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BHP Group Limited — Interim / Quarterly Report 2012
Apr 17, 2012
14787_rns_2012-04-17_06f383fa-477c-40ee-a825-bbe1a1847c27.pdf
Interim / Quarterly Report
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NEWS RELEASE
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IMMEDIATE
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Date 18 April 2012 Number 11/12
Number
BHP BILLITON EXPLORATION AND DEVELOPMENT REPORT FOR THE QUARTER ENDED 31 MARCH 2012
This report covers the Group’s exploration and development activities for the March 2012 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
BHP Billiton’s commitment to developing its portfolio of high return growth projects, diversified by commodity, geography and market was further reinforced by the approval of additional investment in its world class Base Metals, Iron Ore and Petroleum businesses.
During the March 2012 quarter, BHP Billiton announced approval of the US$2.2 billion (BHP Billiton share) Escondida Organic Growth Project 1 (OGP1) which involves the replacement of an existing concentrator and allows access to valuable, higher grade ore. BHP Billiton also approved the US$414 million (BHP Billiton share) Escondida Oxide Leach Area Project (OLAP).
In addition, pre-commitment expenditure of US$779 million (BHP Billiton share) for the proposed Western Australia Iron Ore (WAIO) Outer Harbour development was approved. This funding will enable feasibility studies to progress, the procurement of long lead time items and for dredging to begin, subject to the necessary regulatory approvals.
On 11 April 2012, BHP Billiton also approved pre-commitment funding of US$708 million (BHP Billiton share) for the Mad Dog Phase 2 project in the deepwater Gulf of Mexico which will facilitate detailed engineering and the procurement of long lead time items related to the hull, topsides and subsea equipment.
The Worsley Efficiency & Growth project will no longer be reported in future Exploration and Development Reports as it achieved first production in the March 2012 quarter and is 98 per cent complete.
BHP Billiton’s Onshore US drilling and development expenditure totalled US$2.2 billion for the nine months ended March 2012.
| Project and ownership Share of approved capex(US$m) Initial production target date Production capacity (100%) |
Quarterly progress |
|---|---|
| Petroleumprojects | |
| Macedon (Australia) 71.43% Gas 1,050 CY13 200 million cubic feet gas per day. |
On schedule and budget. The overall project is 57% complete. |
| Project and ownership Share of approved capex(US$m) Initial production target date Production capacity (100%) |
Quarterly progress |
|---|---|
| Bass Strait Kipper (Australia) 32.5% - 50% Gas/Gas Liquids 900 CY12(a) 10,000 bpd condensate and processing capacity of 80 million cubic feet gasper day. |
On revised schedule and budget. The overall project is 92% complete. |
| Bass Strait Turrum (Australia) 50% Gas/Gas Liquids 1,350 CY13 11,000 bpd condensate and processing capacity of 200 million cubic feet gasper day. |
On revised schedule and budget. The overall project is 78% complete. |
| North West Shelf North Rankin B Gas Compression (Australia) 16.67% LNG 850 CY13 2,500 million cubic feet gas per day. |
On budget. Steady state production remains on track for CY13. The overall project is 87% complete. |
| North West Shelf Greater Western Flank-A (Australia) 16.67% LNG 400 CY16 To maintain LNG plant throughput from the North West Shelf operations. |
On schedule and budget. The overall project is 9% complete. |
| Mineralsprojects | |
| Worsley Efficiency & Growth (Australia) 86% Alumina 2,995 Q1 CY12 1.1 million tpa of additional alumina. |
First production was achieved in Q1 CY12 and ramp up is underway. The overall project is 98% complete. |
| Antamina Expansion (Peru) 33.75% Copper 435 Q1 CY12 Increases ore processing capacity to 130,000 tpd. |
Commissioning of the SAG mill and first production was achieved in Q1 CY12. The overall project is 90% complete. |
| Escondida Ore Access (Chile) 57.5% Copper 319 Q2 CY12 The relocation of the in-pit crushing and conveyor infrastructure provides access to higher grade ore. |
On schedule and budget. The overall project is 85% complete. |
| 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. |
Approval announced. See News Release dated 14 February 2012. |
| Escondida Oxide Leach Area Project (Chile) 57.5% Copper 414 H1 CY14 New dynamic leaching pad and mineral handling system. Maintains oxide leaching capacity. |
Approval announced. See News Release dated 14 February 2012. |
| EKATI Misery Open Pit Project (Canada) 80% Diamonds 323 CY15 Project consists of a pushback of the existing Misery open pit which was mined from 2001 to 2005. |
On schedule and budget. The overall project is 22% complete. |
BHP Billiton Exploration and Development Report for the quarter ended 31 March 2012
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| Project and ownership Share of approved capex(US$m) Initial production target date Production capacity (100%) |
