|
BIL
BIBLT
BHP Billiton Plc - Quarterly report on exploration And development activities
BHP Billiton Plc
Share Code: BIL
Isin: GB0000566504
26 April 2006
BHP BILLITON QUARTERLY REPORT ON EXPLORATION AND DEVELOPMENT ACTIVITIES
January 2006 - March 2006
This report covers exploration and development activities for the quarter ended
31 March 2006. 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.
During the quarter, the Company saw no easing of the industry wide pressures
that have been placing constraints on the supply side"s response to continued
strong global demand for raw materials. A shortage of people, equipment and
supplies has led to tight labour markets and difficulty in sourcing construction
and drilling plant and machinery, which in turn has led to rising input costs.
Currency strength against the US dollar has also added further pressure. These
conditions, which are currently particularly acute in Australia and the Gulf of
Mexico, continue to challenge the ability of BHP Billiton to deliver development
projects to budget. Despite these pressures, most projects currently remain on
or ahead of schedule, with the Atlantis South schedule remaining under review
following last year"s hurricane activity in the Gulf of Mexico, and minor
schedule delays with certain projects in Western Australia.
Atlantis South Development, Gulf of Mexico, USA (BHP Billiton 44%, non-operated)
In February 2005, BHP Billiton approved a revised budget of US$1.1 billion for
the development of the Atlantis South oil and gas reserves. The Atlantis South
Development will have a gross nameplate daily capacity of 200,000 barrels of oil
and 180 million cubic feet of natural gas. During the quarter, the flowlines
connecting the Atlantis production facilities to the Caesar and Cleopatra
pipeline system were installed. Drilling of the development wells commenced with
the dedicated rig completing one well and commencing work on the second during
the period. Integration work continued on the Atlantis production facility at
construction yards in Texas, USA. Last year"s hurricanes impacted the
availability of equipment required to allow for project completion. The project
schedule remains under review.
North West Shelf expansion, Australia (BHP Billiton 16.67%, non-operated)
In June 2005, BHP Billiton approved an expansion to the liquefied natural gas
(LNG) processing facilities at the North West Shelf Project in Australia. The
project includes the construction of a fifth liquefaction processing train with
a gross annual capacity of 4.2 million tonnes, additional processing facilities
and associated infrastructure. Engineering and procurement activities are
nearing completion and most major construction contracts have been awarded. The
construction of pre-assembly units is progressing to plan. BHP Billiton"s share
of development costs, based on the operator"s estimate, is approximately US$250
million. First production is expected by late 2008.
Neptune Development, Gulf of Mexico, USA (BHP Billiton 35%, operated)
In June 2005, BHP Billiton approved the Neptune oil and gas development located
in the Gulf of Mexico. The project includes the construction, installation and
operation of a stand-alone platform and the associated subsea system with seven
wells. The facility will have a gross nameplate daily capacity of 50,000 barrels
of oil and 50 million cubic feet of gas. During the quarter, construction
continued on the facility"s topsides at fabrication yards in Louisiana, USA.
The main framing was completed and installation of the deck plate commenced.
Hull fabrication is underway and drilling plans are being finalised.
Development costs are estimated at US$850 million (BHP Billiton share US$300
million) with first production expected by the end of 2007.
Stybarrow Development, Australia (BHP Billiton 50%, operated)
In November 2005, BHP Billiton approved the Stybarrow oil field development
located off the west coast of Australia. The project involves a subsea
development and a Floating Production Storage and Offtake (FPSO) facility with a
gross daily capacity of approximately 80,000 barrels of liquids, which will be
provided under a 10 year service agreement. During the quarter, the FPSO
services contract was executed, and the manufacture of major equipment
commenced. Project costs are estimated at US$600 million (BHP Billiton share
approximately US$300 million). First production is expected during the first
quarter of 2008.
North West Shelf Angel Development, Australia (BHP Billiton 16.67%, non-
operated)
In December 2005, BHP Billiton approved the development of the North West Shelf
Venture"s Angel gas and condensate field off the west coast of Australia. The
project involves the installation of the Venture"s third major offshore
production platform and associated infrastructure, including a new subsea 50
kilometre pipeline which will be tied into the North Rankin platform.
Hydrocarbons will be produced through one processing unit with a gross daily
capacity of up to 800 million standard cubic feet of gas and associated
condensate. Detailed design continued during the quarter and the jacket and
topside fabrication contracts were awarded. BHP Billiton"s share of development
costs, based on the operator"s estimate, is approximately US$200 million. The
development is expected to be fully operational by the end of 2008.
