BHP has announced a renewed focus on “value over volume” in their petroleum business.
Speaking at the 2015 Barclays CEO Energy-Power conference in New York, petroleum president Tim Cutt said that BHP expected to start drilling its first Australian prospect, the Beagle Sub-Basin, in 2018.
With oil prices loitering around $50 per barrel and lower, Cutt’s presentation focussed on efforts to reduce development and operating costs of onshore US operations.
Cutt said BHP’s current plans would see capital and exploration expenditure reduced by 34 per cent in FY16, taking capex to US$1.4 billion with scope to reduce further.
That expenditure will support nine rig operated development programs.
“We are well positioned on the cost curve and our productivity programs are making us even more competitive,” Cutt said.
“We have best in class operating costs and deepwater drilling capabilities in our conventional business, and we will continue to reduce our onshore US drilling costs and build on our industry leading well completion efficiency.
“Our portfolio includes several attractive growth options that will add significant value over the long term.”
Cutt said BHP will continue development of the Black Hawk, Permian and other established projects, as well as begin development of three new fields over the next three years.
“We will invest in oil exploration through the cycle and expect to test three major opportunities in our core basins of Gulf of Mexico, Trinidad and Tobago, and Western Australia over the next three years.”
Cutt said the NW shelf oil play Beagle Sub-Basin was a 25,000 square kilometre position, and described it as a “largely untested teir 1 liquids play”.
BHP has licensed 10,000 square kilometres of multi-client survey in the area, carried out by Polarcus and DownUnder GeoSolutions.
Cutt said so far four leads had been identified which would have the potential for 400 million barrels recoverable.