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Exploration and Development Report 30 June 2013

17th Jul 2013 07:00

RNS Number : 4794J
BHP Billiton PLC
16 July 2013
 



NEWS RELEASE

Release Time

IMMEDIATE

Date

17 July 2013

Number

16/13

 

BHP BILLITON EXPLORATION AND DEVELOPMENT REPORT

FOR THE YEAR ENDED 30 JUNE 2013

 

 

This report covers the Group's exploration and development activities for the June 2013 quarter. Unless otherwise stated, BHP Billiton's interest in the projects referred to in this report is 100 per cent and references to project schedules are based on calendar years.

 

Development

 

The majority of BHP Billiton's 18 low risk, largely brownfield, major projects are scheduled to deliver first production before the end of the 2015 financial year.

 

Our Western Australia Iron Ore (WAIO) business achieved several milestones during the 2013 financial year, which included an increase in port capacity to 220 million tonnes per annum (100 per cent basis) following the successful installation of all major infrastructure associated with the WAIO Port Hedland Inner Harbour Expansion project. In addition, WAIO Orebody 24 delivered first production during the period.

 

The WAIO Jimblebar Mine Expansion, which will increase supply chain capacity to 220 million tonnes per annum (100 per cent basis), is now expected to achieve first production in the December 2013 quarter, ahead of schedule. The project is on budget in local currency, although the capital cost in US dollars is expected to be 10 per cent, or US$340 million higher than the original budget. This increase has been more than offset by a change in scope and US$400 million reduction in the budget for the WAIO Port Blending and Rail Yard Facilities project, which reflects the decision to prioritise capital efficient growth in the inner harbour. As a result, WAIO remains well positioned to deliver 220 million tonnes per annum of supply chain capacity ahead of schedule and on budget.

 

The Daunia and Broadmeadow Life Extension projects (both metallurgical coal) also delivered first production during the 2013 financial year, ahead of schedule. In addition, first coal was loaded from the Newcastle Third Port Stage 3 project (energy coal) during the June 2013 quarter. The WAIO Port Hedland Inner Harbour Expansion, WAIO Orebody 24 and Daunia projects will not be reported in future Exploration and Development Reports.

 

BHP Billiton's Onshore US drilling and development expenditure totalled US$4.8 billion in the 2013 financial year and reflected a higher working interest across several fields and an increase in drilling speed, which delivered more wells per rig and a higher rate of completion activity. Over 80 per cent of our Onshore US expenditure was directed towards the Eagle Ford and Permian, as planned. An improvement in drilling productivity is expected to facilitate a reduction in our rig count in the 2014 financial year, while a lower level of capital expenditure for Onshore US will be increasingly focused on our liquids rich acreage in the Eagle Ford.

 

BHP Billiton continued to simplify its portfolio during the period. On 20 June 2013 the Company announced an extension of its WAIO long term joint venture relationship with ITOCHU Corporation (ITOCHU) and Mitsui & Co., Ltd (Mitsui). This transaction was completed in July 2013 and has aligned interests across the WAIO supply chain. Under the terms of the agreement, ITOCHU and Mitsui invested approximately US$0.8 billion and US$0.7 billion, respectively, in shares and loans of BHP Iron Ore (Jimblebar) Pty Ltd, representing an eight per cent and seven per cent interest in the Jimblebar mining hub and resource. The consideration included a share of capital costs associated with the Jimblebar Mine Expansion project.

 

During the June 2013 quarter, BHP Billiton also completed the sale of its 8.33 per cent interest in the East Browse Joint Venture and 20 per cent interest in the West Browse Joint Venture, located offshore Western Australia, to PetroChina International Investment (Australia) Pty Ltd for US$1.63 billion plus customary purchase price adjustments.

 

Project and ownership

Share of approved capex (US$m)

Initial production target date

Production capacity (100%)

Quarterly progress

Petroleum projects

Macedon(Australia)

71.43%

Operator

Gas

1,050

CY13

200 million cubic feet gas per day.

On schedule and budget. Commissioning activities are progressing and the overall project is 99% complete.

