25th Jan 2007 07:00
BHP Billiton PLC25 January 2007 25 January 2007Number 02/07 BHP BILLITON QUARTERLY REPORT ON EXPLORATION AND DEVELOPMENT ACTIVITIES QUARTER ENDED 31 DECEMBER 2006 This report covers the company's exploration and development activities for thequarter ended 31 December 2006. Unless otherwise stated, BHP Billiton's interestin the projects referred to in this report is 100 per cent and references toproject schedules are based on calendar years. DEVELOPMENT While the majority of BHP Billiton's projects remain broadly on schedule, tightlabour markets and shortages of equipment and supplies continue to be evidentacross the resources industry globally and will continue to impact project costsand schedules. The Spence (Chile) copper project was commissioned during the quarter andachieved first production in early December three weeks ahead of schedule. Thebudget is subject to finalisation but is expected to be within the approvedbudget (excluding FX impacts). In addition, the Board approved the increased capital costs for the Ravensthorpe(Australia) nickel project to a total budget of US$2.2 billion. Lower thanexpected labour productivity and late delivery of some materials and equipmentat Ravensthorpe means that the target date for first metal from Ravensthorpe isnow the first quarter of calendar year 2008. PROJECT AND OWNERSHIP SHARE OF INITIAL PRODUCTION QUARTERLY PROGRESS APPROVED CAPEX PRODUCTION TARGET CAPACITY (100%) US$M DATEMinerals ProjectsAlumar - Refinery 725 Q2 CY09 2 million tpa Forecast costs have increased by 40%Expansion (Brazil) following BHP Billiton's review of the36 % capital cost estimate and the inclusionAlumina of additional contingencies. Cost pressures are due to increases in construction, electrical, instrumentation and labour costs and general overheads. As a result the project schedule is experiencing delays and we expect commissioning to occur in the second quarter of CY09.PROJECT AND OWNERSHIP SHARE OF INITIAL PRODUCTION QUARTERLY PROGRESS APPROVED CAPEX PRODUCTION TARGET CAPACITY (100%) US$M DATESpence (Chile) 100% 990 Q4 CY06 200,000 tpa copper Completed three weeks ahead of schedule.Copper cathode Budget is subject to finalisation but is expected to be within the approved budget (excluding FX impacts).Western Australia Iron 1,300 Q4 CY07 20 million tpa On schedule and budget. Engineering andOre (Australia) -RGP3 procurement activities were essentially85% completed during the quarter withIron Ore construction activities now 35% complete.Samarco Third Pellet 590 1H CY08 7.6 million tpa On schedule and budget. First steel wasPlant (Brazil) erected at the Pellet Plant at Ubu and50% 50% of the pipe for the pipeline has beenIron Ore installed. Overall the project is 49% complete.Koala Underground 200 End CY07 3,300 tonnes per On schedule and budget. Procurement is(Canada) day ore processed well advanced and engineering is nearly80% complete.DiamondsRavensthorpe (Australia) 2,200 Q1 CY08 Up to 50,000 tpa On revised schedule and budget.100% contained nickel Construction is approximately 78%Nickel in concentrate complete with engineering and procurement activities finalised during the quarter.Yabulu (Australia) 556 Q1 CY08 45,000 tpa nickel On schedule however the budget has been100% revised. Expansion was essentiallyNickel mechanically complete at the end of December 2006. Petroleum Projects Atlantis South (US) 1,500 Under review, 200,000 barrels of Cost and schedule remain under review but44% forecast 2H CY07 oil and 180 we estimate a capital cost ofOil/Gas million cubic feet approximately US$1.5 billion to plateau of gas per day production from 11 wells compared to the previous estimate of approximately US$1 billion, a 50% increase. Development costs from plateau production for the full life of the field remain subject to finalisation. Six development wells have been drilled with five being completed at the end of December. The Balder installation vessel is undergoing repair as publicly reported by Heerema.North West Shelf Train 300 Late CY08 LNG processing On schedule and revised budget as advised5(Australia) capacity of 4.2 by the Operator. Preassembled units from16.67% million tpa the construction site in Indonesia haveLNG begun arriving on site. The major mechanical erection contractor is on site and has begun work.Neptune (US) 300 End CY07 50,000 barrels of On schedule however the project