The Anglo-Aussie resources giant said it was doing the deal as it sees “the potential for price upside over the medium term given the global slowdown in development activity, and we are well positioned to participate in that upside”.
“We continue to believe that the fundamentals for oil and advantaged gas will be attractive for the next decade and likely beyond," it added.
Paying US$505mln to acquire Hess Corporation’s 28% working interest in the Shenzi deepwater development, the FTSE 100 group will take its working interest to 72% of the six-lease field.
The remaining 28% interest is held by Spain’s Repsol.
“This transaction aligns with our plans to enhance our petroleum portfolio by targeted acquisitions in high quality producing deepwater assets and the continued de-risking of our growth options,” said BHP’s president of petroleum operations, Geraldine Slattery.
“We are purchasing the stake in Shenzi at an attractive price, it's a tier one asset with optionality, and key to BHP's Gulf of Mexico heartland. As the operator, we have more opportunity to grow Shenzi high-margin barrels and value with an increased working interest.”
The effective date of the transaction is 1 July 2020 with an expected close before the end of the year.