With Gulf of Mexico (GOM) activity accelerating, Australia’s BHP has given the green light to Shenzi North, a deepwater project it shares with Repsol SA.

BHP earmarked $544 million in capital expenditures (capex) for the project. The operator took over as majority owner last year and holds a 72% stake. Repsol SA, with a 28% interest, is expected to make a final investment decision later this year.

Shenzi North offers a “nominal” internal rate of return of more than 35%, BHP noted, with a breakeven oil price of around $25/bbl. Payback is estimated in less than two years.

“Shenzi North represents the first development phase of Greater Wildling, following exploration success in 2017,” management noted. “The project will take advantage of existing infrastructure and...