At the end of June, BHP Billiton announced its approval of the capital expenditure for the company’s 35% share of development costs of the Neptune oil and gas field in the Gulf of Mexico (GoM). Woodside Energy (USA) Inc., a wholly owned subsidiary of Woodside Petroleum Ltd, has a 20% interest and announced the approval for its share of costs the next day; the project will be Woodside’s first deep water GoM oil production when it comes on line in late 2007. Neptune will have a design capacity to produce up to 50,000 bbl of oil and 50 Mcf of gas a day and the gross cost of the development is estimated at around US$850 million – BHP Billiton’s share will be approximately US$300 million.

The Neptune development production facility will be located in around 1,300 m of water. Recoverable reserves are estimated to be between 100 and 150 MMbbl of oil equivalent. “Neptune will be our first operated deep water, standalone facility in the GoM and represents a significant milestone towards building a core business in that region”, explained Group President of Energy for BHP Billiton, Philip Aiken. “This project will add to our expanding portfolio of producing assets in the Gulf of Mexico. With Mad Dog, which came onstream this year; Atlantis, which will start up in 2006; and now Neptune, BHP Billiton’s net production from the Gulf of Mexico will exceed 100,000 barrels of oil equivalent (boe) per day by the end of 2007.”

A standalone tension leg platform (TLP) has been selected for the development, and the proposed facilities, wells and completions are proven designs that have been successfully implemented in the deep water Gulf of Mexico. Seven initial subsea wells will be tied back to the TLP, and the wells, subsea systems, flowlines, floating systems, topsides and risers will de designed, procured, fabricated and operated by BHP on behalf of the Joint Venture partners. The oil and gas will be exported to shore via the existing Caesar and Cleopatra trunk lines.

The Joint Venture comprises:
BHP Billiton (35% – operator);
Marathon Oil Company (30%);
Woodside Energy (USA) Inc. (20%); and
Maxus (US) Exploration Company, a subsidiary of Repsol YPF (15%).