (boe) of best estimate (2C) contingent resources, with Woodside's net economic interest being 287mn boe. The subsurface has undergone extensive appraisal, the company said, including six well penetrations, providing a solid understanding of the resource.
The development plan involves utilising a floating production unit (FPU) with an oil production capacity of 100,000 barrels/day. The FPU will be connected to a floating storage and offloading (FSO) vessel with a capacity of 950,000 barrels of oil. The project's tendering process has secured approximately 70% of the forecast capital expenditure as lump sum or fixed-rate contracts.
Woodside said that the investment in Trion does not change its greenhouse gas emissions reduction targets. The company's CEO, Meg O'Neill, stated that Trion aligns with Woodside's strategy and will contribute to cash flows, shareholder returns, and future developments in oil, gas, and new energy.
"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," she said.
The project is expected to have a carbon intensity of 11.8 kgCO2-e/boe, lower than the global average for deepwater oil. Woodside will apply its emissions reduction targets to Trion.
Trion is situated in a water depth of 2,500 m, about 180 km off the Mexican coastline and 30 km south of the Mexico/US maritime border. It was discovered by PEMEX in 2012 and became part of Woodside's portfolio in 2022 after BHP Petroleum acquired an interest in 2017. Woodside last year completed the merger with BHP’s oil and gas portfolio.
In the initial phase, 18 wells will be drilled, comprising nine producers, seven water injectors, and two gas injectors. Any gas not reinjected or used on the FPU will be transported to Mexican markets.
The development plan is subject to joint venture approval and regulatory approval of the field development plan, anticipated in the fourth quarter of 2023.