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BIL
BIBLT
BHP - BHP Billiton plc - BHP Billiton quarterly report on exploration and
Development activities quarter ended 31 December 2006
Share codeZ: BIL
ISIN: GB0000566504
This report covers the company`s exploration and development activities for the
quarter ended 31 December 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.
DEVELOPMENT
While the majority of BHP Billiton`s projects remain broadly on schedule, tight
labour markets and shortages of equipment and supplies continue to be evident
across the resources industry globally and will continue to impact project costs
and schedules.
The Spence (Chile) copper project was commissioned during the quarter and
achieved first production in early December three weeks ahead of schedule. The
budget is subject to finalisation but is expected to be within the approved
budget (excluding FX impacts).
In addition, the Board approved the increased capital costs for the Ravensthorpe
(Australia) nickel project to a total budget of US$2.2 billion. Lower than
expected labour productivity and late delivery of some materials and equipment
at Ravensthorpe means that the target date for first metal from Ravensthorpe is
now the first quarter of calendar year 2008.
PROJECT AND SHARE OF INITIAL PRODUCTION QUARTERLY PROGRESS
OWNERSHIP APPROVED PRODUCTION CAPACITY
CAPEX TARGET (100%)
US$M DATE
Minerals
Projects
Alumar - 725 Q2 CY09 2 million Forecast costs have
Refinery tpa increased by 40%
Expansion following BHP Billiton`s
(Brazil) review of the capital
36% cost estimate and the
Alumina inclusion of additional
contingencies. Cost
pressures are due to
increases in
construction, electrical,
instrumentation and
labour costs and general
overheads. As a result
the project schedule is
experiencing delays and
we expect commissioning
to occur in the second
quarter of CY09.
Spence (Chile) 990 Q4 CY06 200,000 Completed three weeks
100% tpa copper ahead of schedule.
Copper cathode Budget is subject to
finalisation but is
expected to be within the
approved budget
(excluding FX impacts).
Western 1,300 Q4 CY07 20 million On schedule and budget.
Australia Iron tpa Engineering and
Ore procurement activities
(Australia) - were essentially
RGP3 completed during the
85% quarter with construction
Iron Ore activities now 35%
complete.
Samarco Third 590 1H CY08 7.6 On schedule and budget.
Pellet Plant million First steel was erected
(Brazil) tpa at the Pellet Plant at
50% Ubu and 50% of the pipe
Iron Ore for the pipeline has been
installed. Overall the
project is 49% complete.
Koala 200 End CY07 3,300 On schedule and budget.
Underground tonnes per Procurement is well
(Canada) day ore advanced and engineering
80% processed is nearly complete.
Diamonds
Ravensthorpe 2,200 Q1 CY08 Up to On revised schedule and
(Australia) 50,000 tpa budget. Construction is
100% contained approximately 78%
Nickel nickel in complete with engineering
concentrat and procurement
e activities finalised
during the quarter.
Yabulu 556 Q1 CY08 45,000 tpa On schedule however the
(Australia) nickel budget has been revised.
100% Expansion was essentially
Nickel mechanically complete at
the end of December 2006.
Petroleum
Projects
Atlantis South 1,500 Under 200,000 Cost and schedule remain
(US) review, barrels of under review but we
44% forecast oil and estimate a capital cost
Oil/Gas 2H CY07 180 of approximately US$1.5
million billion to plateau
cubic feet production from 11 wells
of gas per compared to the previous
day estimate of approximately
US$1 billion, a 50%
increase. Development
costs from plateau
production for the full
life of the field remain
subject to finalisation.
Six development wells
have been drilled with
five being completed at
the end of December. The
Balder installation
vessel is undergoing
repair as publicly
reported by Heerema.
North West 300 Late CY08 LNG On schedule and revised
Shelf Train 5 processing budget as advised by the
(Australia) capacity Operator. Preassembled
16.67% of 4.2 units from the
LNG million construction site in
tpa Indonesia have begun
arriving on site. The
major mechanical erection
contractor is on site and
has begun work.
