BHP Group PLC Petroleum briefing

Fecha : 11/11/2019 @ 01:00
Fuente : UK Regulatory (RNS & others)
Emisora : Bhp Group Plc (BHP)
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BHP Group PLC Petroleum briefing

TIDMBHP

RNS Number : 8864S

BHP Group PLC

10 November 2019

 
Issued by:    BHP Group Plc 
Date:         11 November 2019 
To:           London Stock Exchange 
               JSE Limited 
For Release:  Immediately 
Contact:      Helen Ratsey +44 (0) 20 7802 7540 
------------  --------------------------------- 
 
               Petroleum briefing 
----------------------------------------------- 
 

UK Listing Authority Submissions

The following document has today been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.morningstar.co.uk/uk/NSM

   -     Petroleum briefing 

The document will also shortly be available via BHP's website: bhp.com

The meeting will be webcast at: https://edge.media-server.com/mmc/p/362g83wf

Further information on BHP can be found at bhp.com.

BHP Group plc Registration number 3196209

LEI 549300C116EOWV835768

Registered in England and Wales

Registered Office: Nova South, 160 Victoria Street

London SW1E 5LB United Kingdom

A member of the BHP Group which is headquartered in Australia

NEWS RELEASE

 
Release Time     IMMEDIATE 
Date             11 November 2019 
Release Number   21/19 
 
 

Petroleum briefing

BHP President Operations Petroleum, Geraldine Slattery, today said Petroleum is set to deliver strong returns and contribute significant value for BHP through the 2020s and beyond, built on a foundation of quality assets, and attractive growth options.

Speaking to investors and analysts at a briefing in Sydney, Ms Slattery said Petroleum is a great business with competitive growth potential and is aligned with BHP's strategy of being in the best commodities, with the best assets, enabled by the best culture and capabilities. Petroleum has delivered strong financial performance over many years and this is set to continue.

"In a decarbonising world, deepwater oil and advantaged gas close to established infrastructure can offer competitive returns for decades to come."

Ms Slattery outlined a scenario(1) that could potentially:

- Generate robust EBITDA margins of more than 60 per cent and an average Return on Capital Employed of more than 15 per cent over the next decade;

- Deliver average Internal Rates of Return of around 25 per cent for major projects, which are resilient through cycles; and

- Support an average annual volume growth of up to 3 per cent between the 2020 and 2030 financial years.

"Our portfolio of quality assets and pipeline of competitive growth options are expected to generate strong free cash flow and returns through the 2020s and beyond", Ms Slattery said.

Petroleum's growth options currently include Scarborough, Wildling Phase I, Trion and Trinidad & Tobago North. While these remain subject to our strict Capital Allocation Framework, they are well placed to compete with other options in the Group's portfolio.

"Our capabilities in safety, exploration and deepwater operations, coupled with a high-performance culture give us confidence that we can deliver on our plans into the future," Ms Slattery said.

Presentations will be webcast live at https://edge.media-server.com/mmc/p/362g83wf and all materials be available on our website at bhp.com.

A summary of guidance and project details contained in the presentation is included below.

1. Represents an unconstrained scenario based on execution of all unsanctioned projects at current equity interests and does not constitute guidance. Based on Wood Mackenzie's most recent long-term oil and gas price forecasts as follows: Brent oil price assumption (2020-2030 average: US$74.34/bbl, real 2019); Japan LNG DES price assumption (2020-2030 average: US$7.86/MMBtu, real 2019).

Guidance

 
        Asset                FY20e                           Medium term 
                         Production      Unit costs(1)         Production      Unit costs(1) 
======================  =============  ==================  ==================  ============= 
Conventional Petroleum  110-116 MMboe   US$10.5-11.5/boe   110 MMboe average   <US$13/boe 
----------------------  -------------  ------------------  ------------------  ------------- 
 
 

