BHP share price: Group searches for new opportunities in Mexico

on Sep 4, 2014
Updated: Apr 9, 2020
Listen, Thursday, September 4: BHP Billiton PLC (LON:BLT) is considering joining the bidding to develop Mexico’s deep-water oil fields next year, Bloomberg has reported.

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Mexico is planning to put an end to the 76-year state oil monopoly in the country by opening its energy industry to foreign companies in 2015.
As of 13:06 BST, BHP’s share price had added 0.26 percent to 1,896.00p.
**BHP to seek oil in Mexican waters**
Tim Cutt, president of BHP’s petroleum and potash division, told Bloomberg in an interview on Tuesday, that the world’s largest mining group by market capitalisation was planning to participate in the bidding for the rights to drill for oil in Mexico.

During its meetings with Mexican authorities and state-owned group Petroleos Mexicanos, known as Pemex, the group has gathered data in order to assess the opportunities. Cutt said the company was interested in Mexico’s oil resources, adding that as one of “the lowest-cost and best drillers in the deep-water Gulf of Mexico” the group could be more effective in building projects than most of its rivals.

BHP is currently operating two platforms in the Gulf of Mexico and has a stake in production from three others, producing the equivalent of about 100,000 barrels of oil a day, Bloomberg noted. A potential move into Mexican waters would expand its interests in the region.
The country will open up its energy industry to foreign companies next year with an auction for 169 blocks, 28 of which will be in deep waters. According to data from the Mexican ministry, cited by the website, the deep-water resources amount to a prospective 4.8 billion barrels of crude equivalent.

“BHP Billiton is a very large and established oil and gas operator,” commented Pavel Molchanov, an analyst for Raymond James in Houston, as quoted by Bloomberg. “It has shale experience now, but traditionally it had a skill set in deep water.”
“We are happy to work with Pemex and share some of our technology advancements within those plays,” Cutt said, noting that the firm had some capacity that could be offered up quickly.

**BHP focuses on energy**
In a separate development, BHP Billiton’s chief executive Andrew Mackenzie said, as quoted by the Australian today, that the company’s future investments would be ¬focused on energy in particular, as the big investment spend in Australian iron ore and coal was already done. At present, the company is concentrating its efforts on its US ¬onshore and offshore oil and gas projects, he added.
“The bigger investment will be energy, and the issue with energy is we need diversification within the energy space because the world hasn’t got a magic or clear pathway through to the energy supply of the future,” he said.
The Australian mining company announced in August that it was focusing on its four pillars – petroleum, iron ore, copper and coal, which would allow the group to “more quickly improve the productivity and performance of our largest businesses”. The FTSE 100-listed miner also revealed its decision to create a new independent company by demerging non-core assets, including some of its aluminium, coal, manganese, nickel and silver operations. BHP share price: London IPO too expensive for miner’s new business
**As of 13:04 BST, buy BHP shares at 1,896.00p.**
**As of 13:04 BST, sell BHP shares at 1,895.00p.**


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