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Pemex, BHP Billiton deep water tie-up eyes first well by end of 2017

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Pemex, BHP Billiton deep water tie-up eyes first well by end of 2017

By David Alire Garcia | MEXICO CITY, March 3

MEXICO CITY, March 3 The first-ever joint
venture in Mexico’s deep waters could begin drilling its first
oil well by the end of this year, a top official with national
oil company Pemex said on Friday.

In December, Pemex teamed up with Australian mining and oil
giant BHP Billiton Ltd to develop its Trion block in
the Gulf of Mexico, a partnership that was sealed on Friday in a
signing ceremony presided over by Mexican President Enrique Pena
Nieto.

Javier Hinojosa, Pemex’s chief of exploration and
production, said in an interview that the two partners could
begin developing the project relatively soon.

The drilling of a so-called delimiting well “could happen by
the end of this year,” while a second, exploratory well would “certainly” go forward in 2018, Hinojosa said.

Both wells are part of a minimum work program set out in the
35-year license contract covering Trion, which also calls for
the acquisition and processing of new three-dimensional seismic
data.

BHP Billiton was selected to be Pemex’s partner on the Trion
block at a competitive auction in early December managed by the
National Hydrocarbons Commission, Mexico’s newly empowered oil
regulator. The partnership is the fruit of a sweeping sector
overhaul finalized in 2014 that ended Pemex’s decades-long
monopoly and allows joint ventures in exploration and production
of oil and gas with equity partners.

The Trion project is expected to require some $11 billion in
investments over the course of its life. Pemex will not have to
contribute funding for the project for at least the next three
years.

The signing ceremony at Pena Nieto’s official residence was
also attended by BHP Billiton Chief Executive Andrew Mackenzie.

“Today marks the beginning of what we hope will be a long
and fruitful relationship between BHP Billiton, Pemex and
Mexico,” said Mackenzie, who pledged to share the company’s deep
water expertise and best practices.

Trion is located near the U.S.-Mexico maritime border in the
Perdido Fold Belt of the Gulf of Mexico, containing estimated
reserves of 485 million barrels of oil and located some 8,430
feet (2,570 meters) below the surface. (Reporting by David Alire Garcia; Editing by Jonathan Oatis)