BHPB update on petroleum production

The successful integration of the Fayetteville shale gas assets, the start-up of the Angostura Gas Phase II project on schedule, and strong underlying performance from existing assets, delivered 159.4 million barrels of oil equivalent for the 2011 financial year, the fourth consecutive increase in annual petroleum production.

BHP Billiton brought the first new deepwater well into production since the Gulf of Mexico moratorium was enacted in May 2010 and this important milestone, achieved at the BHP Billiton operated Shenzi field (USA), followed previous regulatory approvals for water injection and production well drilling.

Underlying EBIT of USD 6.3 billion represented an increase of USD 1.8 billion or 38 per cent when compared with the prior period. Higher average realised prices were a major contributor to the increase in Underlying EBIT (USD 1.5 billion, net of price linked costs) and reflected a 28% increase in oil prices to USD 93.29 per barrel, a 22% increase in realised liquefied natural gas prices to USD 11.03 per thousand standard cubic feet, and a 17% increase in natural gas prices to USD 4.00 per thousand standard cubic feet.

BHP Billiton’s operating capability was further underscored by the success of Pyrenees although natural field decline worldwide was further impacted by the deferral of high volume wells in the Gulf of Mexico. Gross exploration spend of USD 557 million was similarly impacted, although an increase in seismic acquisition and processing partially offset the decrease in drilling activity. Recommencement of development drilling at Atlantis (USA) is still pending although a step out exploration well at Mad Dog (USA) is currently underway.

From a longer term perspective, the growth potential of the Petroleum business has been significantly enhanced by the acquisition of onshore US shale gas resources while organic growth projects, such as the Macedon gas project (Australia), continue to move through the execution phase.


Source: Steel Guru


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