Quarterly progress |
|---|---|
| WAIO Jimblebar Mine Expansion (Australia) 96% Iron Ore 3,300(b) Q1 CY14 Increases mining and processing capacity to 35 million tpa with incremental debottlenecking opportunities to 55 million tpa. |
On schedule and budget. The overall project is 27% complete. |
| WAIO Port Hedland Inner Harbour Expansion (Australia) 85% Iron Ore 1,900(b) H2 CY12 Increases total inner harbour capacity to 220 million tpa with debottlenecking opportunities to 240 million tpa. |
On schedule and budget. The overall project is 49% complete. |
| WAIO Port Blending and Rail Yard Facilities (Australia) 85% Iron Ore 1,400(b) H2 CY14 Optimises resource and enhances efficiency across the WAIO supply chain. |
On schedule and budget. The overall project is 16% complete. |
| WAIO Orebody 24 (Australia) 85% Iron Ore 698 H2 CY12 Maintains iron ore production output from the Newman Joint Venture operations. |
On schedule and budget. The overall project is 12% 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 30% complete. |
| Daunia (Australia) 50% Metallurgical Coal 800 CY13 Greenfield mine development with capacity to produce 4.5 million tpa of export metallurgical coal. |
On schedule and budget. The overall project is 40% complete. |
| Broadmeadow Life Extension (Australia) 50% Metallurgical Coal 450 CY13 Increases productive capacity by 0.4 million tpa and extends life of the mine by 21 years. |
On schedule and budget. The overall project is 62% complete. |
| Hay Point Stage Three Expansion (Australia) 50% Metallurgical Coal 1,250(b) CY14 Increases port capacity from 44 million tpa to 55 million tpa and reduces storm vulnerability. |
On schedule and budget. The overall project is 40% complete. |
| Caval Ridge (Australia) 50% Metallurgical Coal 2,100(b) CY14 Greenfield mine development and expansion of the Peak Downs Mine with capacity to produce 8.0 million tpa of export metallurgical coal. |
On schedule and budget. The overall project is 33% complete. |
BHP Billiton Exploration and Development Report for the quarter ended 31 March 2012
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| Project and ownership Share of approved capex(US$m) Initial production target date Production capacity (100%) |
Quarterly progress |
|---|---|
| RX1 Project (Australia) 100% EnergyCoal 400 H2 CY12 Increases run-of-mine thermal coal production by approximately 4 million tpa. |
On schedule and budget. The overall project is 78% 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 21% complete. |
| Newcastle Third Port Project Stage 3 (Australia) 35.5% EnergyCoal 367 CY14 Increases total coal terminal capacity from 53 million tpa to 66 million tpa. |
On schedule and budget. The overall project is 21% complete. |
Minerals exploration
Greenfield exploration continued on copper targets in South America, nickel and copper targets in Australia, and iron ore and potash in a number of regions globally.
For the nine months ended March 2012, BHP Billiton spent US$785 million on minerals exploration, of which US$668 million was expensed.
Petroleum exploration
Exploration and appraisal wells drilled during the quarter or in the process of drilling as at 31 March 2012.
| Well Location BHP Billiton equity |
Status |
|---|---|
| Gunflint-3 Gulf of Mexico MC948 11.2% (Noble operator) |
Drilling ahead |
| Julong Centre Brunei Block CA-01 22.5% (Total operator) |
Plugged and abandoned Dryhole |
| Julong East Brunei Block CA-01 22.5% (Total operator) |
Hydrocarbons encountered Drillingahead |
| Jujur-1 Sabah Malaysia Block N 60% (Operator) |
Plugged and abandoned Dryhole |
| N. Scarborough Offshore Western Australia WA-346-P 100% (Operator) |
Plugged and abandoned Hydrocarbons encountered |
| Tallaganda-1 Offshore Western Australia WA-351-P 55% (Operator) |
Hydrocarbons encountered Drillingahead |
Petroleum exploration expenditure for the nine months ended March 2012 was US$925 million, of which US$409 million was expensed. Our guidance for petroleum exploration expenditure for the 2012 financial year is US$1.4 billion, including the Onshore US exploration program. Onshore US Permian Basin appraisal activities for the March 2012 quarter included the successful completion and testing of six wells with commercial rates.
This report, together with the Production Report, represents the Interim Management Statement for the purposes of the UK Listing Authority’s Disclosure and Transparency Rules. There have been no significant changes in the financial position of the Group in the quarter ended 31 March 2012.
BHP Billiton Exploration and Development Report for the quarter ended 31 March 2012
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(a) Facilities ready for first production pending resolution of mercury content.
(b) Excludes announced pre-commitment funding.
Further information on BHP Billiton can be found at: www.bhpbilliton.com
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BHP Billiton Exploration and Development Report for the quarter ended 31 March 2012
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