is35% oil and 50 million experiencing some cost pressure. DrillingOil/Gas cubic feet gas per was completed for the first two of the day seven development wells.Stybarrow 300 Q1 CY08 80,000 barrels of On schedule however the project is(Australia) oil per day experiencing some cost pressure. Two50% injection wells were successfullyOil/Gas completed and three development wells have been drilled. The FPSO has completed sea trials.North West Shelf Angel 200 End CY08 800 million cubic On budget and schedule. Fabrication of(Australia) feet gas per day topsides and the jacket are progressing16.67% to plan. All major contracts have nowOil/Gas been let.Shenzi (US) 1,940 Mid CY09 100,000 barrels of On budget and schedule. Drilling of the44% oil and 50 million first development well was completed andOil/Gas cubic feet gas per fabrication of the topsides and hull day continued. MINERALS EXPLORATION BHP Billiton continued to pursue global exploration opportunities for keycommodities of interest utilising both in-house capabilities and the JuniorAlliance Programme. Grassroots exploration continued on diamond targets in Angola, Canada and theDemocratic Republic of Congo (DRC), on copper targets in Mexico, Chile, Mongoliaand the DRC; and on nickel targets in Australia, Russia and Africa. Explorationfor iron ore, coal, potash and bauxite was undertaken in a number of regionsincluding Australia, Brazil, Canada and West Africa. For the half year ended 31 December 2006, BHP Billiton spent US$153 million onminerals exploration, of which US$111 million was expensed. Capitalisedexploration included US$41 million for the Olympic Dam Expansion. PETROLEUM EXPLORATION Exploration and appraisal wells drilled during the quarter or in the process ofdrilling as at 31 December 2006. WELL LOCATION BHP BILLITON EQUITY STATUS Persephone-1 Dampier sub-basin 16.67% BHP Billiton; Hydrocarbons encountered. Western Australia Woodside operator More appraisal required. WA-1-L Plugged and Abandoned. Shenzi-6 Gulf of Mexico, 44% BHP Billiton Drilling ahead. Green Canyon and operator Block 609 Ruby-1 Trinidad and Tobago, 25.5% BHP Billiton Temporarily abandoned. Block 3 (a) and operator Encountered approximately 1,200 feet TVD (gross) of hydrocarbon-bearing sands with more than 800 TVD feet of net pay. The well tested at a rate of nearly 5,000 barrels of oil per day through a 7/8th-inch choke. See news release dated 2 November 2006. Ruby-2 Trinidad and Tobago, 25.5% BHP Billiton Drilling ahead. Block 3 (a) and operator Torosa-1 Browse Basin 8.33% BHP Billiton, Hydrocarbons encountered. Western Australia Woodside operator More appraisal required. WAR Plugged and Abandoned. Torosa-3 Browse Basin 8.33% BHP Billiton, Hydrocarbons encountered. Western Australia Woodside operator More appraisal required. WAR Plugged and Abandoned. Petroleum exploration expenditure for the half year ended 31 December 2006 wasUS$159 million. The amount expensed was US$154 million including US$43 millionof exploration expenditure previously capitalised. Further information on BHP Billiton can be found on our Internet site:www.bhpbilliton.com Australia United KingdomSamantha Evans, Media Relations Mark Lidiard, Investor & Media RelationsTel: +61 3 9609 2898 Mobile: +61 400 693 915 Tel: +44 20 7802 4156 Mobile: +44 7769 934 942email: [email protected] email: [email protected] Jane Belcher, Investor Relations Illtud Harri, Media RelationsTel: +61 3 9609 3952 Mobile: +61 417 031 653 Tel: +44 20 7802 4195 Mobile: +44 7920 237 246email: [email protected] email: [email protected] United States South AfricaTracey Whitehead, Investor & Media Relations Ivan Arriagada, Investor RelationsTel: US +1 713 599 6100 or UK +44 20 7802 4031 Tel: SA +27 11 376 2121 or UK +44 20 7802 4183Mobile: +44 7917 648 093 Mobile: +44 7769 936 227email: [email protected] email: [email protected] BHP Billiton Limited ABN 49 004 028 077 BHP Billiton Plc Registration number 3196209Registered in Australia Registered in England and WalesRegistered Office: Level 27, 180 Lonsdale Street Melbourne Registered Office: Neathouse Place London SW1V 1BH UnitedVictoria 3000 KingdomTelephone +61 1300 554 757 Facsimile +61 3 9609 3015 Telephone +44 20 7802 4000 Facsimile +44 20 7802 4111 The BHP Billiton Group is headquartered in Australia This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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