BHP Billiton, with co-venturers Hess Corporation and Repsol YPF, announced today the purchase of the Genghis Khan oil and gas development from Anadarko Petroleum Corporation. The transaction includes rights for Green Canyon Blocks 652 and 608 (certain rights only) in the deepwater Gulf of Mexico. The Genghis Khan field already has two wells and development infrastructure in place. The field is part of the same geological structure as the recently sanctioned Shenzi project. Gross costs for the transaction are US$1.35 billion, with the net share to BHP Billiton at US$594 million.
The sale will close following due diligence by the purchasers, resolution of production handling agreements and other conditions, as well as any subsequent government approvals that may be necessary.
Genghis Khan was discovered in 2005 on GC 652 and includes estimated gross hydrocarbon reserves in the range from 65 to 170 million barrels of oil equivalent.It is located in water depths of approximately 4,300 feet. The field is located within 3 miles of the Marco Polo production platform, and development of the reserves at Genghis Khan will proceed through the connection of subsea wells where the pipeline infrastructure is already in place. Development may include up to seven wells to fully produce recoverable reserves from the field. First oil is expected in the middle of calendar year 2007 with continued drilling to follow.
"The acquisition of Genghis Khan provides BHP Billiton with a significant undeveloped asset in the deepwater Gulf of Mexico with near-term production that we will operate,” explained J. Michael Yeager, Group President Energy for BHP Billiton. "Additionally, Genghis Khan being adjacent to our Shenzi oil and gas field will allow us to benefit from developmental synergies, and will give us knowledge that will enhance the Shenzi development when it comes on-stream in 2009."
BHP Billiton holds a 44 percent interest and is the operator of the Shenzi development. Hess Corporation and Repsol YPF each hold a 28 percent interest. Ownership and operating interests in Genghis Khan will be the same as Shenzi once the transaction is completed. As one of the largest leaseholders in the Gulf of Mexico, BHP Billiton holds interests in more than 400 blocks.
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