Future options

 
Options         Operator     BHP        Potential       Capex BHP        Tollgate        Potential     Description 
                           Ownership    execution         share                            first 
                                          timing          (US$m)                       production(2) 
==============  ========  ==========  ==============  ==============  ===============  ==============  =============== 
North West      Woodside    16.67%       <5 years          >250       Pre-feasibility       FY26       Low risk 
Shelf Other                                                                                            investment 
Resource Owner                                                                                         opportunity to 
                                                                                                       maximise 
                                                                                                       Karratha Gas 
                                                                                                       Plant value 
                                                                                                       through 
                                                                                                       processing 
                                                                                                       other 
                                                                                                       resource owner 
                                                                                                       gas; benefits 
                                                                                                       through tolling 
                                                                                                       fees, cost 
                                                                                                       recovery and 
                                                                                                       life extension. 
--------------  --------  ----------  --------------  --------------  ---------------  --------------  --------------- 
Pyrenees Phase    BHP       71.43%       <5 years          >250         Opportunity         FY22       Combination of 
4                                                                       Assessment                     well re-entries 
                                                                                                       and new subsea 
                                                                                                       wells which aim 
                                                                                                       to optimise 
                                                                                                       incremental 
                                                                                                       value 
                                                                                                       using the 
                                                                                                       existing 
                                                                                                       infrastructure. 
--------------  --------  ----------  --------------  --------------  ---------------  --------------  --------------- 
Scarborough(3)  Woodside    26.5%         1 year       1,400-1,900    Pre-feasibility       FY24       Large resource 
                                                                                                       of 13 subsea 
                                                                                                       wells connected 
                                                                                                       to a 
                                                                                                       semisubmersible 
                                                                                                       floating 
                                                                                                       production unit 
                                                                                                       from which gas 
                                                                                                       is exported via 
                                                                                                       pipeline to 
                                                                                                       Pluto LNG 
                                                                                                       facility for 
                                                                                                       onshore 
                                                                                                       processing. 
--------------  --------  ----------  --------------  --------------  ---------------  --------------  --------------- 
Atlantis Phase     BP        44%         <5 years          >250         Opportunity         FY24       Additional 
4                                                                       Assessment                     development 
                                                                                                       opportunities 
                                                                                                       for infill 
                                                                                                       producing 
                                                                                                       wells. Data 
                                                                                                       obtained from 
                                                                                                       Phase 
                                                                                                       3 project 
                                                                                                       de-risks 
                                                                                                       further 
                                                                                                       development of 
                                                                                                       multiple 
                                                                                                       hydrocarbon 
                                                                                                       bearing zones. 
--------------  --------  ----------  --------------  --------------  ---------------  --------------  --------------- 
Mad Dog            BP       23.9%        <5 years          >250       Pre-feasibility       FY24       Two water 
Northwest                                                                                              injector wells 
Water                                                                                                  providing water 
Injection                                                                                              from Mad Dog 
                                                                                                       Phase 2 
                                                                                                       facility to 
                                                                                                       increase 
                                                                                                       production 
                                                                                                       at existing A 
                                                                                                       Spar facility. 
--------------  --------  ----------  --------------  --------------  ---------------  --------------  --------------- 
Mad Dog            BP       23.9%        <5 years          >250         Opportunity         FY25       Additional 
opportunities                                                           Assessment                     opportunities 
                                                                                                       to increase the 
                                                                                                       Mad Dog Phase 2 
                                                                                                       production 
                                                                                                       beyond the 
                                                                                                       initial 
                                                                                                       investment 
                                                                                                       scope with new 
                                                                                                       wells tied back 
                                                                                                       to existing 
                                                                                                       facility, 
                                                                                                       results in 
                                                                                                       highly economic 
                                                                                                       opportunities. 
--------------  --------  ----------  --------------  --------------  ---------------  --------------  --------------- 
Shenzi Growth     BHP        44%          1 year           <250       Pre-feasibility       FY23       Shenzi Subsea 
opportunities                                                                                          Multi-Phase 
                                                                                                       Pumping 
                                                                                                       (SSMPP); Subsea 
                                                                                                       pumping 
                                                                                                       opportunities 
                                                                                                       to increase 
                                                                                                       production 
                                                                                                       rates from 
                                                                                                       existing wells. 
--------------  --------  ----------  --------------  --------------  ---------------  --------------  --------------- 
 
 
Options         Operator     BHP        Potential     Capex BHP share     Tollgate        Potential     Description 
                           Ownership    execution          (US$m)                           first 
                                          timing                                        production(2) 
==============  ========  ==========  ==============  ===============  ===============  ==============  ============== 
Wildling Phase    BHP      44%-72%      1-2 years          500        Pre-feasibility       FY23       Two Shenzi 
1                                                                                                       North wells 
                                                                                                        tied-back to 
                                                                                                        the Shenzi 
                                                                                                        platform, 
                                                                                                        provides the 
                                                                                                        opportunity to 
                                                                                                        accelerate 
                                                                                                        production and 
                                                                                                        unlock 
                                                                                                        additional 
                                                                                                        recoverable 
                                                                                                        reserves. 
                                                                                                        Phased 
                                                                                                        development 
                                                                                                        accelerates 
                                                                                                        first 
                                                                                                        oil, minimizes 
                                                                                                        appraisal cost 
                                                                                                        and reduces 
                                                                                                        risk. 
==============  ========  ==========  ==============  ===============  ===============  ==============  ============== 
Trion             BHP        60%        2-3 years         >5,000         Conceptual          FY25       Large 
                                                                                                        greenfield 
                                                                                                        development in 
                                                                                                        the deepwater 
                                                                                                        Mexico GoM. 
                                                                                                        Resource 
                                                                                                        uncertainty 
                                                                                                        reduced with 
                                                                                                        recent 
                                                                                                        successful 
                                                                                                        appraisal 
                                                                                                        drilling of 
                                                                                                        2DEL and 3DEL 
                                                                                                        wells. 
==============  ========  ==========  ==============  ===============  ===============  ==============  ============== 
Trinidad &        BHP        70%         <5 years       Under study      Opportunity         FY27       Completed 
Tobago North                                                             Assessment                     successful 
                                                                                                        exploration 
                                                                                                        program on our 
                                                                                                        Northern 
                                                                                                        licenses. 
                                                                                                        Potential 
                                                                                                        material gas 
                                                                                                        play in 
                                                                                                        deepwater 
                                                                                                        Trinidad & 
                                                                                                        Tobago, well 
                                                                                                        positioned to 
                                                                                                        the Atlantic 
                                                                                                        LNG plant 
                                                                                                        onshore 
                                                                                                        Trinidad 
                                                                                                        & Tobago. 
==============  ========  ==========  ==============  ===============  ===============  ==============  ============== 
 

