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BIL
BIBLT
BIL - BHP Billiton - Quarterly report on exploration and development activities
quarter ended 30 June 2008
BHP Billiton Plc
Share code: BIL
ISIN: GB0000566504
23 July 2008
Number 27/08
BHP BILLITON QUARTERLY REPORT ON EXPLORATION AND DEVELOPMENT ACTIVITIES
QUARTER ENDED 30 JUNE 2008
This report covers the Company`s exploration and development activities for the
quarter ended 30 June 2008. 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
First production was successfully achieved at the Samarco Third Pellet Plant
(iron ore) and Cliffs (nickel) was handed over to operations during the quarter
ended 30 June 2008. In addition, Neptune (petroleum) delivered first production
on 6 July 2008. These projects will not be reported in future Exploration and
Development Reports.
During the quarter Worsley Efficiency & Growth (alumina) was sanctioned.
PROJECT AND SHARE OF INITIAL PRODUCTION QUARTERLY PROGRESS
OWNERSHIP APPROVED PRODUCTION CAPACITY
CAPEX TARGET (100%)
US$M DATE
Petroleum
Projects
Neptune (US) 405 Mid CY08 50,000 First production
35% barrels of announced, see News
Oil/Gas oil and 50 Release dated 6 July
million 2008.
cubic feet Six of seven wells have
gas per day been completed with the
operation now ramping up
towards full oil and gas
production.
North West 200 End CY08 800 million Ahead of schedule and
Shelf Angel cubic feet budget. Offshore hook up
(Australia) gas per day complete and final
16.67% and 50,000 commissioning is in
Oil/Gas bpd progress.
condensate
North West 350 Late CY08 LNG On schedule and budget.
Shelf Train 5 processing On-site commissioning
(Australia) capacity of continued.
16.67% 4.2 million
LNG tpa
Shenzi (US) 1,940 Mid CY09 100,000 On schedule and budget.
44% barrels of Hull installed and
Oil/Gas oil and 50 topsides successfully
million mated to hull as of 11
cubic feet July 2008. Two wells
gas per day completed, third well
being drilled.
Pyrenees 1,200 1H CY10 96,000 On schedule and budget.
(Australia) barrels of Floating Production
71.43% oil and 60 Storage and Offtake
Oil/Gas million (FPSO) conversion
cubic feet continues.
gas per day
Bass Strait 500 CY11 10,000 bpd On schedule and budget.
Kipper condensate Fabrication of pipeline
(Australia) and and umbilical tubes
32.5% - 50% processing complete. Engineering,
Gas/Gas capacity of procurement,
Liquids 80 million construction and
cubic feet installation contract
gas per day executed.
North West 850 CY12 2,500 On schedule and budget.
Shelf North million Detailed engineering
Rankin B Gas cubic feet progressing. Long lead
Compression gas per day steel procurement
(Australia) continued.
16.67%
LNG
Minerals
Projects
Alumar - 725 Q2 CY09 2 million Schedule and budget
Refinery tpa of under review following
Expansion alumina advice from Operator.
(Brazil) 36% Engineering has been
Alumina completed and
procurement is well
advanced. Construction
is 60% complete and
project is overall 80%
complete.
Worsley 1,900 1H CY11 1.1 million Approval announced, see
Efficiency & tpa of News Release dated 1 May
Growth alumina 2008.
(Australia) Engineering and
86% procurement underway.
Alumina Long lead items ordered.
Early construction
activities started.
Cliffs 139 1H CY08 360,000 tpa On schedule and budget.
(Australia) nickel ore The mining activity was
100% transitioned to the
Nickel operations on 30 June
2008. The surface and
minor underground
capital works will
continue until October
2008.
Iron Ore 1,850 1H CY10 26 million On schedule and budget
(Western tpa in local currency.
Australia) additional Engineering is now over
RGP4 iron ore 85% complete and
86.2% system construction over 40%
Iron Ore capacity complete.
