BHP Gas Production Down 10%
Australia-based mining group BHP Billiton has reported a 10% decline in natural gas production in the 12-month period from July 2016 to June 2017 to 668bn ft3 (1.83bn ft3/d), mainly due to a decline in US shale gas production, but also because of the divestment of Pakistan upstream gas business.
Deferral of onshore US gas development activity were partially offset, said BHP, by strong production at its Bass Strait and Macedon gas fields plus increased LNG production volumes at the North West Shelf (NWS), all three in Australia.
Three months ago BHP said it had put its Fayetteville shale gas asset in Arkansas back up for sale.
Overall, BHP's oil and gas production decreased by 13% in the 12 months to June 2017 to 208mn barrels of oil equivalent, it said July 19. It forecasts this will fall further to 180-190mn boe in the 12 months to June 2018 -- of which onshore US volumes are expected to decline to 61-67mn boe as production from the phased ramp up of development activity is more than offset by field declines.
Nor is it only a story of shale gas declines: in BHP’s conventional business, volumes are expected to fall to 119-123mn boe in the 12 months to June 2018 as infill and brownfield projects are more than offset by planned maintenance at the US offshore Mad Dog oilfield and natural field declines.
BHP's overall gas production in the April-June 2017 quarter was 6% lower year-on-year at 167bn ft3 (1.84bn ft3/d).
Turning to gas developments, BHP said that a US$314mn project to develop new fields at NWS's Greater Western Flank-B, in order to maintain LNG throughput at NWS LNG, is 47%-completed and on schedule to reach initial production in 2019. BHP has a 16.67% non-operating interest in the expansion project, which is Woodside-operated.
Shardul Sharma