11th Nov 2019 05:59
(Alliance News) - Miner BHP Group PLC on Monday expressed optimism for its growing Petroleum unit, outlining several major growth projects in the years to come.
BHP, which is listed in London, Sydney, New York, and Johannesburg, has multi-commodity assets in Australia, particularly iron ore, as well as copper, iron ore, and coal mines in South America.
However, it also has owned oil and gas assets since the 1960s, with producing assets in the Gulf of Mexico, Australia, Trinidad & Tobago, and Algeria, as well as exploration projects across the Americas.
In the year to June, the Petroleum unit made up 13% of revenue and 16% of underlying Ebitda.
Speaking to investors in Sydney, BHP's Geraldine Slattery, president of Petroleum, said the unit has delivered strong financial performance "over many years" and this is set to continue.
"Our portfolio of quality assets and pipeline of competitive growth options are expected to generate strong free cash flow and returns through the 2020s and beyond, she added.
BHP is targeting "robust" Ebitda margins of over 60% for the unit and a return on capital employed of more than 15% over the next 10 years.
It is also looking at an internal rate of return of 25% for all major projects, with volume growth of 3% per year until 2030.
For BHP's current financial year, ending June 2020, the firm is looking at production of 110 million to 116 million barrels of oil equivalent, and average 100 million barrels in the medium-term.
Current growth options include the Scarborough gas project in Western Australia, Wildling Phase I and Trion in the Gulf of Mexico, and Trinidad & Tobago North.
Just over a year ago, BHP sold nearly USD11 billion worth of assets in the US onshore shale region, mostly to oil major BP PLC.
Shares closed 0.3% lower in Sydney on Monday at a price of AUD37.18.
By George Collard; [email protected]
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