Bhp Group Ltd · ASX:BHP

Bhp — BHP Billiton — Jefferies Energy Conference 2010

40 slides from Bhp's conference presentation, December 2010

  1. Slide 1: BHP Billiton Petroleum – Jefferies Energy Conference

    BHP Billiton Petroleum Jefferies Energy Conference J. Michael Yeager Chief Executive – BHP Billiton Petroleum D December b 2010

  2. Slide 2: Disclaimer

    Disclaimer Reliance on Third Party Information The views expressed here contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This

  3. Slide 3: Agenda

    Agenda  BHP Billiton Corporation overview  Petroleum overview  Petroleum performance  Near N tterm outlook tl k  Longer g term opportunities pp  Summary BHP Billiton Petroleum, Jefferies Energy Conference, December 2010 Slide 2

  4. Slide 4: BHP Billiton Corporation: A global upstream portfolio

    BHP Billiton Corporation A global upstream portfolio Petroleum Aluminium Base Metals A 450mbd oil and gas exploration #4 global producer of bauxite and #4 aluminium #3 global producer of copper, and production business company based on net third party sales silver and lead Diamonds & Specialty Produ

  5. Slide 5: The power and reach of a super major behind BHP Billiton Petroleum

    The power and reach of a super major behind BHP Billiton Petroleum Market Capitalisation at 31 October 2010 (US$bn)  BHP Billiton has the balance sheet to 350 4th largest company in the undertake large and 300 world by market capitalization complex p p projects j 250 200 – Diversified portfolio 150

  6. Slide 6: Petroleum is a significant contributor to the BHP Billiton Group

    Petroleum is a significant contributor to the BHP Billiton Group Underlying EBIT(a) Underlying EBIT margin(a) (FY10 US$ billion) (FY10, (FY10 %) (FY10, 21 $19.7B Metallurgical Coal 34% Metallurgical Coal 18 Manganese M Manganese 33% Ferrous 15 (43.5%) Iron Ore 54% Iron Ore SSM 20% 12 SSM D&SP D&SP 3

  7. Slide 7: Agenda

    Agenda  BHP Billiton Corporation overview  Petroleum overview  Petroleum performance  Near N tterm outlook tl k  Longer g term opportunities pp  Summary BHP Billiton Petroleum, Jefferies Energy Conference, December 2010 Slide 6

  8. Slide 8: Core Strategy

    Core Strategy  Be functionally strong where we compete  Fundamentals focus – safety, volume, cost  Take large, operated positions with multiple long life opportunities  Explore globally globally, but with an emphasis on proven basins  Pursue commercial opportunities that fit and add to corporat

  9. Slide 9: Large Positions

    Large Positions UK P t l Petroleum HQ Algeria Pakistan Gulf of Mexico Trinidad Vietnam Philippines Malaysia Western Australia Bass Strait Producing and development Exploration – Proven Basins BHP Billiton Petroleum, Jefferies Energy Conference, December 2010 Slide 8

  10. Slide 10: Very simple organisational model

    Very simple organisational model Global functional organisation Exploration Development Production Marketing Safety Safety Safety Revenue per barrel Resource adds Development Plans Volumes Finding costs Project Execution Per barrel costs Facilities integrity Global Support Functions (HSEC, Planning,

  11. Slide 11: Two organisational principles

    Two organisational principles Excellence Petroleum Headquarter – Houston  Centralised management/planning  Centralised services  Common worldwide standards  Functional excellence Western Bass Gulf of UK Trinidad Pakistan Algeria Australia Strait Mexico Execution Strong local operating units  Ex

  12. Slide 12: Agenda

    Agenda  BHP Billiton Corporation overview  Petroleum overview  Petroleum performance  Near N tterm outlook tl k  Longer g term opportunities pp  Summary BHP Billiton Petroleum, Jefferies Energy Conference, December 2010 Slide 11

  13. Slide 13: Outstanding performance metrics across the board

    Outstanding performance metrics across the board Four years of annual gains ...  Excellent safety performance  11% CAGR volume growth since FY2007  100% reserves replacement FY2007-FY2010  Low operating cost/boe  Low depreciation p p per barrel for international independent p oil and g gas  Hi

  14. Slide 14: Safety

    Safety Continued focus Total Recordable Incident Frequency Rate (TRIFR) (Incidents per million hours worked) 5  2.36 Total Recordable Incident Rate in FY2010 4  Follows best ever Petroleum performance in 3 FY2009 at 1.9 TRIFR  Part of functional 2 excellence approach  1 LTI in the last 14 months

