Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Investor Day (October 2014)
104 slides from Bhp's investor day presentation, Oct 27, 2014
Slide 1: Capital Markets Day Presentations cover note
Company Secretariat BHP Billiton Limited BHP Billiton Plc 171 Collins Street Neathouse Place Melbourne Victoria 3000 Australia London SW1V 1LH UK GPO BOX 86 Tel +44 20 7802 4000 Melbourne Victoria 3001 Australia Fax + 44 20 7802 4111 For personal use only Tel +61 1300 55 47 57 Fax +61 3 9609 3015 bh
Slide 2: News Release: Maximising value and shareholder returns
NEWS RELEASE For personal use only Release Time IMMEDIATE Date 27 October 2014 Number 20/14 MAXIMISING VALUE AND SHAREHOLDER RETURNS BHP Billiton today explained how with a simpler portfolio it will maximise value and shareholder returns by reducing operating costs and improving capital efficiency.
Slide 3: News Release (continued)
Mr Mackenzie said: “We see our capital management strategy as a precondition to maximising shareholder value. It has allowed us to invest through the cycle and grow our dividend at an average annual rate of 17 per cent over the last decade without interruption. “Our core portfolio includes a suite o
Slide 4: Media and Investor Relations contacts
Further information on BHP Billiton can be found at: www.bhpbilliton.com. Media Relations Investor Relations For personal use only Australia Australia Emily Perry Tara Dines Tel: +61 3 9609 2800 Mobile: +61 477 325 803 Tel: +61 3 9609 2222 Mobile: +61 499 249 005 email: Emily.Perry@bhpbilliton.com e
Slide 5: Maximising value and shareholder returns
For personal use only Western Australia Iron Ore Maximising value and shareholder returns 27 October 2014
Slide 6: Disclaimer
Disclaimer For personal use only Forward-looking statements This presentation contains forward-looking statements, which may include statements regarding: trends in commodity prices and currency exchange rates; demand for commodities; plans, strategies and objectives of management; closure or divest
Slide 7: Disclaimer (continued)
Disclaimer (continued) For personal use only Non-IFRS financial information BHP Billiton results are reported under International Financial Reporting Standards (IFRS) including Underlying EBIT and Underlying EBITDA which are used to measure segment performance. This release may also include certain
Slide 8: Agenda
Agenda For personal use only Maximising value and shareholder returns Andrew Mackenzie Chief Executive Officer Marketing: Uniquely placed to resource the future Mike Henry President – HSE, Marketing and Technology Productivity: Our pursuit of continuous Mike Henry improvement President – HSE, Market
Slide 9: Maximising value and shareholder returns - Andrew Mackenzie
For personal use only Escondida Maximising value and shareholder returns Andrew Mackenzie Chief Executive Officer 27 October 2014
Slide 10: Key themes
Key themes For personal use only • We are delivering on our commitments • A simplified portfolio will deliver stronger growth and margins • Safety is paramount • Managing our assets in a sustainable way for the benefit of all stakeholders • We are positioned for another year of record production • T
Slide 11: We are delivering on our commitments
We are delivering on our commitments For personal use only Our FY14 scorecard Portfolio simplification • Announced proposed demerger having completed more than US$6.5 billion in divestments over the last two years at attractive valuations • Record low Total Recordable Injury Frequency of 4.2 per
Slide 12: A simpler and more productive organisation
A simpler and more productive organisation For personal use only BHP Billiton core portfolio1 Under review Operated Non-operated Minerals Western Australia Olympic Dam Escondida Pampa Norte Samarco Antamina Nickel West Iron Ore Queensland Coal2 NSW Energy Coal Jansen project Cerrejón New Mexico Coal
Slide 13: An even stronger and higher margin business
An even stronger and higher margin business For personal use only • The core portfolio generated stronger Optimal diversification for our core portfolio performance compared with the broader (FY14 revenue3, %) portfolio over the last 10 years Coal – production CAGR1 of 7% (versus 4%) – Underlying EB
Slide 14: The creation of a new high-quality global metals and mining company
The creation of a new high-quality global metals and mining company For personal use only NewCo • It is intended that NewCo would – be an Australian incorporated company listed on the Australian Securities Exchange (ASX) – have an inward secondary listing GEMCO Worsley Cannington on the Johannesburg
Slide 15: Safety is paramount
Safety is paramount For personal use only Total Recordable Injury Frequency (TRIF) (number of recordable injuries per million hours worked) 10 8 down 51% 6 4 2 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Andrew Mackenzie, Chief Executive Officer, 27 October 2014 Slide 11
