Australia's BHP Billiton Wins Bidding for Stake in Mexico's Trion Oil Field

By Robbie Whelan 

MEXICO CITY -- Australia's BHP Billiton won bidding Monday to partner with Mexican state oil company Petróleos Mexicanos in the Trion deep-water oil field in the Gulf of Mexico in an auction in which 10 other deep-water blocks are also being offered.

Billiton outbid BP PLC to become Pemex's first private partner in exploration and production under Mexico's 2013 opening of the oil industry.

Bids for 10 other deep-water blocks up for auction are due to be opened later Monday.

For Trion, both Billiton and BP offered additional royalties of 4%, while Billiton offered an additional cash commitment of $624 million compared with $606 million offered by BP.

Billiton will have 60% of the project and Pemex 40%.

The auction is the fourth under the 2013 opening of the Mexican oil industry, but the first for deep-water reserves and the first to attract the interest of major oil companies.

The Trion field was discovered in 2012 and is thought to contain about 485 million barrels of commercial reserves. Pemex's chief executive, José Antonio González Anaya, said the state company hopes that by 2025, the field will be producing around 120,000 barrels a day.

BHP Billiton is the world's biggest mining company by market value and also has oil operations. Mr. González Anaya said he's confident it will bring significant advantages such as technology to Pemex.

"I'm happy that the bids were so close, and that there wasn't a 'winner's curse.' When bids are far apart sometimes winners may think they offered too much," the executive said.

Write to Robbie Whelan at [e-mail]

(END) Dow Jones Newswires

December 05, 2016 12:22 ET (17:22 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.