Neptune (US) 300 End CY07 50,000 On schedule however the
35% barrels of project is experiencing
Oil/Gas oil and 50 some cost pressure.
million Drilling was completed
cubic feet for the first two of the
gas per seven development wells.
day
Stybarrow 300 Q1 CY08 80,000 On schedule however the
(Australia) barrels of project is experiencing
50% oil per some cost pressure. Two
Oil/Gas day injection wells were
successfully completed
and three development
wells have been drilled.
The FPSO has completed
sea trials.
North West 200 End CY08 800 On budget and schedule.
Shelf Angel million Fabrication of topsides
(Australia) cubic feet and the jacket are
16.67% gas per progressing to plan. All
Oil/Gas day major contracts have now
been let.
Shenzi (US) 1,940 Mid CY09 100,000 On budget and schedule.
44% barrels of Drilling of the first
Oil/Gas oil and 50 development well was
million completed and fabrication
cubic feet of the topsides and hull
gas per continued.
day
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.
Grassroots exploration continued on diamond targets in Angola, Canada and the
Democratic Republic of Congo (DRC), on copper targets in Mexico, Chile, Mongolia
and the DRC; and on nickel targets in Australia, Russia and Africa. Exploration
for iron ore, coal, potash and bauxite was undertaken in a number of regions
including Australia, Brazil, Canada and West Africa.
For the half year ended 31 December 2006, BHP Billiton spent US$153 million on
minerals exploration, of which US$111 million was expensed. Capitalised
exploration included US$41 million for the Olympic Dam Expansion.
PETROLEUM EXPLORATION
Exploration and appraisal wells drilled during the quarter or in the process of
drilling as at 31 December 2006.
WELL LOCATION BHP BILLITON EQUITY STATUS
Persephone-1 Dampier sub- 16.67% BHP Hydrocarbons
basin Western Billiton; Woodside encountered. More
Australia operator appraisal required.
WA-1-L Plugged and
Abandoned.
Shenzi-6 Gulf of Mexico, 44% BHP Billiton Drilling ahead.
Green Canyon and operator
Block 609
Ruby-1 Trinidad and 25.5% BHP Billiton Temporarily
Tobago, Block 3 and operator abandoned.
(a) Encountered
approximately 1,200
feet TVD (gross) of
hydrocarbon-bearing
sands with more than
800 TVD feet of net
pay. The well tested
at a rate of nearly
5,000 barrels of oil
per day through a
7/8th-inch choke.
See news release
dated 2 November
2006.
Ruby-2 Trinidad and 25.5% BHP Billiton Drilling ahead.
Tobago, Block 3 and operator
(a)
Torosa-1 Browse Basin 8.33% BHP Billiton, Hydrocarbons
Western Woodside operator encountered. More
Australia appraisal required.
WA-30-R Plugged and
Abandoned.
Torosa-3 Browse Basin 8.33% BHP Billiton, Hydrocarbons
Western Woodside operator encountered. More
Australia appraisal required.
WA-30-R Plugged and
Abandoned.
Petroleum exploration expenditure for the half year ended 31 December 2006 was
US$159 million. The amount expensed was US$154 million including US$43 million
of exploration expenditure previously capitalised.
25 January 2007
Further information on BHP Billiton can be found on our Internet site:
www.bhpbilliton.com
Australia
Samantha Evans, Media Relations
Tel: +61 3 9609 2898 Mobile: +61 400 693 915
email: Samantha.Evans@bhpbilliton.com
Jane Belcher, Investor Relations
Tel: +61 3 9609 3952 Mobile: +61 417 031 653
email: Jane.H.Belcher@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
Ivan Arriagada, Investor Relations
Tel: +44 20 7802 4183 Mobile: +44 7769 936 227
email: Ivan.D.Arriagada@bhpbilliton.com
Date: 25/01/2007 08:02:06 Produced by the JSE SENS Department. |
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