OREANDA-NEWS.  July 26, 2013. This report covers the Group’s exploration and development activities for the June 2013 quarter. nless 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
The majority of BHP Billiton’s 18 low risk, largely brownfield, major projects are scheduled to deliver first production before the end of the 2015 financial year.

Our Western Australia Iron Ore (WAIO) business achieved several milestones during the 2013 financial year, which included an increase in port capacity to 220 million tonnes per annum (100 per cent basis) following the successful installation of all major infrastructure associated with the WAIO Port Hedland Inner Harbour Expansion project.

In addition, WAIO Orebody 24 delivered first production during the period. The WAIO Jimblebar Mine Expansion, which will increase supply chain capacity to 220 million tonnes per annum (100 per cent basis), is now expected to achieve first production in the December 2013 quarter, ahead of schedule.

The project is on budget in local currency, although the capital cost in US dollars is expected to be 10 per cent, or USD340 million higher than the original budget. This increase has been more than offset by a change in scope and USD 400 million reduction in the budget for the WAIO Port Blending and Rail Yard Facilities project, which reflects the decision to prioritise capital efficient growth in the inner harbour. As a result, WAIO remains well positioned to deliver 220 million tonnes per annum of supply chain capacity ahead of schedule and on budget.

The Daunia and Broadmeadow Life Extension projects (both metallurgical coal) also delivered first production during the 2013 financial year, ahead of schedule. In addition, first coal was loaded from the Newcastle Third Port Stage 3 project (energy coal) during the June 2013 quarter. The WAIO Port Hedland Inner Harbour Expansion, WAIO Orebody 24 and Daunia projects will not be reported in future Exploration and Development Reports.

BHP Billiton’s Onshore US drilling and development expenditure totalled USD 4.8 billion in the 2013 financial year and reflected a higher working interest across several fields and an increase in drilling speed, which delivered more wells per rig and a higher rate of completion activity.

Over 80 per cent of our Onshore US expenditure was directed towards the Eagle Ford and Permian, as planned. An improvement in drilling productivity is expected to facilitate a reduction in our rig count in the 2014 financial year, while a lower level of capital expenditure for Onshore US will be increasingly focused on our liquids rich acreage in the Eagle Ford.

BHP Billiton continued to simplify its portfolio during the period. On 20 June 2013 the Company announced an extension of its WAIO long term joint venture relationship with ITOCHU Corporation (ITOCHU) and Mitsui & Co., Ltd (Mitsui). This transaction was completed in July 2013 andhas aligned interests across the WAIO supply chain.


Under the terms of the agreement, ITOCHU and Mitsui invested approximately USD 0.8 billion and US\\$0.7 billion, respectively, in shares and loans of BHP Iron Ore (Jimblebar) Pty Ltd, representing an eight per cent and seven per cent interest in the Jimblebar mining hub and resource.

The consideration included a share of capital costs associated with the Jimblebar Mine Expansion project.

During the June 2013 quarter, BHP Billiton also completed the sale of 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, to PetroChina International Investment (Australia) Pty Ltd for USD 1.63 billion plus customary purchase price adjustments.