Bass Strait Turrum(a)

(Australia)

50%

Non operator

Gas/Gas Liquids

1,350

CY13

11,000 bpd condensate and processing capacity of 200 million cubic feet gas per day.

On revised schedule and budget. The overall project is 91% complete.

Bass Strait Longford

Gas Conditioning Plant

(Australia)

50%

Non operator

Gas

520

CY16

Designed to process approximately 400 million cubic feet per day of high CO2 gas.

On schedule and budget. The overall project is 4% complete.

North West Shelf North Rankin B Gas Compression (Australia)

16.67%

Non operator

LNG

850

CY13

2,500 million cubic feet gas per day.

On budget. Commissioning activities are progressing and the overall project is 99% complete.

North West Shelf Greater Western

Flank-A

(Australia)

16.67%

Non operator

LNG

400

 

CY16

 

To maintain LNG plant throughput from the North West Shelf operations.

 

On schedule and budget. The overall project is 51% complete.

Minerals projects

Escondida Organic Growth Project 1

(Chile)

57.5%

Copper

2,207

H1 CY15

Replaces the Los Colorados concentrator with a new 152,000 tpd plant.

On schedule and budget. The overall project is 41% complete.

Escondida Oxide Leach Area Project

(Chile)

57.5%

Copper

414

H1 CY14

New dynamic leaching pad and mineral handling system. Maintains oxide leaching capacity.

On schedule and budget. The overall project is 61% complete.

WAIO Jimblebar Mine Expansion

(Australia)

96%(b)

Iron Ore

3,640(b)(c)

H2 CY13

Increases mining and processing capacity to 35 million tpa with incremental debottlenecking opportunities to 55 million tpa.

Ahead of schedule and on budget in local currency, although the capital cost in US dollars is expected to be 10% higher than the original budget. The overall project is 89% complete.

WAIO Port Hedland Inner Harbour Expansion

(Australia)

85%

Iron Ore

1,900(c)

H2 CY12

Increases total inner harbour capacity to 220 million tpa. Debottlenecking opportunities that would add substantial, low cost capacity are being evaluated.

First production was achieved in Q4 CY12. On schedule and budget. The overall project is 92% complete.

WAIO Port Blending and Rail Yard Facilities

(Australia)

85%

Iron Ore

1,000(c)(d)

H2 CY14

Optimises resource and enhances efficiency across the WAIO supply chain.

On schedule and budget on the basis of the revised scope. The overall project is 86% complete.

WAIO Orebody 24

(Australia)

85%

Iron Ore

698

H2 CY12

Maintains iron ore production output from the Newman Joint Venture operations.

First production was achieved in Q4 CY12. On schedule and budget. The overall project is 88% complete.

Samarco Fourth Pellet Plant

(Brazil)

50%

Iron Ore

1,750

H1 CY14

Increases iron ore pellet production capacity by 8.3 million tpa to 30.5 million tpa.

On schedule and budget. The overall project is 90% complete.

Daunia

(Australia)

50%

Metallurgical Coal

800

Q1 CY13

Greenfield mine development with 4.5 million tpa of export metallurgical coal capacity.

First production was achieved in Q1 CY13, ahead of schedule. Ramp-up is also progressing ahead of plan. The final capital cost is expected to be below budget. The overall project is 97% complete.

Hay Point Stage Three Expansion

(Australia)

50%

Metallurgical Coal

1,250(c)

CY14

Increases port capacity from 44 million tpa to 55 million tpa and reduces storm vulnerability.

Schedule and budget are under review. The overall project is 66% complete.

Caval Ridge

(Australia)

50%

Metallurgical Coal

1,870(c)

CY14

Greenfield mine development to produce an initial 5.5 million tpa of export metallurgical coal.

On schedule and budget. The overall project is 71% complete.

Appin Area 9

(Australia)

100%

Metallurgical Coal

845

CY16

Maintains Illawarra Coal's production capacity with a replacement mining domain and capacity to produce 3.5 million tpa of metallurgical coal.

On schedule and budget. The overall project is 44% complete.

Cerrejon P40 Project (Colombia)

33.3%

Energy Coal

437

CY13

Increases saleable thermal coal production by 8 million tpa to approximately 40 million tpa.

