BHP Billiton has released its operational review for the nine month ended 21 March 2015, posting strong operational performances and improved productivity despite the “impact of subdued commodity prices” in many segments.
The review revealed a 9% increase in group production – well within the projected target of 16% growth in production over the two years to the end of the 2015 financial year – with records achieved for 10 operations and five commodities.
“Our teams continue to exceed expectations and deliver strong operating performance. Our commitment to sustainably improve productivity and lower costs is helping mitigate the impact of subdued commodity prices and supporting returns for our shareholders,” said BHP Billiton Chief Executive Officer, Andrew Mackenzie.
The company’s petroleum production increased 6% to a record 190 million barrels of oil equivalent (MMboe), supported by a 76% increase in Onshore US liquids volumes to 40.2 MMboe.
“In Petroleum, we have responded quickly to current market conditions by reducing the number of rigs operated in our Onshore US business by 35% over the March 2015 quarter. We continue to review our drilling and development program as we seek to maximise the value of our resource base,” Mr Mackenzie said.
“With higher oil prices expected over the medium term, we believe deferring development will create more value than producing today. Our high-quality acreage and excellent operating performance, with industry-leading drilling costs, gives us a strong platform from which to build.”
Copper production increased by 2% to 1.3 metric tonnes (Mt) as strong underlying operating performance at Escondida more than offset the impacts of severe weather in Northern Chile, lower grades at Antamina and a mill outage at Olympic Dam.
BHP said that Western Australia Iron Ore (WAIO) production increased by 16% to a record 188 Mt underpinned by continued improvements in its integrated supply chain, with production for the 2015 financial year now expected to be 250 Mt.
“In Iron Ore, our focus remains on producing at the lowest possible cost with Western Australia Iron Ore unit costs now below US$20 per tonne as we continue to improve productivity. Over the last decade, China’s unprecedented demand growth provided Australia and BHP Billiton with a unique opportunity,” Mr Mackenzie said.
BHP’s metallurgical coal segment posted a 14% increase in production to 38 Mt and reflected record volumes at both Queensland Coal and Illawarra Coal, prompting the company to revise its production target for the 2015 financial year to 49 Mt.
Mr Mackenzie also added that the proposed demerger of South32 was progressing as planned.
“The proposed demerger of South32 is also on track, with the BHP Billiton Board unanimously recommending shareholders vote in favour of the demerger,” he said.
“With a more focused portfolio, BHP Billiton will have the potential to unlock further shareholder value, while creating a new global diversified metals and mining company with a significant industry presence in each of its major commodities.”