Slide 16: Managing our assets in a sustainable way for the benefit of all stakeholders
Managing our assets in a sustainable way for the benefit of all stakeholders For personal use only • We aim to minimise our environmental impacts Minimising our greenhouse gas emissions2 and deliver enduring benefits to biodiversity, (Mt CO2-e) ecosystems and other environmental resources 60 FY06 ba
Slide 17: Managing our assets in a sustainable way for the benefit of all stakeholders
Managing our assets in a sustainable way for the benefit of all stakeholders For personal use only • We engage regularly and openly with those interested in and affected by our operations • We support partnerships that promote social and economic development for the benefit of the broader community
Slide 18: Delivering more volume from existing infrastructure and growth projects
Delivering more volume from existing infrastructure and our growth projects ahead of schedule For personal use only • Total production1 increased by 9% in FY14 or 15% Strong growth for our major commodities from the core portfolio (production volumes, % change, FY14 versus FY13) – guidance exceeded
Slide 19: Positioned for another year of record production
Positioned for another year of record production For personal use only • Our core portfolio is on track to deliver Production1 growth from our core portfolio production1 growth of 23% over the two years to (FY13 to FY15, %) the end of FY15 or 16% from the broader portfolio Petroleum liquids • The ra
Slide 20: Cost efficiencies of US$1.9 billion delivered in FY14
Cost efficiencies of US$1.9 billion delivered in FY14 For personal use only • Our commitment to further improve the Cost efficiencies delivered competitive position of our assets underpinned a (FY14 , US$ billion) US$1.9 billion reduction in controllable cash costs 3.0 in FY14 – Queensland Coal unit
Slide 21: Targeting at least another US$3.5 billion of productivity-led gains
Targeting at least another US$3.5 billion of productivity-led gains from our core portfolio For personal use only Productivity-led volume and cost efficiencies1 (US$ billion) 4.0 Volume 3.0 2.0 A minimum US$2.3 billion per annum reduction in Cash costs cash costs is embedded in our three year plan 1
Slide 22: Iron Ore: increasing the value of already installed infrastructure
Iron Ore: increasing the value of already installed infrastructure For personal use only • We plan to increase WAIO supply chain capacity Targeting 11% growth in volumes to 290 Mtpa1,2 by the end of FY17 at very low (Mt) capital cost 250 200 – increase in mine output to ~275 Mtpa1 for no additional
Slide 23: Petroleum: a clear strategy focused on value over volume
Petroleum: a clear strategy focused on value over volume For personal use only • Prioritising the highest return opportunities in our Targeting 15% growth in liquids volumes Petroleum business (MMboe) 300 – investment in our shale liquids acreage Liquids Gas generates strong investment returns, 225
Slide 24: Copper: lowering unit costs despite grade decline
Copper: lowering unit costs despite grade decline For personal use only • We have a high-value suite of development Targeting 5%3 growth in volumes opportunities in our copper portfolio (kt) 2,000 – evaluating the option to run three concentrators in parallel at Escondida 1,500 – the hypogene resour
Slide 25: Coal: moving sharply down the cost curve
Coal: moving sharply down the cost curve For personal use only • The successful delivery of our growth projects Targeting 4% growth in metallurgical coal volumes has added high-quality metallurgical coal (Mt) capacity 150 Metallurgical coal Energy Coal • We have closed 6.8 Mtpa1 of our highest-cost
Slide 26: Our framework to maximise shareholder returns
Our framework to maximise shareholder returns For personal use only • Our purpose when allocating capital is to maximise total shareholder returns • Our strategy is to own and operate large, long-life, low-cost, expandable, upstream assets diversified by commodity, geography and market • Our capital
Slide 27: Our strong balance sheet ensures access to capital at lower cost
Our strong balance sheet ensures we have access to capital at a consistently lower cost For personal use only Return excess Strong balance • We remain committed to our solid A credit to shareholders sheet & solid A rating credit rating – we manage to a single A1 or A21 through the cycle by consideri
Slide 28: An unbroken dividend with a higher growth rate
An unbroken dividend with a higher growth rate For personal use only Strong balance Return excess sheet & solid A • By having a strong balance sheet and to shareholders credit rating investing in our best businesses we have delivered superior growth in our base dividend – increased at a CAGR of 17%1
Slide 29: Disciplined investment process to maximise value and returns