  15. Slide 15: Safety

    Safety Lost Time Injury performance Source: OGP Independent Study 2009 BHP Billiton (FF) BHP Billiton Petroleum, Jefferies Energy Conference, December 2010 Slide 14

  16. Slide 16: Volume history

    Volume history (mmboe/year)  Excellent FY2010 result 170 – Volume up 15% year on year 160 434 mbd – Base production well 11% CAGR managed with > 93% operated uptime 150  Growth leveraged towards 140 378 mbd liquids and excellent fiscal 354 mbd terms 130  Average 11% growth per 120 318 mbd year si

  17. Slide 17: Operating cost

    Operating cost 3 year average operating cost per boe, FY2008–FY2010 (US$/boe)  Highly competitive unit 15 operating costs 12  Cos Costs s co controlled o ed in a d difficult cu environment 9  Significant focus on the fundamentals 6 – Equipment reliability / p uptime – Maintenance / shutdowns 3 –

  18. Slide 18: Depreciation

    Depreciation Depreciation per boe vs Peer Group, FY2008 - FY2010 (US$/boe) 25  Competitive depreciation per boe despite recent higher 20 cost developments 15  Depreciation per boe Peers remains below US$13 into FY2011 10 BHP Billiton 5 0 FY2008 FY2009 FY2010 Source: Company reports. Data presented

  19. Slide 19: Reserve replacement

    Reserve replacement ((net mmboe)) 180 172 Production Volume* 159 152 Reserves Adds 144 150 138 130 116 120 120 90 60 30 0 FY2007** FY2008 FY2009 FY2010 * Restated Production Volumes between Gas & NGLs **Excludes asset sales. BHP Billiton Petroleum, Jefferies Energy Conference, December 2010 Slide 18

  20. Slide 20: EBIT margin

    EBIT margin 3 year average EBIT per boe, FY2008–FY2010 (US$/boe) 40 30  Liquids priced barrels 20 – FY2006: 62% of 310 mbd 10 – FY2010: 73% of 434 mbd 0 BHP Murphy Hess Apache Devon Anadarko Talisman  Combined with low cash and Billiton non-cash costs for excellent 3 year average EBIT margin, FY20

  21. Slide 21: EBIT return on capital employed

    EBIT return on capital employed 3 year average EROC (%, FY2008–FY2010) 60  Efficient capital investment 50 program 40 – Project costs as planned – Outstanding drilling 30 performance 20  All phases of execution h dl d wellll handled 10 0 BHP Murphy Hess Apache Devon Talisman Anadarko Billiton Sour

  22. Slide 22: Industry leading drilling performance

    Industry leading drilling performance Gulf of Mexico deepwater (>2,000 ft water depth) exploration and appraisal wells, 1/2000 – 11/2009 Days per 1,000 1 000 feet of drilling 8 7 6 5 4 3 2 1 24 106 49 44 42 9 11 13 5 wells wells wells wells wells wells wells wells wells 0 BHP Anadarko Shell BP Chevr

  23. Slide 23: We operate two of the world's deepest TLPs

    We operate two of the world’s deepest TLPs Neptune Shenzi BHP Billiton Petroleum, Jefferies Energy Conference, December 2010 Slide 22

  24. Slide 24: Key messages

    Key messages  Scalable organisation – Highly functional but low cost organisation – Add more barrels without overhead growth  Production growth at 11% CAGR since FY2007 – Projects on time and on budget – Flawless drilling execution  Cost control – Low operation costs – Focused on the basics  EBI

  25. Slide 25: Agenda

    Agenda  BHP Billiton Corporation overview  Petroleum overview  Petroleum performance  Near N tterm outlook tl k  Longer g term opportunities pp  Summary BHP Billiton Petroleum, Jefferies Energy Conference, December 2010 Slide 24

  26. Slide 26: Ongoing Programs and Projects

    Ongoing Programs and Projects Oil Gas LNG UK Liverpool Bay (46.1%) • Beginning gas blowdown Pakistan Zamzama (38.5%) • Front-end Compression Gulf of Mexico North West Shelf (16.67%) Petroleum HQ North Rankin B Atlantis (44.0%) • New compression platform • South infill drilling and Water CWLH Life Ex

