OREANDA-NEWS.  October 22, 2012. This report covers the Group’s exploration and development activities for the September 2012 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, reported the press-centre of BHP Billiton.  

Development
BHP Billiton remains committed to its proven strategy which is to invest in large, long life, low cost, expandable, upstream assets, diversified by commodity, geography and market, throughout the economic cycle. In that regard, the Group has 19 high quality, low risk, largely brownfield projects currently in execution that are expected to deliver strong financial returns for our shareholders. The majority of these projects are scheduled to achieve first production before the end of the 2015 financial year which will support strong growth in our major, high margin businesses. With capital and exploration expenditure of USD22.0 billion forecast for the Group in the 2013 financial year, we are fully committed and no major project approvals are anticipated over this timeframe.

In response to the more challenging external environment, during the September 2012 quarter BHP Billiton decided not to proceed with the 2.5 million tonnes per annum (100 per cent basis) expansion of Peak Downs that is associated with the Caval Ridge mine development (Australia). Importantly, the 5.5 million tonnes per annum (100 per cent basis) Caval Ridge mine remains on schedule to deliver first production in the 2014 calendar year while the valuable Peak Downs expansion option remains embedded within the portfolio.

The Bass Strait Kipper gas field (Australia) offshore production facilities were completed in the September 2012 quarter and are ready to commence production pending resolution of the mercury content. The Bass Strait Kipper project will not be reported in future Exploration and Development Reports.

BHP Billiton’s Onshore US drilling and development expenditure totalled USD 1.0 billion in the September 2012 quarter. Our guidance for Onshore US drilling and development expenditure for the 2013 financial year remains unchanged at USD 4.0 billion. Over 80 per cent of this expenditure will be focused on the liquids rich Eagle Ford shale and Permian Basin.

Minerals exploration
Greenfield minerals exploration is currently focused on advancing copper targets within Chile and Peru. Minerals exploration expenditure for the September 2012 quarter was USD 199 million, of which USD 144 million was expensed.

Petroleum exploration
Petroleum exploration expenditure for the September 2012 quarter was USD 173 million, of which USD 80 million was expensed. Petroleum exploration expenditure of approximately USD 775 million is anticipated in the 2013 financial year with the majority of activity to occur in the Gulf of Mexico.

This report, together with the Production Report, represents the Interim Management Statement for the purposes of the UK Listing Authority’s Disclosure and Transparency Rules. There have been no significant changes in the financial position of the Group in the quarter ended 30 September 2012.