Disciplined investment process to maximise value and returns For personal use only Strong balance Return excess sheet & solid A • Our rigorous process considers all to shareholders credit rating alternatives for capital – continued investment in our business – portfolio simplification – the growth r
Slide 30: Improving capital productivity
Improving capital productivity For personal use only • Our opportunity-rich portfolio remains a key point of differentiation • By operating within a disciplined framework Maximise and by testing all investment decisions against shareholder challenging criteria we will increase the capital returns ef
Slide 31: Our strategy and strong balance sheet have delivered superior returns
Our strategy and strong balance sheet have delivered superior returns for our shareholders For personal use only Strong balance Key enablers for total shareholder returns Return excess sheet & solid A to shareholders credit rating BHP Metrics over 10 Billiton Peer Peer years1 A+ A- BBB Cost of fundi
Slide 32: Key themes
Key themes For personal use only • We are delivering on our commitments • A simplified portfolio will deliver stronger growth and margins • Safety is paramount • Managing our assets in a sustainable way for the benefit of all stakeholders • We are positioned for another year of record production • T
Slide 33: For personal use only
édl bhpbilliton resourcing the future
Slide 34: Uniquely placed to resource the future
For personal use only Nelson Point Uniquely placed to resource the future Mike Henry President – HSE, Marketing and Technology 27 October 2014
Slide 35: Disclaimer
Disclaimer For personal use only Forward-looking statements This presentation contains forward-looking statements, which may include statements regarding: trends in commodity prices and currency exchange rates; demand for commodities; plans, strategies and objectives of management; closure or divest
Slide 36: Key themes
Key themes For personal use only • Virtuous cycle of industrialisation, urbanisation and consumption in emerging economies is expected to continue to underpin long-term commodities demand growth • We retain a margin advantage for our steelmaking raw materials based on our quality and cost position •
Slide 37: We consider divergent yet plausible scenarios in our portfolio decisions
We consider divergent yet plausible scenarios in our portfolio decisions For personal use only • Our corporate planning process is Scenario analysis underpinned by scenario analysis – encompasses a spectrum of potential outcomes for key global uncertainties – considers technical, economic, political
Slide 38: Emerging economies will continue to drive global growth and commodities demand
Emerging economies will continue to drive global growth and commodities demand For personal use only • Demand for our commodities continues to be Continued momentum in the emerging economies… strong, underpinning the long-term outlook (GDP, US$ trillions, 2010 Purchasing Power Parity) for our portfo
Slide 39: The urbanisation and industrialisation of the developing world is far from complete
The urbanisation and industrialisation of the developing world is far from complete For personal use only • Urbanisation and industrialisation in the Urbanisation rates 2015-50 UN projected increase in developing world continues to underpin (%) urban population 2015-50 commodities demand 100 0.2bn –
Slide 40: We retain a margin advantage for our steelmaking raw materials
We retain a margin advantage for our steelmaking raw materials For personal use only Iron ore The iron ore cost curve is flattening (CIF China equivalent basis, US$/t, nominal) • Growth in low-cost seaborne supply will continue to outpace demand and the cost curve will flatten CY13 CY15 • Longer ter
Slide 41: Copper will remain supply constrained and a deficit is expected beyond 2018
Copper will remain supply constrained and a deficit is expected beyond 2018 For personal use only • The outlook for copper demand remains Strong consumption growth from Asia (ex-Japan) compelling as emerging economies (copper semis, Mt) transition to consumption-led growth 30 – Chinese copper semis
Slide 42: Energy demand growth will remain positive
Energy demand growth will remain positive… For personal use only • Increasing energy demand is projected under a The global energy complex will remain diverse variety of scenarios, with electrification and (growth in primary energy supply, index, 2010=100) transport leading the growth 140 • Electric
Slide 43: Shape of future energy demand is difficult to predict
… although the shape of future energy demand is difficult to predict For personal use only • Asia is expected to account for two thirds Energy balances by region of energy demand growth to 2030 – growth in China and India will be CIS equivalent to current US energy Asia demand Europe North America 2
