Woodside says Trion deepwater project 10% complete, confident in Pemex

Australian energy firm Woodside said Tuesday that development of its deepwater Trion field is 10% complete and it is confident that Mexican partner Pemex will pay its fair share of costs.

Trion is Mexico's first deepwater oil field. Woodside is the operator and has a 60% stake.

National oil company Pemex, which has the remaining 40%, discovered the field in 2012. It sold down its stake in 2016, in the first farmout deal in the Mexican oil industry. Trion has been held up as a possible model for the future development of Mexico's oil and gas resources.

Cash-strapped Pemex is laboring under a debt burden of nearly US$100 billion and has become known for paying suppliers and other business partners late. 

Developing Trion will cost US$7.2bn. This year Woodside is paying Pemex's share of US$460 million under a "carry" agreement for development costs incurred in 2024.

From 2025, Woodside will fund 60% of development costs and Pemex 40%.

In a conference call on H1 earnings, CEO Meg O'Neill said that Woodside has a constructive working relationship with Pemex.

"They do have financial challenges, and that's part of why the Trion contract was structured with a carry," said O'Neill.

"We've worked very closely with both Pemex and the government to ensure there's clarity around Pemex’s needs to pay their fair way starting in 2025," she said. "We've received all assurances from the government and Pemex that they will do so."

Woodside expects to produce first oil from Trion in 2028. The field contains an estimated 479Mboe (million barrels of oil equivalent) and will produce up to 100,000b/d for international markets.

In its earnings release, Woodside said its engineering contractor at Trion has started procuring equipment. HD Hyundai Heavy Industries is the project's main contractor. The manufacturing of subsea equipment has also begun.

On Monday, Mexico’s president-elect Claudia Sheinbaum appointed Victor Rodríguez Padilla as CEO of Pemex, effective October 1.