Note: This represents an unconstrained scenario based on execution of all unsanctioned projects at current equity interests and does not constitute guidance.

Exploration

 
Options                Location                 Ownership     Maturity       Earliest first      Description 
                                                                               production 
=====================  ======================  ============  ===========  =====================  ===================== 
Western GoM            US - Gulf of Mexico         100%       Frontier         Early 2030s       Acquired a 
                                                 Operator                                        significant acreage 
                                                                                                 position in 
                                                                                                 historically 
                                                                                                 underexplored Western 
                                                                                                 Gulf of Mexico 
---------------------  ----------------------  ------------  -----------  ---------------------  --------------------- 
Mexico                 Mexico - Gulf of        60% Operator  Exploration       Late 2020s        Opportunity to tie 
                       Mexico                                                                    back prospects to 
                                                                                                 future Trion hub. 
                                                                                                 Included in Trion 
                                                                                                 Minimum Work Program 
---------------------  ----------------------  ------------  -----------  ---------------------  --------------------- 
T&T Southern Gas       Trinidad & Tobago           65%       Exploration        Mid 2020s        Discovered gas play 
(Magellan)                                       Operator                                        in deepwater Trinidad 
                                                                                                 & Tobago 
---------------------  ----------------------  ------------  -----------  ---------------------  --------------------- 
T&T Southern Deep      Trinidad & Tobago           65%        Frontier         Late 2020s        Evaluating multiple 
Potential                                        Operator                                        play types to test 
                                                                                                 deeper potential in 
                                                                                                 deepwater Trinidad & 
                                                                                                 Tobago based 
                                                                                                 on deep oil shows 
                                                                                                 from Le Clerc 
                                                                                                 exploration 
---------------------  ----------------------  ------------  -----------  ---------------------  --------------------- 
Eastern Canada         Orphan Basin                100%       Frontier         Early 2030s       Recent bid success 
                                                 Operator                                        for blocks with large 
                                                                                                 liquids resource 
                                                                                                 potential in the 
                                                                                                 offshore Orphan 
                                                                                                 Basin in Eastern 
                                                                                                 Canada 
---------------------  ----------------------  ------------  -----------  ---------------------  --------------------- 
                 Significant remaining project potential with unrisked NPV of up to US$14 billion(4) 
====================================================================================================================== 
 

1. Based on an exchange rate of AUD/USD 0.70. Unit costs are in nominal terms.

2. Potential first production data is an estimate and does not constitute guidance.

3. Based on information provided by operator. Represents BHP's current equity position as 25% in WA-1-R and 50% in

WA-62-R.

4. Exploration unrisked value at BHP prices.

Further information on BHP can be found at: bhp.com

 
Media Relations                       Investor Relations 
 
 Email: media.relations@bhp.com        Email: investor.relations@bhp.com 
 
Australia and Asia                    Australia and Asia 
 
 Gabrielle Notley                      Tara Dines 
 Tel: +61 3 9609 3830 Mobile:          Tel: +61 3 9609 2222 Mobile: 
 +61 411 071 715                       + 61 499 249 005 
 
 Europe, Middle East and Africa        Europe, Middle East and Africa 
 
 Neil Burrows                          Elisa Morniroli 
 Tel: +44 20 7802 7484 Mobile:         Tel: +44 20 7802 7611 Mobile: 
 +44 7786 661 683                      +44 7825 926 646 
 
 Americas                              Americas 
 
 Judy Dane                             Cristian Coloma 
 Tel: +1 713 961 8283 Mobile:          Tel: +1 713 235 8902 Mobile: 
 +1 713 299 5342                       +1 346 234 8483 
BHP Group Limited ABN 49 004          BHP Group plc Registration 
 028 077                               number 3196209 
 LEI WZE1WSENV6JSZFK0JC28              LEI 549300C116EOWV835768 
 Registered in Australia               Registered in England and Wales 
 Registered Office: Level 18,          Registered Office: Nova South, 
 171 Collins Street                    160 Victoria Street 
 Melbourne Victoria 3000 Australia     London SW1E 5LB United Kingdom 
 Tel +61 1300 55 4757 Fax +61          Tel +44 20 7802 4000 Fax +44 
 3 9609 3015                           20 7802 4111 
 
Members of the BHP Group which is 
 headquartered in Australia 
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