2nd UPDATE:Anadarko, Exxon To Develop Lucius Field In Offshore Gulf Of Mexico

Anadarko Petroleum Corp. (APC) said Monday it finalized an agreement with Exxon Mobil Corp. (XOM) to jointly develop the Lucius field in the deepwater Gulf of Mexico.

The project would bring the two oil producers together in an oil field where they are close neighbors. Exxon Mobil, the world's largest publicly traded oil company, in June unveiled three oil and gas discoveries located a few miles from Anadarko's Lucius discovery, which the independent company announced in 2009. Exxon's find included the oil-rich Hadrian North prospect.

Anadarko said it will take a 35% working interest in the unit, which will extend to four blocks in the Keathley Canyon field about 250 miles southwest of New Orleans. Anadarko has already placed an order for a floating production facility that it says will have capacity of 80,000 barrels of oil a day and 450 million cubic feet of natural gas a day.

"We expect Lucius to be among the most economically efficient projects in our portfolio," Anadarko chief operating officer Al Walker said in a statement.

Lucius is estimated to contain more than 300 million barrels of oil equivalent. Oil quality tests revealed the crude to be high-quality, with an API gravity of 29 degrees, Anadarko said.

Exxon will take a 15% working interest in Lucius. Other partners include Plains Exploration & Production Co. (PXP) with 23.3%; Apache Corp. (APA) subsidiary Apache Deepwater LLC with 11.7%; Petrobras with 9.6% and Eni Petroleum with 5.4%.

The partners also agreed to process gas from the Hadrian South field in return for fees and facility-upgrade reimbursements, Anadarko said. Analysts at Simmons & Co. estimated that would result in about $100 million a year, enough to cover most of Lucius' operating costs.

Anadarko wouldn't comment on the amount it expected for handling Hadrian gas, but Anadarko spokesman John Christiansen said the processing agreement "certainly enhanced" the deal.

"That's a big reason why it's an attractive deal," Christiansen said.

Although the deal means that Hadrian South will most likely share Lucius' expected startup date of 2014, Exxon said it is still studying the Hadrian North field.

"ExxonMobil is continuing development planning and engineering studies to define optimal development for the Hadrian North discovery," said Exxon spokeswoman Margaret Ross.

Ben Lefebvre, Dow Jones Newswires; 713-547-9201, ben.lefebvre@dowjones.com

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