Australia’s BHP Billiton on Monday was named the first deepwater partner ever for Mexico’s state-owned Petroleos Mexicanos (Pemex), winning the right to jointly explore two blocks in the prolific Perdido Fold Belt. Mexico also awarded the rights to explore other Perdido and Salina del Istmo Basin blocks, which all together may hold total reserves of 10.6 billion boe.

BHP outbid BP plc for the right to partner with Pemex in the Trion field. BHP bid $624 million to capture a 60% interest in the field, which is less than 50 miles from the U.S.-Mexico maritime border. Pemex is retaining a 40% interest in the blocks, which are estimated to have gross recoverable resource of 485 million boe.

The Trion 1 discovery well in 2012, drilled in 8,250 feet of water about 24 miles south of the maritime border, was estimated four years ago to hold 250-400 million boe of proven, probable and possible reserves. Pemex at the time considered the field to be one of the top 10 discoveries in the entire GOM.

“This is a transcendental step that turns Pemex into a 21st Century company,” said Mexico Energy Minister Pedro Joaquin Coldwell.

Mexico’s National Hydrocarbons Commission also offered four other deepwater blocks for tender in the Perdido, all of which were awarded. Blocks also were auctioned in the largely unexplored Salina del Istmo Basin.

The Trion was considered the biggest get, with 10 bidders alone lined up to make an offer; BP’s was $604 million. The field could be producing 120,000 boe/d by 2025, according to Pemex. Subject to government approval, the agreements with BHP should be finalized within three months, although commercial production is not likely before 2022.

The auction is the fourth since Mexico opened its oil and natural gas industry to private investment in 2013, and the first for deepwater reserves. Pemex auctioned some shallow water assets last summer and it has auctioned onshore leases, but overall, the earlier auctions were considered underwhelming.

BHP, already a big player in the U.S. GOM deepwater as a partner and as operator of Shenzi and Neptune offshore Louisiana, sees the “attractive potential in Trion and the Perdido trend…a prospective frontier area of the deepwater Gulf of Mexico,” said BHP’s Steve Pastor, president of petroleum operations. “This opportunity aligns with our strategy of owning and operating Tier-1 assets and provides an opportunity for BHP Billiton to leverage its industry leading deepwater drilling, development and operational expertise to create value in Mexico.”

Under terms of the bid, BHP agreed to pay $62.4 million upfront and commit to a minimum work program estimated to be worth up to $320 million. If the partners agree to progress beyond the initial program, BHP agreed to invest the remainder of the spend, which includes the upfront cash payment and the balance as a future carry for Pemex. BHP also committed to an additional royalty of 4%.

The 500-square-mile Trion field is between five other blocks that straddle the Perdido, a formation within the prolific Lower Tertiary Trend that has been successfully tapped for years in the U.S. GOM. Royal Dutch Shell plc operates the Perdido Development, which is capable of annually producing more than 200 MMcf/d of natural gas and 100,000 b/d of oil.

Also in the Perdido, China National Offshore Oil Corp. was awarded Blocks 1 and 4, while a consortium of ExxonMobil Corp. and Total SA units was awarded Block 2. A group formed by Chevron Corp., Pemex and Japan’s Inpex Corp. was awarded Block 3.

In the Salina, a consortium composed of units of BP, Statoil ASA and Total SA was awarded Block 1, a 919 square-mile area that may contain 1.852 billion boe. The trio together also was awarded Block 3, an estimated 1,269 square-mile area, which is estimated to hold 1.669 billion boe. The second block was declared void as none of the participants made an offer.

Initially, 26 bidders made up of consortiums and individual producers pre-qualified for the auction, with a total of 17 companies, many that partnered, qualified to bid.