BHP Will Not Leave TrionBy Pedro Alcalá | Wed, 07/28/2021 - 09:45
A recent press release from BHP has surfaced contradicting the rumors started last week that the Australian natural resources company would abandon all of its oil and gas operations, including its Mexican deepwater venture Trion, by making clear the project’s importance to the company’s portfolio.
The rumors began when a Bloomberg report quoted an anonymous insider source within the company claiming that the corporate group’s entire portfolio was being evaluated to begin a divestment process from all oil and gas projects, making BHP exclusively a mining company as it once was.
At the time, company spokesperson Judy Dane responded to this report by saying that "BHP does not comment on rumor or speculation.” However, this move is aligned with a number of other major players in the oil and gas sector who are beginning to plan their future within the context of the upcoming energy transition and an operational flow outside of any fossil fuel investments.
An important example of this is Norwegian NOC Equinor, formerly known as Statoil. In 2019, Equinor was rated by Westwood Global Energy Group and Offshore Magazine as the leading NOC when it came to international oil and gas exploration activities, with 92 exploration wells drilled outside of its home country since 2008, dwarfing second place CNOOC and its 33 wells; this included wells drilled in projects within Mexico’s deepwater basins. By the end of 2020, Equinor had begun dropping all of these exploration activities, including the aforementioned assets in Mexico.
However, BHP has now divulged statements from Trion Project Director Stephan Drouaud which make clear the importance of this deepwater venture in the Australian company’s portfolio. While these statements do not contradict the overall notion that BHP might be divesting from the oil and gas industry, they are intended to suggest that their commitment to the Trion project is long term, or will at least continue as planned until its scheduled FID in 2022.
This is aligned with Drouaud’s statements in his interview with MBN, in which he also made clear that the Trion project is working according to a road map that calls for a continued progression towards the FID in 2022, which includes the finalization of the infrastructure plan. “To date, we have met all our development and investment milestones and targets. Our team is fully committed to the project and fully appreciates the requirement to continuously improve the value of the investment and reach a high level of cost and schedule predictability at FID. Our plan is to continue our collaboration and engagement with our partner PEMEX and other key stakeholders in Mexico so they can support us in achieving our near- and long-term objectives. Likewise, we have collaboratively worked with our contractors to progress the engineering work in readiness for execution. I am confident and excited that we have the plans and people to deliver on our commitment, which is to deliver the first Deepwater development in Mexico.” (To read our coverage of Drouaud’s presentation of the Trion project during Mexico Oil & Gas Summit 2021, click here).