  27. Slide 27: Atlantis

    Atlantis 2nd largest field in Gulf of Mexico Oil In Place ?  Development drilling expected to re- commence in FY11  Initial 2 North wells indicate strong production potential South North East  South water injection project in progress  East appraisal in FY2012 East North S th South BHP Billiton

  28. Slide 28: Shenzi

    Shenzi  Design capacity of 100 mbd  Initial production 140 mbd  20 months into production and still over 90 mbd  Water W injection i j i project j iin progress and on schedule North  Drilling D illi off additional dditi l up-dip di wells ll into new reservoirs to follow East West B101 I5 I-5 

  29. Slide 29: Pyrenees

    Pyrenees Ownership: BHPB (Operator) 71.43% Apache 28.57% Water Depth: 180-220 m First Oil: Feb 2010  One of Australia’s largest subsea projects  First BHP Billiton Petroleum FPSO fabricated in China  Started up in February on schedule and budget  Ramped up to nameplate capacity (96 mbd) in 11 da

  30. Slide 30: FY2011 production outlook

    FY2011 production outlook (mmboe) FY2011 outlook 170  Full year of Pyrenees volume Moratorium 160 volume deferrals  Angostura Gas project start-up start up 150  Continued growth impacted by 140 g moratorium in the Gulf of drilling Mexico – high rate wells deferred 130  Volumes projected flat for

  31. Slide 31: Agenda

    Agenda  BHP Billiton Corporation overview  Petroleum overview  Petroleum performance  Near N tterm outlook tl k  Longer g term opportunities pp  Summary BHP Billiton Petroleum, Jefferies Energy Conference, December 2010 Slide 30

  32. Slide 32: Significant resource position for long term growth

    Summary Significant resource position for long term growth Reserves and Resources 3,715 mmboe (mmboe, as at 30 Jun 2010) 5,000 Gas 4,500 Forecast Capital Expenditure for Oil Probable Reserves plus Browse and Scarborough Contingent Resources 4,000 (US$bn) 2,231 mmboe 2.5 3,500 Browse Scarborough 2.0

  33. Slide 33: High impact pre-development projects

    High impact pre-development projects Oil Gas LNG Petroleum HQ Western Australia Scarborough North West Shelf Thebe NWS Greater Western Flank Gulf of Mexico Browse Gas fields development M dD Mad Dog Ph Phase 2 New Host facility and development wells Atlantis North Phase 2B Additional subsea manifold

  34. Slide 34: Mad Dog: Continues to get bigger

    Mad Dog Continues to get bigger North & Graben Oil In Place Appraisal Potential ? North West - Producing East West South North Spar Location  Current Spar p cannot drain all discovered oil to date West East – West and South areas cannot be fully reached East - Producing – Optimised development sche

  35. Slide 35: Browse LNG – long term growth opportunity

    Browse LNG – long term growth opportunity Torosa Brecknock Calliance  Three large gas fields with 14 tcf recoverable reserves ((Source: Wood Mackenzie))  Retention Lease accepted with Derby Gas fields commitment to US$1.25 US$1 25 billion work program (100%)  Basis of Design work started for upst

  36. Slide 36: Scarborough/Thebe – long term growth opportunity

    Scarborough/Thebe – long term growth opportunity  High equity giant gas fields with 10 tcf WA 346 P WA-346-P recoverable reserves in area – Thebe 100% BHP Billiton Gas fields – Scarborough 50% BHP Billiton Thebe Scarborough  US$15-20 billion dollar investment (100%) expected for development of ups

  37. Slide 37: Multi-year exploration drilling program underway

    Multi-year exploration drilling program underway Focus on proven basins Exploration Strategy  Material in size to BHP Billiton  Balance proven plays and frontier exploration  Opportunities with potential for multiple successes  Control and Operatorship South China Sea Gulf of Mexico 5+ wells 5+

  38. Slide 38: Agenda

    Agenda  BHP Billiton Corporation overview  Petroleum overview  Petroleum performance  Near N tterm outlook tl k  Longer g term opportunities pp  Summary BHP Billiton Petroleum, Jefferies Energy Conference, December 2010 Slide 37

  39. Slide 39: Summary: Key messages

    Summary Key messages  An integral part of BHP Billiton Group – Strong performance in key commodity – Strong functional capability  Performance – Safety, volumes, cost – outstanding metrics – Highly competitive versus peers  Nearer term – Near-term volumes impacted by the GOM moratorium, but retur

  40. Slide 40: BHP Billiton – resourcing the future

    él ohpbilliton resourcing the future

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