Slide 44: Population growth and higher protein diets will require more productive crops
Population growth and the shift towards higher protein diets will require more productive crops For personal use only • The long-term demand fundamentals for People fed per hectare of arable land agricultural products remain attractive (number of people) 5.1 – growing global population 4.5 4.8 4.0 –
Slide 45: A diversified portfolio resourcing the future
A diversified portfolio resourcing the future For personal use only • Our core portfolio1 reflects our differentiated Diversified by commodity, geography and market strategy (core portfolio, FY14 % contribution) 100 RoW Coal North – large, long-life, low-cost, expandable, North America America Austr
Slide 46: Key themes
Key themes For personal use only • Virtuous cycle of industrialisation, urbanisation and consumption in emerging economies is expected to continue to underpin long-term commodities demand growth • We retain a margin advantage for our steelmaking raw materials based on our quality and cost position •
Slide 47: For personal use only
édl bhpbilliton resourcing the future
Slide 48: Our pursuit of continuous improvement
Western Australia Iron Ore For personal use only Our pursuit of continuous improvement Mike Henry President – HSE, Marketing and Technology 27 October 2014
Slide 49: Disclaimer
Disclaimer For personal use only Forward-looking statements This presentation contains forward-looking statements, which may include statements regarding: trends in commodity prices and currency exchange rates; demand for commodities; plans, strategies and objectives of management; closure or divest
Slide 50: Key themes
Key themes For personal use only • Our culture underpins safe and productive operations • The BHP Billiton Operating Model supports continuous performance improvement • Our common systems and processes allow us to accelerate the replication of best practice • We have a structured approach to product
Slide 51: Our productivity agenda is delivering strong results
Our productivity agenda is delivering strong results and will maximise value for shareholders For personal use only Our performance focus Equipment • We aim to sustainably realise the full potential Productivity of our assets for maximum value creation People Continuous Maximise • We have a structur
Slide 52: Our culture underpins safe and productive operations
Our culture underpins safe and productive operations For personal use only Our culture and capability Key aspects of our culture • Our people strategy complements our Operating Organisation Model Design Operating Model Optimisation Protocol – senior leaders are committed to all aspects that drive ou
Slide 53: Our Operating Model supports continuous improvement
Our Operating Model supports continuous improvement For personal use only Our Operating Model We are structured for maximum efficiency (operation structure) • A simple and scalable organisational design GM to deliver sustainable performance Senior Manager • Defines how we work, how we are organised
Slide 54: Common systems and processes accelerate replication of best practice
Our common systems and processes allow us to accelerate replication of best practice For personal use only • Our integrated management systems provide We are standardising our maintenance activities… a rich data source (maintenance work orders1 with standardised task lists2, ‘000s) 250 – we measure,
Slide 55: Equipment: availability, utilisation and rate
Equipment: availability, utilisation and rate For personal use only • We relentlessly target our bottlenecks Utilising the power of data (truck utilisation3, %) – a 6% increase in total asset utilisation1 underpinned a 9% increase in Group production2 in FY14 FY13 • We benchmark the performance of o
Slide 56: People: building the right capability and culture
People: building the right capability and culture For personal use only • People productivity is a key value driver We have significantly reduced our labour cost… (US$ billion) – labour1 represented 41% of our operating cost 40 base in FY14 30 – we reduced our total labour spend by 10% in 54% 59% FY
Slide 57: Supply: reducing total cost of ownership
Supply: reducing total cost of ownership For personal use only • We are extending the life of consumables and Supply cost savings have exceeded targets pursuing opportunities identified through (US$ billion) benchmarking to reduce overall supply costs 2.0 – procurement cost savings of US$1.6 billion
Slide 58: Capital: competition for capital and improved processes have increased project returns
Capital: competition for capital and improved processes have increased project returns For personal use only • Our opportunity-rich portfolio is a key Major capital cost predictability2 differentiator and underpins an internal focus Proportion of • We have improved our processes and projects executi
