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BHP Billiton Exploration and Development Report for the Year Ended 30 June 2013
BHP Billiton Limited
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$1.63 billion plus customary purchase price
adjustments.
Project and Share of Initial Production capacity Quarterly
ownership approved production (100%) progress
capex (US$m) target date
Petroleum projects
Macedon 1,050 CY13 200 million cubic feet gas On schedule and budget.
(Australia) per day. Commissioning activities are
71.43% progressing and the overall project is
Operator 99% complete.
Gas
Bass Strait Turrum(a) 1,350 CY13 11,000 bpd condensate On revised schedule and budget. The
(Australia) and processing capacity overall project is 91% complete.
50% of 200 million cubic feet
Non operator gas per day.
Gas/Gas Liquids
Bass Strait Longford 520 CY16 Designed to process On schedule and budget. The overall
Gas Conditioning Plant approximately 400 million project is 4% complete.
(Australia) cubic feet per day of high
50% CO2 gas.
Non operator
Gas
North West Shelf North 850 CY13 2,500 million cubic feet On budget. Commissioning activities
Rankin B Gas gas per day. are progressing and the overall project
Compression is 99% complete.
(Australia)
16.67%
Non operator
LNG
North West Shelf 400 CY16 To maintain LNG plant On schedule and budget. The overall
Greater Western throughput from the North project is 51% complete.
Flank-A West Shelf operations.
(Australia)
16.67%
Non operator
LNG
Minerals projects
Escondida Organic 2,207 H1 CY15 Replaces the Los On schedule and budget. The overall
Growth Project 1 Colorados concentrator project is 41% complete.
(Chile) with a new 152,000 tpd
57.5% plant.
Copper
BHP Billiton Exploration and Development Report for the year ended 30 June 2013 2
Project and Share of Initial Production capacity Quarterly
ownership approved production (100%) progress
capex (US$m) target date
Escondida Oxide Leach 414 H1 CY14 New dynamic leaching On schedule and budget. The overall
Area Project pad and mineral handling project is 61% complete.
(Chile) system. Maintains oxide
57.5% leaching capacity.
Copper
WAIO Jimblebar Mine 3,640(b)(c) H2 CY13 Increases mining and Ahead of schedule and on budget in
Expansion processing capacity to local currency, although the capital
(Australia) 35 million tpa with cost in US dollars is expected to be
96%(b) incremental 10% higher than the original budget.
Iron Ore debottlenecking The overall project is 89% complete.
opportunities to
55 million tpa.
WAIO Port Hedland 1,900(c) H2 CY12 Increases total inner First production was achieved in Q4
Inner Harbour harbour capacity to CY12. On schedule and budget. The
Expansion 220 million tpa. overall project is 92% complete.
(Australia) Debottlenecking
85% opportunities that would
Iron Ore add substantial, low cost
capacity are being
evaluated.
WAIO Port Blending 1,000(c)(d) H2 CY14 Optimises resource and On schedule and budget on the basis
and Rail Yard Facilities enhances efficiency of the revised scope. The overall
(Australia) across the WAIO supply project is 86% complete.
85% chain.
Iron Ore
WAIO Orebody 24 698 H2 CY12 Maintains iron ore First production was achieved in Q4
(Australia) production output from CY12. On schedule and budget. The
85% the Newman Joint overall project is 88% complete.
Iron Ore Venture operations.
Samarco Fourth Pellet 1,750 H1 CY14 Increases iron ore pellet On schedule and budget. The overall
Plant production capacity by project is 90% complete.
(Brazil) 8.3 million tpa to
50% 30.5 million tpa.
Iron Ore
Daunia 800 Q1 CY13 Greenfield mine First production was achieved in Q1
(Australia) development with CY13, ahead of schedule. Ramp-up is
50% 4.5 million tpa of export also progressing ahead of plan. The
Metallurgical Coal metallurgical coal final capital cost is expected to be
capacity. below budget. The overall project is
97% complete.
Hay Point Stage Three 1,250(c) CY14 Increases port capacity Schedule and budget are under
Expansion from 44 million tpa to review. The overall project is 66%
(Australia) 55 million tpa and complete.
50% reduces storm
Metallurgical Coal vulnerability.
Caval Ridge 1,870(c) CY14 Greenfield mine On schedule and budget. The overall
(Australia) development to produce project is 71% complete.
50% an initial 5.5 million tpa of
Metallurgical Coal export metallurgical coal.
BHP Billiton Exploration and Development Report for the year ended 30 June 2013 3
Project and Share of Initial Production capacity Quarterly
ownership approved production (100%) progress
capex (US$m) target date
Appin Area 9 845 CY16 Maintains Illawarra Coal’s On schedule and budget. The overall
(Australia) production capacity with a project is 44% complete.
100% replacement mining
Metallurgical Coal domain and capacity to
produce 3.5 million tpa of
metallurgical coal.
Cerrejon P40 Project 437 CY13 Increases saleable On schedule and budget. The overall
(Colombia) thermal coal production project is 71% complete.
33.3% by 8 million tpa to
Energy Coal approximately
40 million tpa.
Newcastle Third Port 367 Q2 CY13 Increases total coal First coal was loaded in Q2 CY13,
Project Stage 3 terminal capacity from ahead of schedule and on budget. The
(Australia) 53 million tpa to overall project is 76% complete.
35.5% 66 million tpa.
Energy Coal
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 50% Drilling ahead
DC535 (Anadarko operator)
Homevale-1 Western Australia 60% Plugged and abandoned
WA-475P (Operator) 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
BHP Billiton Exploration and Development Report for the year ended 30 June 2013 4
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BHP Billiton Exploration and Development Report for the year ended 30 June 2013 5
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