OREANDA-NEWS. January 28, 2013. This report covers the Group’s exploration and development activities for the December 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’s unchanged strategy, which is to invest in large, long life, low cost, expandable, upstream assets, diversified by commodity, geography and market, ensures we are well placed to deliver high margin growth in our major businesses. The Group has 20 low risk, largely brownfield projects in various stages of development and these projects, all of which remain on schedule, are expected to generate strong financial returns for our shareholders.

The Western Australia Iron Ore (WAIO) Port Hedland Inner Harbour Expansion project achieved first production during the December 2012 quarter as ore was received by the recently installed fifth car dumper at Finucane Island. Debottlenecking and optimisation projects across the WAIO supply chain are currently being evaluated and have the potential to underpin significant growth well beyond recently expanded port capacity of 220 million tones per annum (100 per cent basis). WAIO Orebody 24 also delivered first production.

During the December 2012 quarter, BHP Billiton announced approval for a USD520 million (BHP Billiton share) investment in the Longford Gas Conditioning Plant (LGCP) project as part of the Gippsland Basin Joint Venture (Australia). The LGCP will add carbon dioxide (CO2) removal capacity which is necessary to condition production from the Bass Strait Turrum project currently in development.

In addition, BHP Billiton signed a definitive agreement with PetroChina International Investment (Australia) Pty Ltd during the period to sell its 8.33 per cent interest in the East Browse Joint Venture and 20 per cent interest in the West Browse Joint Venture, located offshore Western Australia, for a cash consideration of USD 1.63 billion. The transaction is subject to regulatory approval and other customary conditions. Completion is expected in the first half of calendar year 2013.

BHP Billiton’s Onshore US drilling and development expenditure for the December 2012 half year was USD 2.1 billion and guidance 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 areas of the Eagle Ford and Permian.

Minerals exploration
Greenfield minerals exploration is focused on advancing copper targets within Chile and Peru. Minerals exploration expenditure for the December 2012 half year was USD 363 million, of which USD 272 million was expensed.

Petroleum exploration
Exploration and appraisal wells drilled during the quarter or in the process of drilling as at 31 December 2012.

Petroleum exploration expenditure for the December 2012 half year was USD 308 million, of which USD 276 million was expensed. Petroleum exploration expenditure of approximately USD 775 million is anticipated in the 2013 financial year with the majority of drilling activity scheduled to occur in the Gulf of Mexico.

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