Woodside Energy is moving ahead with a $US7.2 billion ($A10.6b) plan to develop a large deepwater oil field in the Gulf of Mexico.
It will be the company's first major investment since acquiring BHP's petroleum assets last year, and one that is drawing criticism from environmental groups.
Woodside said on Tuesday that the Trion project, a joint venture with Mexican state-owned oil company Pemex, would target the delivery of 479 million barrels of oil and gas, two-thirds within the decade after start-up.
"There are not a lot of undeveloped resources the size of Trion with the credentials of this development," Woodside CEO Meg O'Neill told analysts on a conference call.
"It is a large, high-quality resource which has been well appraised."
The oil field 180km off the Mexican coastline was discovered in 2012 by Pemex.
BHP Petroleum acquired a 60 per cent stake in the project in 2017, that in turn went to Woodside last year.
Woodside said Trion would deliver an internal rate of return of more than 16 per cent, with a payback period of less than four years, assuming oil prices rise about two per cent a year from last year's average of $US70 a barrel.
Located at a depth of 2500 metres, it will be among Mexico's first deepwater developments, with first oil targeted for 2028.
Eighteen sub-sea wells would be drilled in the initial phase: nine for oil production, seven for water injection, and two for gas injection, with a total of 24 wells drilled over the life of the project.
The wells would be connected to a floating production unit capable of producing 100,000 barrels a day, which in turn would connect to a huge "suezmax" floating storage and offloading vessel capable of storing 950,000 barrels of oil.
Ms O'Neill said the fossil-fuel project would produce less carbon emissions than the global deepwater oil average, and would be subject to Woodside's emissions reduction targets.
"Demand for oil is expected to continue across a range of climate pathways to 2050, including the net zero emissions scenario," she said.
"Under these pathways, global oil supply will not meet future demand without additional investment."
Ms O'Neill said it would also generate jobs, taxation revenue and social benefits for Mexico.
But Alex Hillman, lead analyst at the Australasian Centre for Corporate Responsibility, said the project would be a "carbon emissions bomb" that would increase Woodside's emissions by 14 per cent.
"The approval to proceed with Trion is glaring evidence that the board of Woodside has no credible transition strategy and is failing to comprehend the economic risks of the energy transition by throwing billions of investor dollars into a flawed oil project," he said.
Mr Hillman said the case for Trion was based on risky assumptions, including that oil prices are 20 per cent above the current June 2028 futures price.
Will van de Pol, acting CEO of activist group Market Forces, said the decision represented a multibillion-dollar bet against the climate goals of the Paris Agreement.
"Woodside is showing a complete disregard for investor demands to align with global climate goals, and investors must respond by withdrawing capital from this climate-wrecking company," he said.
The project is still subject to sign-off from Pemex, which holds a 40 per cent stake, as well as approval from Mexico's National Hydrocarbons Commission, or CNH.
Ms O'Neill said the joint venture had already been working closely with CNH, which had allowed it to drill a number of appraisal wells, and felt confident enough about receiving approvals that it was issuing limited notice to proceed to its main contractors.
At 2.34pm, Woodside shares were up 2.4 per cent to $36.36.