Slide 59: Marketing: realising full value for our products
Marketing: realising full value for our products For personal use only • Our marketing team is a major contributor to Improved sales forecast accuracy with lower variability the Group’s productivity agenda (% actual vs forecast, sales volumes for all commodities) – we are increasing volumes through
Slide 60: Our pursuit of continuous improvement
Our pursuit of continuous improvement For personal use only • Our structured approach to performance Over US$6.6bn of productivity gains embedded… improvement is creating value (relative to FY12 baseline, US$ billion) 12 – productivity-led volume and cost efficiencies of US$2.9 billion achieved in 8
Slide 61: Key themes
Key themes For personal use only • Our culture underpins safe and productive operations • The BHP Billiton Operating Model supports continuous performance improvement • Our common systems and processes allow us to accelerate the replication of best practice • We have a structured approach to product
Slide 62: For personal use only
édl bhpbilliton resourcing the future
Slide 63: Safely growing production while lowering costs
Newman For personal use only Safely growing production while lowering costs Jimmy Wilson President – Iron Ore 27 October 2014
Slide 64: Disclaimer
Disclaimer For personal use only Forward-looking statements This release contains forward-looking statements, including statements regarding: trends in commodity prices and currency exchange rates; demand for commodities; plans, strategies and objectives of management; closure or divestment of certa
Slide 65: Disclaimer (continued)
Disclaimer (continued) For personal use only Ore Reserves, Mineral Resources and Exploration Targets The information in this presentation that relates to the FY2014 Western Australia Iron Ore (WAIO) Ore Reserves, Mineral Resources (inclusive of Ore Reserves) and Exploration Targets was first reporte
Slide 66: Key themes
Key themes For personal use only • We value safe and sustainable operations above all else • We have the strongest resource position in the Pilbara • A relentless focus on availability, utilisation and rate is enhancing performance across our integrated supply chain • We are targeting FOB unit costs
Slide 67: Iron Ore – a key pillar of BHP Billiton
Iron Ore – a key pillar of BHP Billiton For personal use only • Our Iron Ore business, comprising Western A major contributor to production Australia Iron Ore (WAIO) and Samarco, has (% of BHP Billiton production1) delivered exceptional returns over the last 100 five years 75 – 22% of total BHP Bill
Slide 68: We have the strongest resource position in the Pilbara
We have the strongest resource position in the Pilbara For personal use only • Our Pilbara Mineral Resource has tripled1 in WAIO mineral inventory2,3,4 (billion wet tonnes, 100% basis) size during the last seven years 80 – Resources of 23 Bt inclusive of Exploration Targets (mid) Reserves of 3.7 Bt2
Slide 69: The characteristics of our ore bodies support high-margin operations
The characteristics of our ore bodies support high-margin operations For personal use only • Our ore bodies underpin low cost operations Port Hedland – a low strip ratio of 1.3x Finucane Island – current operations are primarily above Nelson Point the water table and only 2% of Yarrie production is
Slide 70: Fully integrated supply chain from mine to rail to port
At WAIO we operate a fully integrated supply chain from mine to rail to port Integrated Remote Operations Centre For personal use only Synchron- Flow Balance isation Focus at Mines Focus at Rail Focus at Port Enable SL1 utilisation – Target the Enable SL1 utilisation – Target the Lifting SL1 utilisa
Slide 71: Availability, utilisation and rate have raised mines performance
Focus on availability, utilisation and rate has raised mines performance For personal use only • Availability of mine reclaimers and train WAIO OHP processing rate1 load-outs has increased, improving supply (hourly production rate3, tonnes) chain performance 6% 6% – centralised shutdown management h
Slide 72: Availability, utilisation and rate have raised rail performance
Focus on availability, utilisation and rate has raised rail performance For personal use only • Availability of rail has increased Train departures per day are increasing (index, June 2013 = 100) – completion of track ballast remediation 130 project has improved track availability and extended track
Slide 73: Availability, utilisation and rate have raised port capability
Focus on availability, utilisation and rate has raised port capability For personal use only • Availability of car dumpers and shiploaders Total car dumper utilisation has increased following changes to our (index, July 2013 = 100) maintenance strategy 130 – 50% reduction in electrical delays over t