MINERALS DEVELOPMENT
Aluminium
Worsley Development Capital Projects (DCP), Australia (BHP Billiton 86%)
The Worsley Alumina DCP was approved in May 2004 with a budget of US$192 million
(US$165 million BHP Billiton share). The projects will increase alumina capacity
by 250,000 tonnes per annum (215,000 tonnes per annum BHP Billiton share) to a
capacity of 3.5 million tonnes per annum (3.01 million tonnes per annum BHP
Billiton share). Commissioning activities commenced on schedule during the
quarter with 44 of 71 packages of work now complete and handed over to
operations.
Alumar Refinery expansion, Brazil (BHP Billiton 36%)
The Alumar Refinery expansion was approved in December 2005 with a budget of
US$518 million (BHP Billiton share). The project includes upgrades to the
existing production unit and duplication of the upgraded line and will increase
alumina capacity by 2 million tonnes per annum to 3.5 million tonnes per annum
(100% basis). During the quarter, detailed engineering and procurement work and
construction of temporary site facilities continued and civil works of permanent
facilities commenced. Commissioning is expected to be completed in the middle
of 2008.
Base Metals
Escondida Sulphide Leach, Chile (BHP Billiton 57.5%)
The Escondida Sulphide Leach Project was approved in April 2004. The project
will produce 180,000 tonnes (103,500 tonnes BHP Billiton share) of copper
cathode per annum, utilising a bacterially assisted leaching process on low
grade run-of-mine ore from both the Escondida and Escondida Norte pits. The
resulting solutions will then be treated in conventional solvent extraction and
electrowinning plants. During the quarter, leach pad irrigation commenced and
ore stacking continued with approximately 32 million tonnes of ore being
delivered to the pad to date. Structural steel erection, electrical,
instrumentation, piping and mechanical installation in the solvent extraction,
electrowinning and desalination plants continued. A project budget of US$870
million (US$500 million BHP Billiton share) was approved by the Board.
Production is scheduled to begin during the second half of 2006.
Spence, Chile
The Spence Project, approved in October 2004, will be a new open cut mine with
associated plant facilities capable of producing 200,000 tonnes per annum of
copper cathode through a combination of chemical and bacterial leaching. During
the quarter, the majority of the equipment and bulk materials arrived on site
and mine pre-strip operations proceeded to schedule. The initial stage of the
dump leach pad was completed and the first low grade oxide mineralisation was
encountered as expected in the open pit. Concrete work in all areas of the
process plant is effectively complete and liner placement for the heaps and
ponds is continuing. Mechanical and structural erection works continue with all
major equipment now in place. Electrical and plant piping contractors have also
commenced work. The project budget is US$990 million. Production is scheduled
to begin during the last quarter of 2006.
Carbon Steel Materials
Rapid Growth Project 2, Australia (BHP Billiton 85%)
The Rapid Growth Project 2 (RGP2) was approved in October 2004 with a budget of
US$575 million (BHP Billiton share US$489 million). The project comprises
increases in mine, rail and port capacity through the development of Ore Body
18, purchase of additional rolling stock and a new car dumper at Finucane
Island. Site activities are proceeding to schedule, construction progress is
well advanced and all plans for commissioning are in place. The project will
increase installed capacity at Western Australian Iron Ore by 8 million tonnes
per annum by the second half of 2006 (this will be offset by an 8 million tonnes
per annum reduction in capacity due to the suspension of the Goldsworthy ship
loading operations at Finucane Island in the third quarter of 2006, related to
the Rapid Growth Project 3).
Rapid Growth Project 3, Australia (BHP Billiton 85%)
The Rapid Growth Project 3 (RGP3) was approved in October 2005. The project
will comprise expansions to mine, rail and port facilities. Installed capacity
at Western Australian Iron Ore"s Area C mine will increase by 20 million tonnes
per annum by the fourth quarter of 2007, and the project will also deliver some
latent capacity at the port to be utilised in future expansions. Engineering
activities are well advanced and procurement works are continuing to plan.
Initial construction works have commenced at mine, port and rail sites.
Development costs are estimated at US$1.5 billion (US$1.3 billion BHP Billiton
share).
Samarco Third Pellet Plant Project, Brazil (BHP Billiton 50%)
The Samarco Third Pellet Plant Project was approved in October 2005. The
project will increase annual iron ore pellet production capacity by 7.6 million
tonnes to 21.6 million tonnes per annum (100% basis). The new facilities will
include additional mining capacity and a new concentrator at the Germano site, a
400-kilometre slurry pipeline from Germano to Ponta Ubu and a third pellet
plant, additional stockyard and enhanced shiploading capacity at the Ponta Ubu
site. During the quarter, the majority of the equipment supply contracts were
awarded and delivery of pipes to locations along the pipeline route in
preparation for installation commenced. The project budget is US$1.18 billion
(US$590 million BHP Billiton share). Production is scheduled to commence during
the first half of 2008.
