LONDON, UK: Woodside, an Australian energy company, has announced that it has made a final investment decision to develop the Trion oil and gas project in Mexico, in partnership with the state-owned PEMEX.
The project, which is expected to produce up to 100,000 barrels of oil per day from 2028, will cost US$7.2 billion, of which Woodside will fund US$4.8 billion, including a capital carry of PEMEX of about US$460 million.
Woodside said the project will deliver strong returns to its shareholders, with an internal rate of return of more than 16% and a payback period of less than four years. The project will also generate economic and social benefits for Mexico.
The Trion project is located in the deepwater Gulf of Mexico, about 200 kilometers off the coast of Tamaulipas. It has an estimated resource of 479 million barrels of oil equivalent, of which Woodside has a 60% participating interest and PEMEX has a 40% interest. Woodside is the operator of the project.
The project will involve a floating production unit (FPU) connected to a floating storage and offloading (FSO) vessel. The FPU will use direct lithium extraction (DLE) technology to extract lithium from the brine produced by the oil wells.
Woodside’s CEO Meg O’Neill said the project is an attractive addition to Woodside’s portfolio and supports its growth strategy.
“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.
She added that the project will have a low carbon intensity and will be subject to Woodside’s greenhouse gas emissions reduction targets.
“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,” she said.
The project is subject to joint venture approval and regulatory approval of the field development plan, expected in the fourth quarter of 2023.
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