Samarco Third 590 1H CY08 7.6 million First production
Pellet Plant tpa achieved during April
(Brazil) additional 2008. Pelletising plant
50% iron ore is operating at design
Iron Ore capacity capacity and the
concentration plant is
in ramp up.
Gemco 110 1H CY09 1 million On schedule and budget.
(Australia) tpa of Project civil
60% additional construction is underway
Manganese manganese and procurement
concentrate activities progressing
well. Project is 41%
complete.
Newcastle 390 End CY10 Export coal On schedule and budget.
Third Port loading Engineering is now 95%
Project facility 30 complete. Construction
(Australia) million tpa and dredging commenced
35.5% with procurement well
Energy Coal advanced.
Klipspruit 450 2H CY09 Incremental On schedule and budget.
(South Africa) 1.8 million Engineering
100% tpa export significantly advanced
Energy Coal thermal with civil works across
coal site well underway and
Incremental the construction of the
2.1 million processing plant over
tpa 50% complete.
domestic
thermal
coal
Douglas- 975 Mid CY10 10 million On schedule and budget.
Middelburg tpa export Civil and earthworks
Optimisation thermal contractors have been
(South Africa) coal and mobilised with
100% 8.5 million procurement of long lead
Energy Coal tpa items placed.
domestic
thermal
coal
(sustains
current
output)
MINERALS EXPLORATION
BHP Billiton continued to pursue global exploration opportunities for key
commodities of interest utilising both in-house capabilities and partnerships.
Grassroots exploration continued on copper targets in Australia, Chile and the
Democratic Republic of Congo (DRC); on nickel targets in Australia, Russia,
Colombia and Africa and on diamond targets in the DRC. Exploration for iron ore,
coal and bauxite was undertaken in a number of regions including Australia,
South America, Russia and West Africa.
For the year ended 30 June 2008, BHP Billiton spent US$658 million on minerals
exploration, of which US$547 million was expensed.
In addition to the above grassroots activities, the following updates are
provided:
Pampa Escondida
The Escondida resource base presents numerous options for delivering production
growth in future years that are currently under study. These studies, including
the addition of a third concentrator, are at various stages of development, and
are focussed on increasing copper production in the face of declining ore
grades, either through improved copper recovery or increased production rates.
Extensive exploration of the Escondida mining lease has been underway in recent
years; with the knowledge that additional reserves will enhance the investment
in further concentrator capacity. Exciting results are being obtained in
several areas close to existing infrastructure and processing facilities,
including the new Pampa Escondida prospect. Drilling to date suggests that
Pampa Escondida contains at least 1 billion metric tonnes of porphyry style
mineralisation.(1)(2)
In order to properly and rapidly evaluate identified exploration targets,
decisions were recently made to aggressively expand the exploration and
development drilling program. The drilling program will be ramping up from 11
drill rigs that completed 94,351 metres in the 12 months ended 30 June 2008 to
25 drill rigs estimated to complete 320,000 metres in the 12 months ending 30
June 2009, maintaining the capability of completing over 300,000 metres
annually. Over the next five years, Escondida will invest an estimated US$327
million (US$188 million BHP Billiton share) in drilling, assaying, and
metallurgical testwork across the entire mining lease. This work will be
directed at the delineation and expansion of three specific projects (including
Pampa Escondida), along with the continued exploration of additional targets
based on new geological models of mineralisation from the recent work.
Iron Ore and Manganese Resources and Reserves
During the quarter, increases in iron ore and manganese resources and reserves
were announced, incorporating:
* A 46% increase in the Mineral Resource and a 23% increase in the Ore Reserve
at Western Australia Iron Ore;
* An 11% increase in the Mineral Resource and a 30% increase in the Ore Reserve
at Samarco Mineracao; and
* An 82% increase in the Mineral Resource at Samancor Manganese. Work is in
progress to incorporate the new Manganese Resource and estimate its impact on
Manganese Reserves.