Stainless Steel Materials
Ravensthorpe Nickel Project, Australia
The Ravensthorpe Nickel Project was approved in March 2004. The project includes
the development of a mine, treatment plant and associated infrastructure near
Ravensthorpe in Western Australia. The Ravensthorpe processing plant will
produce a mixed nickel-cobalt hydroxide intermediate product (MHP).
Engineering, procurement, off site fabrication and infrastructure activities
continue to proceed to schedule. Key milestones achieved during the quarter
include erection of the acid plant stack, mobilisation of the first mechanical
and piping installation contractor and placement of the first flash vessels in
the pressure acid leach area. The project is approximately 60 per cent complete.
Following a review of project costs completed in August 2005, a revised budget
of US$1,340 million was approved.
Yabulu Extension Project, Australia
The Yabulu Extension Project was approved in March 2004. The metal refining
section of the Yabulu refinery near Townsville in Queensland is being expanded
to process up to 220,000 tonnes of MHP. This additional processing capacity will
increase refinery production to 76,000 tonnes of nickel and 3,500 tonnes of
cobalt. Construction is underway with major subcontractors for civil works and
mechanical and piping mobilised to site. The project is approximately 47 per
cent complete. Following a review of project costs completed in August 2005, a
revised budget of US$460 million was approved. First nickel metal production
from the expanded Yabulu refinery is on schedule for the third quarter of 2007.
PETROLEUM EXPLORATION
Exploration and appraisal wells drilled during the quarter or in the process of
drilling as at 31 March 2006.
WELL LOCATION BHP BILLITON STATUS
EQUITY
Blackbeard Gulf of 5% BHP Billiton; Drilling ahead.
West Mexico, Exxon operator
South
Timbalier
Block 168
Knotty Head 1 Gulf of 25% BHP Successful
Mexico, Billiton; appraisal of side
Green Canyon Nexen operator track well. See
512 News Release of 20
December 2005.
Puma-2 & 3 Gulf of 33.3% BHP Puma 2 temporarily
Mexico, Billiton; suspended. Rig
Green Canyon BP operator undergoing repairs.
821 / 866 Puma 3 surface
casing set.
Everest Gulf of 34% BHP Plugged and
Mexico, Billiton; abandoned.
Atwater Valley BP operator Dry hole.
272
Ouachita-1 Gulf of 16.875% BHP Drilling ahead.
Mexico, Billiton;
Green Canyon Amerada Hess
376 operator
Davan-1 UK North Sea 35% BHP Plugged and
Block 9 / 5a-4 Billiton; abandoned.
Total operator Results being
evaluated.
Jacala-1 Western 55% BHP Billiton Dry hole. Plugged
Australia and operator and abandoned.
Exmouth sub-
basin
WA-351-P
MINERALS EXPLORATION
BHP Billiton continued to pursue global exploration opportunities for key
commodities of interest utilising both in-house capabilities and the Junior
Alliance Programme.
Exploration continued on diamond targets in Canada, Angola and the Democratic
Republic of Congo (DRC); on copper targets in Mongolia, the DRC and Mexico; and
on nickel targets in Australia, Botswana and China. Exploration for iron ore,
coal and bauxite was undertaken in a number of regions including Australia, East
Asia, South America and West Africa.
EXPLORATION EXPENDITURE
During the nine months ended 31 March 2006, BHP Billiton spent US$154 million on
minerals exploration, of which US$150 million was expensed, and US$332 million
on petroleum exploration, of which US$162 million was expensed.
****
Further information on BHP Billiton can be found on our Internet site:
www.bhpbilliton.com
Australia
Jane Belcher, Investor Relations
Tel: +61 3 9609 3952 Mobile: +61 417 031 653
email: Jane.H.Belcher@bhpbilliton.com
Samantha Evans, Media Relations
Tel: +61 3 9609 2898 Mobile: 61 400 693 915
email: Samantha.Evans@bhpbilliton.com
United Kingdom
Mark Lidiard, Investor & Media Relations
Tel: +44 20 7802 4156 Mobile: +44 7769 934 942
email: Mark.Lidiard@bhpbilliton.com
Illtud Harri, Media Relations
Tel: +44 20 7802 4195 Mobile: +44 7920 237 246
email: Illtud.Harri@bhpbilliton.com
United States
Tracey Whitehead, Investor & Media Relations
Tel: US +1 713 599 6100 or UK +44 20 7802 4031
Mobile: +44 7917 648 093
email: Tracey.Whitehead@bhpbilliton.com
South Africa
Alison Gilbert, Investor Relations
Tel: +27 11 376 2121 UK +44 20 7802 4183
email: Alison.Gilbert@bhpbilliton.com
Date: 26/04/2006 08:45:42 AM Produced by the JSE SENS Department
|
|
