The development, which is estimated to cost $US4.4 billion ($A5.93 billion) and continue through 2015, will have a design capacity to produce up to 100,000 barrels of oil and 50 million cubic feet of gas per day.

Shenzi-1 was drilled in 2002 by the CR Luigs drillship.

The Shenzi field, made up of Green Canyon blocks 609, 610, 653 and 654 with water depths of about 4300 feet (1311m), is expected to have up to 15 producing wells and possible water injection.

During development drilling, recoverable reserves covered by approved expenditure will be assessed further with current estimations at 350-400 million bbl of oil equivalent.

Group president energy J Michael Yeager said Shenzi would be BHPB’s second operated, deepwater stand-alone facility in the Gulf of Mexico.

“This project further demonstrates our transition to becoming a significant operator and producer in the deepwater Gulf of Mexico. Shenzi joins the development of the Neptune field as a BHP Billiton-operated project, and together with our interests in Atlantis and Mad Dog, significantly expands our production base in the region,” he said.

BHPB expects first oil from the company’s seven initial pre-drilled subsea production wells by mid 2009.

Interests in the Shenzi oil and gas field are BHPB, (44%), BP (28%) and Hess (28%).