Woodside Greenlights $7.2 Billion Mexico Deepwater Oil Project

(Bloomberg) —

Woodside Energy Group Ltd. gave the go-ahead for a $7.2 billion oil field off Mexico, the Australian producer’s first major fossil fuel investment since acquiring BHP Group Ltd.’s petroleum business last year.

The Trion oil field, a joint venture with state-owned oil company Petroleos Mexicanos, will be Mexico’s first offshore deepwater oil project, according to Woodside. It has estimated resources of 479 million barrels of oil equivalent, and first production is expected in 2028, the Perth-based company said Tuesday.

Woodside, Australia’s biggest oil and gas producer, has come under intense pressure from activists and shareholders for its fossil fuel expansion plans, but has said new projects are necessary and can be consistent with global emission reduction goals. The company in February said it would review potential acquisitions in the Gulf of Mexico after reporting its highest-ever profit thanks to surging prices and the integration of BHP’s former energy unit.

“We have considered a range of oil demand forecasts and believe Trion can help satisfy the world’s energy requirements,” Chief Executive Officer Meg O’Neill said in a statement, adding two-thirds of the Trion resource was “expected to be produced within the first 10 years after start-up.”

Woodside inherited a 60% stake in Trion from BHP and will invest $4.8 billion in the project, subject to clearance from Pemex and regulatory approval expected in the fourth quarter. The field’s floating production unit will have capacity to produce 100,000 barrels of oil a day.

Woodside is also developing the vast Scarborough gas field off the coast of Western Australia and plans other oil and gas projects. It also intends to invest in clean hydrogen manufacture.

The company has been the subject of numerous shareholder resolutions from climate activists. One of its directors received the lowest support in a decade in April and 49% of shareholders rejected its climate report last year.