The deal is subject final negotiating and execution of a production-sharing contract, which is expected within months, with first wells in Block J likely to be drilled within 12 months. This is the first time Brunei has allowed exploration activities in its deepwater acreage and the block was one of only two deepwater sites offered by Brunei last year.

Last week BHP Billiton announced it would commit up to $US335 million to develop its 'Mad Dog' field in the Gulf of Mexico. The resource giant announced this week it would spend a further $US100 million on taking equity positions in two pipelines that will deliver hydrocarbons from its ultra-deepwater fields in the Gulf of Mexico.

Analysts said the moves by BHP Billiton are part of a bid by the company to secure medium to long term growth in oil and gas production by pursuing a high-margin exploration strategy.