On schedule and budget. The overall project is 71% complete.

Newcastle Third Port Project Stage 3 (Australia)

35.5%

Energy Coal

367

Q2 CY13

Increases total coal terminal capacity from 53 million tpa to 66 million tpa.

First coal was loaded in Q2 CY13, ahead of schedule and on budget. The overall project is 76% complete.

 

Minerals exploration

Greenfield minerals exploration is focused on advancing copper targets within Chile and Peru. Minerals exploration expenditure for the 2013 financial year was US$651 million, of which US$500 million was expensed.

 

Petroleum exploration

 

Exploration and appraisal wells drilled during the quarter or in the process of drilling as at 30 June 2013.

 

Well

Location

BHP Billiton equity

Status

Raptor-1/ST-1

Gulf of Mexico

DC535

50%

(Anadarko operator)

Drilling ahead

Homevale-1

Western Australia

WA-475P

60%

(Operator)

Plugged and abandoned

Dry hole

 

Petroleum exploration expenditure for the 2013 financial year was US$675 million, of which US$522 million was expensed.

 

BHP Billiton expanded its Petroleum exploration portfolio with the signing of Production Sharing Contracts for Trinidad and Tobago's deep water Blocks 5, 6, 28 and 29.

 

(a) Initial production through the Turrum facilities, scheduled for the 2013 calendar year, will be low CO2 gas. Additional high CO2 production from the Turrum reservoir will come online with completion of the Longford Gas Conditioning Plant in the 2016 calendar year.

 

(b) Following completion of the ITOCHU and Mitsui transaction in July 2013, BHP Billiton's economic interest in the Jimblebar Mine Expansion project is now 85 per cent and our share of approved capital expenditure is reduced to US$3,220 million.

 

(c) Excludes announced pre-commitment funding.

 

(d) The construction of port blending and rail yard facilities at the South Stockyard is no longer included in the scope of the WAIO Port Blending and Rail Yard Facilities project.

 

Further information on BHP Billiton can be found at: www.bhpbilliton.com

 

Media Relations

 

Australia

 

Gabrielle Notley

Tel: +61 3 9609 3830 Mobile: +61 477 325 803

email: [email protected]

 

Fiona Hadley

Tel: +61 3 9609 2211 Mobile: +61 427 777 908

email: [email protected]

 

Eleanor Nichols

Tel: +61 3 9609 2360 Mobile: +61 407 064 748

email: [email protected]

 

United Kingdom

 

Ruban Yogarajah

Tel: +44 20 7802 4033 Mobile: +44 7827 082 022

email: [email protected]

 

Jennifer White

Tel: +44 20 7802 7462 Mobile: +44 7827 253 764

email: [email protected]

 

Americas

 

Jaryl Strong

Tel: +1 713 499 5548 Mobile: +1 281 222 6627

email: [email protected]

Investor Relations

 

Australia

 

James Agar

Tel: +61 3 9609 2222 Mobile: +61 467 807 064

email: [email protected]

 

Andrew Gunn

Tel: +61 3 9609 3575 Mobile: +61 402 087 354

email: [email protected]

 

United Kingdom and South Africa

 

Tara Dines

Tel: +44 20 7802 7113 Mobile: +44 7825 342 232

Email: [email protected]

 

Americas

 

James Agar

Tel: +61 3 9609 2222 Mobile: +61 467 807 064

email: [email protected]

 

Matt Chism

Tel: +1 71 359 96158 Mobile: +1 281 782 2238

email: [email protected]

 

 

BHP Billiton Limited ABN 49 004 028 077

Registered in Australia

Registered Office: 180 Lonsdale Street

Melbourne Victoria 3000 Australia

Tel +61 1300 55 4757 Fax +61 3 9609 3015

 

 

BHP Billiton Plc Registration number 3196209

Registered in England and Wales

Registered Office: Neathouse Place

London SW1V 1BH United Kingdom

Tel +44 20 7802 4000 Fax +44 20 7802 4111

 

Members of the BHP Billiton Group which is headquartered in Australia

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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