Slide 74: Technology is a key productivity enabler
Technology is a key productivity enabler For personal use only • Our technology agenda underpins the path to 290 Mtpa1 and beyond – disciplined and value-based approach to technology driven by the business strategy • Key technology enablers – our fully functioning Integrated Remote Operations Centre
Slide 75: Targeting FOB unit cash costs of less than US$20 per tonne
Targeting FOB unit cash costs of less than US$20 per tonne For personal use only • As production grows we will maintain a A significant reduction in WAIO unit costs1 relentless focus on costs (US$/t) 30 – strong early momentum as we reduced unit cash costs1 by 12% in H2 FY14 to US$25.89/t 25 • We ar
Slide 76: Our plans are built from the bottom up
Our plans are built from the bottom up For personal use only • We are systematically targeting cost savings The pathway to unit cash costs below US$20/t1 across the supply chain (split of cost reduction, %) 100 – equipment productivity is reducing demand for new equipment and enabling 75 a reduction
Slide 77: A proven track record of project delivery
A proven track record of project delivery For personal use only • Over the last decade we invested Outstanding project delivery capability2 US$25 billion in the Pilbara (production1, Mt) Jimblebar commissioned 250 ahead of schedule • As a result we have more than doubled iron ore production in a str
Slide 78: Plan to grow WAIO production at low capital intensity
We plan to grow WAIO production by 65 Mtpa at a capital intensity of ~US$30 per annual tonne For personal use only Delivering value from our installed infrastructure1 (Mtpa, 100% basis) Debottleneck Fully utilise inner harbour 1 2 capacity inner harbour 290 270 245 225 Optimisation Future projects2
Slide 79: Raising the capacity of our mines without fixed plant investment
Step 1 to 290 Mtpa – raising the capacity of our mines without fixed plant investment For personal use only • WAIO production is expected to increase by Re-rating our hub capacity1 20 Mt to 245 Mt1 in FY15 (FY15 baseline, Mtpa) 30 • Beyond FY15 our relentless focus on productivity will deliver volum
Slide 80: Investing in IHD1 and Jimblebar Phase 2
Step 2 to 290 Mtpa – investing in IHD1 and Jimblebar Phase 2 For personal use only • The two key components to the second step of growth to 290 Mtpa1 have a low capital cost and offer attractive investment returns • Inner Harbour Debottlenecking 1 will deliver ~20 Mtpa1 of incremental port capacity
Slide 81: Key themes
Key themes For personal use only • We value safe and sustainable operations above all else • We have the strongest resource position in the Pilbara • A relentless focus on availability, utilisation and rate is enhancing performance across our integrated supply chain • We are targeting FOB unit costs
Slide 82: For personal use only
édl bhpbilliton resourcing the future
Slide 83: Onshore US: A high-quality portfolio optimised for value
For personal use only Onshore US A high-quality portfolio optimised for value Tim Cutt President – Petroleum and Potash October 2014
Slide 84: Disclaimer
Disclaimer For personal use only Forward-looking statements This release contains forward-looking statements, including statements regarding: trends in commodity prices and currency exchange rates; demand for commodities; plans, strategies and objectives of management; closure or divestment of certa
Slide 85: Disclaimer (continued)
Disclaimer (continued) For personal use only Petroleum resources The estimates of petroleum reserves and contingent resources contained in this presentation are based on, and fairly represent, information and supporting documentation prepared under the supervision of Mr. A. G. Gadgil, who is employe
Slide 86: Key themes
Key themes For personal use only • We have a clear strategy focused on value over volume • Our Petroleum portfolio is underpinned by large, high-quality, upstream assets • High-return brownfield investments will maintain stable Conventional volumes • Liquids opportunities with Tier-1 potential are t
Slide 87: A large, high-quality, upstream petroleum portfolio
A large, high-quality, upstream petroleum portfolio For personal use only Underlying EBIT & EBITDA margin (US$ billion) (margin, %) 35 100 28 80 21 60 14 40 7 20 0 0 FY11 FY12 FY13 FY14 Onshore US Petroleum BHP Billiton Petroleum Underlying EBITDA margin1 Gulf of Mexico Trinidad & Tobago Bubble size
Slide 88: High-return brownfield Conventional investments will offset natural field decline
High-return brownfield Conventional investments will offset natural field decline For personal use only • Australia and the Gulf of Mexico are our core Stable conventional volumes regions with valuable infrastructure in place (MMboe) 150 • Capital expenditure of ~US$1.5 billion per annum is expected
Slide 89: Our focused exploration program
