BHP Billiton has paid $773 million for a stake in the Gulf of Mexico Genghis Khan field, with estimated gross hydrocarbon reserves of 65 – 170 MMboe, in water depths of about 1,311 m.

BHP Billiton, with joint venture partners Hess Corporation and Repsol YPF, paid a combined $1.76 billion for the oil and gas development from Anadarko Petroleum Corporation. The transaction includes rights for Green Canyon Blocks 652 and 608.

BHP Billiton Group Energy President, J. Michael Yeager, said the Genghis Khan field was discovered in 2005 on GC 652 and already has two wells and development infrastructure in place. “The field is part of the same geological structure as the recently sanctioned Shenzi project”, he said.

“The acquisition of Genghis Khan provides BHP Billiton with a significant undeveloped asset in the deep water Gulf of Mexico with near-term production that we will operate. 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% interest and is the operator of the Shenzi development. Hess Corporation and Repsol YPF each hold a 28% interest. 

“Development may include up to seven wells to fully produce recoverable reserves from the field”, he said. “First oil is expected in the middle of calendar year 2007 with continued drilling to follow. The field is located within 5 km 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.”

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.

Yeager said 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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The $773 million acquisition of the Genghis Khan filed, discovered in 2005, provides BHP Billiton with a significant undeveloped asset with near-term production that it will operate.