BHP to spend $1.5 billion on GoM, Auz

Jan 20, 2016

Anglo-Australian multinational mining, metals and petroleum company BHP Billiton plans to have a capital expenditure of US$1.5 billion in 2016 for its offshore projects, and to remain focused on high-return infill drilling opportunities in the Gulf of Mexico and Western Australia.

Image from BHP Billiton Twitter.

Plans for the company also include life extension projects at Bass Strait located offshore southeast Australia, and its North West Shelf project, Australia’s largest oil and gas resource development that accounts for more than 40% of the nation’s oil and gas production.

“Our Petroleum exploration is focused in the deepwater Gulf of Mexico, the Caribbean and the Beagle sub-basin off the coast of Western Australia. We are pursuing high-quality oil plays in these three focus areas and continue to invest opportunistically in future growth options,” BHP Billiton said in its operational review for 2H 2015.

Since August, BHP Billiton has acquired 26 blocks in the Western Gulf of Mexico Lease Sale with a 100% working interest. The company marked $321 million on petroleum exploration in 2H, of which $126 million was expensed.

As part of its plan for the 2016 financial year, BHP Billiton anticipates to spend $600 million on its exploration program that will largely focus on acreage access, seismic data acquisition across three key focus areas and increased activity in its exploration drilling program.

In Q4, the company approved an investment of $314 million for the North West Shelf Greater Western Flank-B petroleum project, which followed the delivery of first production from the North West Shelf Greater Western Flank-A project during the period.

“Our operated assets continued to perform well over the last six months. Commodity prices fell substantially in the first half of the 2016 financial year putting pressure on the whole resources sector,” Andrew Mackenzie, BHP Billiton CEO said. “We continue to cut costs and remain focused on safely improving our operational performance to enhance the resilience of our business. In this environment, we are also committed to protecting our strong balance sheet so we have the financial flexibility to manage further volatility and take advantage of the expected recovery in copper and oil over the medium term.”