Our focused exploration program For personal use only Tier-1 exploration criteria World-class source rock North America Shale Big reservoir system • Extending our liquids runway Large traps Acceptable fiscal terms Gulf of Mexico • US: Progress plays with Tier-1 potential Early-mover • Mexi
Slide 90: Tier-1 oil potential in Trinidad and Tobago
Tier-1 oil potential in Trinidad and Tobago For personal use only BHP Billiton Blocks • We have an established operational Seismic survey presence in Trinidad and Tobago with our Bathymetry map shallow water Angostura asset Oil / gas production 28 29 • The deepwater is largely untested and 23a 14 ha
Slide 91: Leveraging our Gulf of Mexico expertise
Leveraging our Gulf of Mexico expertise For personal use only • Recently executed Memorandum of Understanding with Pemex1 to exchange USA Haynesville technical knowledge and expertise • The Gulf of Mexico (GoM) basin is the third highest oil producing basin in the world2 Eagle Ford Shenzi • We produ
Slide 92: We have proven project development capability
We have proven project development capability For personal use only Macedon Liverpool Liverpool Bay Bay Zamzama Angostura Neptune Pyrenees Neptune 1996 2003 2005 2008 2010 2013 1994 2003 2007 2009 Ohanet Griffin Stybarrow Shenzi BHP Billiton operated assets Tim Cutt, President - Petroleum and Potash
Slide 93: Development options competing for capital
Development options competing for capital For personal use only Mad Dog Phase 2 North • One of the largest discovered, undeveloped oil reservoirs in the Gulf of Mexico Mad Dog West A Spar • Partnership is aligned on a semi-submersible Phase 2 FPU East floating production unit (FPU) concept • BHP Bil
Slide 94: Onshore US is primed to generate strong growth in free cash flow
Onshore US is primed to generate strong growth in free cash flow For personal use only • We have a premier acreage position over Focused on developing our liquids-rich areas multiple shale plays (gross operated rigs) 45 • Strong financial performance will be supported FY14 by continued growth in liq
Slide 95: Driving improved capital efficiency through productivity
Driving improved capital efficiency through productivity For personal use only • Repetitive, manufacturing nature of shale is Black Hawk drilling time per well1 ideally suited to our productivity agenda (days) 21% • Application of technology will ensure we achieve the best recoveries while being cos
Slide 96: We are the top performer in Black Hawk recovered reserves
We are the top performer in Black Hawk recovered reserves For personal use only Black Hawk producing wells2 • Using low-cost initiatives to maximise recoveries and unlock substantial value Gonzales – restricted flows – optimal stage spacing Wilson – efficient proppant placement DeWitt • We are best
Slide 97: Building momentum in the Black Hawk
Building momentum in the Black Hawk For personal use only • We are a top producer in the Eagle Ford with Black Hawk production rates2 investment prioritised on liquids-rich acreage (gross, kboe/d) – ~75% of our Onshore US drilling and 200 development expenditure in FY14 was 150 focused on the Eagle
Slide 98: Extending our liquids runway in the Permian
Extending our liquids runway in the Permian For personal use only • We are leading the appraisal of the Upper Wolfcamp well performance3 Wolfcamp with more than 75 wells drilled (gross production, boe/d) 2,500 2,500 to date 2,000 2,000 – extensive vertical and lateral appraisal 1,500 1,500 of the re
Slide 99: Generating strong returns at current prices in the Haynesville
Generating strong returns at current prices in the Haynesville For personal use only • We have the premier acreage position in one Potential for higher EUR from optimised completions of the most productive US shale gas plays (gross production, MMcf/d) 10 – 370 net shale producing wells as at 30 June
Slide 100: Simplifying the portfolio for value
Simplifying the portfolio for value For personal use only • We manage the portfolio for value BHP Billiton petroleum resource (billion boe) – extending our liquids runway in our Shale 12 business through acreage optimisation – targeted exploration program pursuing Tier-1 Conventional oil opportuniti
Slide 101: Key themes
Key themes For personal use only • We have a clear strategy focused on value over volume • Our Petroleum portfolio is underpinned by large, high-quality, upstream assets • High-return brownfield investments will maintain stable Conventional volumes • Liquids opportunities with Tier-1 potential are t
Slide 102: For personal use only
édl bhpbilliton resourcing the future
Slide 103: Glossary of selected terms
Glossary of selected terms For personal use only Reserves Those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Reserves must further satisfy four criteria: They must
Slide 104: For personal use only
édl bhpbilliton resourcing the future