BHP Group BHP recently announced the signing of an agreement with Hess Corporation to acquire the latter’s 28% interest in Shenzi oil and gas field located in the Gulf of Mexico for $505 million. This move is in sync with the company’s plans to augment its petroleum portfolio through targeted acquisitions in high-quality deepwater assets and the continued de-risking of growth options.

Currently, Shenzi is structured as a joint ownership with BHP being the operator with a 44% interest, Hess holding 28% and Spain’s Repsol S.A. the remaining 28%. Following the completion of the deal, expected by the end of December, BHP Group’s stake will go up to 72% and add approximately 11,000 barrels of oil equivalent per day to production (90% oil).

The Shenzi facility is located approximately 120 miles (195 kilometres) off the Louisiana coastline and is installed in approximately 4,300 feet (1,300 metres) of water on Green Canyon Block 653, making it the second deepest tension leg platform (TLP) in the world. The overall field comprises four blocks: Green Canyon 609, 610, 653 and 654.

Notably, the Shenzi project accounted for 7% of the Petroleum Group’s revenues in fiscal 2020. With the completion of the current deal, this proportion will go up in the future. For fiscal 2020, BHP Group’s underlying attributable profit from continuing operations was $9.06 billion in fiscal 2020, down 4% from $9.47 billion in fiscal 2019 as gains from favorable exchange rate movements, improved productivity and lower unit costs were offset by reduced commodity prices and volumes.

Despite the volatility in oil prices this year, the company believes that the fundamentals of oil and advantaged gas will remain strong over the next decade and beyond. While demand will continue to rise, the industry is subject to a decline rates of at least 3%

SAO PAULO (Reuters) – Brazilian federal and state prosecutors have asked a court to re-open a multi-billion-dollar civil action lawsuit against miners Samarco, Vale SA and BHP for damages caused by the Fundao dam burst in 2015, authorities said on Thursday.

The incident at Samarco’s Mariana facilities, a joint venture between Vale and BHP, which left 19 dead and polluted the River Doce, was Brazil’s biggest ever environmental disaster. The claim is for damages of 155 billion reais ($27.4 billion).

The suit had been suspended in 2018 after an agreement between prosecutors and the companies. But in the Thursday statement, state prosecutors in Minas Gerais, where Mariana is located, alleged that the companies were not meeting their obligations in a timely fashion.

In a joint statement, Vale, Samarco and BHP said they were surprised by prosecutors’ decision to attempt to re-open the suit, and said they vehemently disagreed with the assertion that they were not complying with their obligations promptly. They said the existing agreement allowed for full reparations for all parties affected by the dam break.

Another mining dam owned by Vale burst in Minas Gerais in 2019, an incident which killed 270 people and sparked a series of criminal and civil suits.

Earlier on Thursday, Vale said that 33 of its 104 dam structures in Brazil had failed their stability assessments.

(Reporting by Luciano Costa; Writing and additional reporting by Gram Slattery in Rio de Janeiro; Editing by Franklin Paul, Andrea Ricci and Leslie Adler)

Copyright 2020 Thomson Reuters.

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