See News Release dated 24 June 2008 for further information including Competent
Persons statements.
(1) The minimum value on the range of potential mineralisation in the Pampa
Escondida project is based on probabilistic and deterministic assessment of
limited drill results by experts with knowledge of the data and mineral deposits
of similar characteristics. The target definition is conceptual in nature,
there has not been sufficient exploration to define a Mineral Resource and it is
uncertain if further exploration will result in the determination of a Mineral
Resource.
(2) Competent persons for Escondida: R Preece (FAusIMM) and J McCluskey
(MAusIMM) are full time employees of BHP Billiton and have the required
qualifications and experience, and are Competent Persons for Pampa Escondida,
which is reported under Section 18 of the JORC code. R. Preece and J. McCluskey
verify that this report is based on and fairly reflects the information in the
supporting documentation relating to Exploration Results.
PETROLEUM EXPLORATION
Exploration and appraisal wells drilled during the quarter or in the process of
drilling as at 30 June 2008.
WELL LOCATION BHP BILLITON EQUITY STATUS
Thebe-2 Exmouth Plateau 100% BHP Billiton Hydrocarbons
Western and operator encountered.
Australia Plugged and
WA-346-P abandoned.
Snarf-1 Browse Basin 20% BHP Billiton Dry hole.
Western (Woodside operator) Plugged and
Australia abandoned.
WA-275-P
Petroleum exploration expenditure for the year ended 30 June 2008 was US$692
million, of which US$312 million was expensed.
Further information on BHP Billiton can be found on our Internet site:
www.bhpbilliton.com
AustraliaSamantha Evans, Media RelationsTel: +61 3 9609 2898Mobile: +61 400 693
915email: Samantha.Evans@bhpbilliton.com
Leng Lau, Investor RelationsTel: +61 3 9609 4202Mobile: +61 403 533 706email:
Leng.Y.Lau@bhpbilliton.com
United Kingdom & South AfricaAndre Liebenberg, Investor RelationsTel: +44 20
7802 4131Mobile: +44 7920 236 974email: Andre.Liebenberg@bhpbilliton.com
Illtud Harri, Media RelationsTel: +44 20 7802 4195Mobile: +44 7920 237 246email:
Illtud.Harri@bhpbilliton.comUnited StatesScott Espenshade, Investor
RelationsTel: +1 713 599 6431 Mobile: +1 713 208 8565email:
Scott.Espenshade@bhpbilliton.com
Cautionary Note to US Investors - The SEC generally permits mining companies in
their filings with the SEC to disclose only those mineral deposits that the
company can economically and legally extract. Certain terms in this release,
including "resources" and "porphyry style mineralisation", would not generally
be permitted in an SEC filing. The material denoted by such terms is not proven
or probable Reserves as such terms are used in the SEC`s Industry Guide 7, and
there can be no assurance that BHP Billiton will be able to convert such
material to proven or probable Reserves or extract such material economically.
BHP Billiton urges investors to refer to its Annual Report on Form 20-F for the
fiscal year ended June 30, 2007 (and, with respect to iron ore Reserves, the BHP
Billiton Reserves News Release, dated 24 June 2008 and available at
bhpbilliton.com and www.sec.gov), for its most recent statement of mineral
Reserves calculated in accordance with Industry Guide 7.
BHP Billiton Limited ABN 49 004 028 077Registered in AustraliaRegistered
Office:Level 27, 180 Lonsdale Street Melbourne Victoria 3000Telephone +61 1300
554 757Facsimile +61 3 9609 3015
BHP Billiton Plc Registration number 3196209Registered in England and
WalesRegistered Office: Neathouse Place London SW1V 1BH United KingdomTelephone
+44 20 7802 4000Facsimile +44 20 7802 4111
The BHP Billiton Group is headquartered in Australia
Date: 23/07/2008 08:11:01 Produced by the JSE SENS Department.
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