BHP: Offshore Newfoundland Has A New Player

By Tina Olivero – The OGM –

Steve Pastor, BHP President Operations Petroleum said the successful bids offshore Newfoundland are an exciting opportunity for BHP to explore for world-class conventional oil assets as an early mover in this prospective region. He envisions, “This frontier opportunity has large oil resource potential which we identified through our Global Petroleum Endowment Study in 2016 and is in a low-risk country, with competitive fiscal terms. This opportunity delivers on our exploration focus in conventional petroleum and will leverage our global deep-water development and operational expertise.”

WHO IS BHP?

BHP is a world-leading resources company. BHP extracts and processes minerals and oil and gas, with more than 62,000 employees and contractors, primarily in Australia and the Americas. BHP products are sold worldwide, with sales and marketing led through Singapore and Houston, United States.

BHP global headquarters are in Melbourne, Australia with offices around the globe and have now expanded into Eastern Canada as an offshore exploration investor.

BHP operates under a Dual Listed Company structure with two parent companies (BHP Billiton Limited and BHP Billiton Plc) operated as if they were a single economic entity, referred to as BHP.

BHP PETROLEUM UNIT

BHP Petroleum unit comprises conventional and unconventional oil and gas operations,
and includes exploration, development and production activities.

BHP has a high-quality resource base concentrated in the United States and Australia.
Core production operations consist of conventional assets located in the US Gulf of Mexico,
Australia and Trinidad and Tobago and unconventional Onshore US assets.

BHP produces crude oil and condensate, gas and natural gas liquids (NGLs) that are sold
on the international spot market or delivered domestically under contracts with varying
terms, depending on the location of the asset.

BHP OPERATING ASSETS

Gulf of Mexico, United States

BHP operates two fields in the Gulf of Mexico – Shenzi (44 per cent interest) and
Neptune (35 per cent interest).

They hold non-operating interests in two other fields –Atlantis (44 per cent interest),
and Mad Dog (23.9 per cent interest).

All of BHP’s producing fields are located between 155 and 210 kilometres offshore
from the US state of Louisiana.

Onshore US, United States

BHP holds more than 580,000 net acres in three prolific US shale areas –
Eagle Ford, Permian and Haynesville – where they produce oil, condensate, gas and NGLs.

The Black Hawk area of Eagle Ford and the Permian area are two of their largest
liquids-focused field developments.

Bass Strait, Australia

In 1965, BHP along with our 50-50 joint venture partner and operator, Esso Australia
(a subsidiary of ExxonMobil), through the Gippsland Basin joint venture,
participated in the original discovery of hydrocarbons.

They have produced oil and gas from the Bass Strait over the past 40 years.

The Bass Strait operations are located between 25 and 80 kilometres off the southeastern
the coast of Australia recently, the Kipper gas field under the Kipper Unit Joint Venture
(also operated by Esso Australia) has brought online additional gas and liquids
production that is processed via the existing Gippsland Basin Joint Venture facilities.

North West Shelf, Australia

BHP is a joint venture participant in the North West Shelf Project, located
approximately 125 kilometres northwest of Dampier in Western Australia.

Pyrenees, Australia

BHP operates six oil fields in the Pyrenees which are located offshore approximately
23 kilometres northwest of Northwest Cape, Western Australia. They had an effective
62 per cent interest in the fields as at 30 June 2016, based on inception-to-date
production from two permits in which they have interests of 71.43 per cent
and 40 per cent, respectively.

Macedon, Australia

We are the operator of Macedon (71.43 per cent interest), an offshore gas field
located approximately 75 kilometres west of Onslow, Western Australia and an
onshore gas processing facility, located approximately 17 kilometres southwest of Onslow.

Minerva, Australia

BHP are the operator of Minerva (90 per cent interest), a gas field located
1 kilometres south-southwest of Port Campbell in western Victoria. The operation
consists of two subsea wells, with gas piped onshore to a processing plant.

BHP PRODUCTION OPERATIONS

Trinidad and Tobago

BHP operates the Greater Angostura field (45 per cent interest in the production sharing contract),
an integrated oil and gas development located offshore 40 kilometres east of Trinidad.

Algeria

BHP Algerian operations comprise an effective 29.5 per cent interest in the ROD Integrated
Development, which consists of six satellite oil fields that pump oil back to a
dedicated processing train.

United Kingdom

BHP holds a 16 per cent non-operating interest in the Bruce oil and gas field in the North Sea
and a 31.83 per cent non-operating interest in the Keith oil and gas field, a subsea tie-back.
Operatorship of the Keith field was transferred to BP on 31 July 2015.

BHP LEADERSHIP

BHP THE NEW PLAYER OFFSHORE NEWFOUNDLAND

Record bids for exploration licenses offshore have been received as a result of the most recent calls for bids 2018, in the Eastern Newfoundland Region and Jeanne d’Arc Regions, both located in the Canada-Newfoundland and Labrador Offshore Area. In total, there was a record cumulative total of $1.38 billion in bids and a record single bid of $621 million from BHP Billiton Petroleum in the Eastern Newfoundland region.

In less than 7 per cent of the province’s offshore, there is a combined resource potential of 49.2 billion barrels of oil and 193.8 trillion cubic feet of gas. There have been eight new entrants in the past two years and $3.9 billion in recent exploration work commitments.

BHP was successful in its bids to acquire a 100% participating interest in, and operatorship of, two exploration licences for blocks 8 and 12 in the offshore Orphan Basin in Eastern Canada.

Steve Pastor, BHP President Operations Petroleum, said the successful bids are an exciting opportunity for BHP to explore for world-class conventional oil assets as an early mover in this prospective region. “This frontier opportunity has large oil resource potential which we identified through our Global Petroleum Endowment Study in 2016 and is in a low-risk country, with competitive fiscal terms,” Mr Pastor said. “This opportunity delivers on our exploration focus in conventional petroleum and will leverage our global deep-water development and operational expertise.”

BHP’s aggregate bid amount of US$625 million covers the drilling and seismic work required by the exploration work programs under the licence agreements over the six-year term. BHP’s minimum commitment under the licence agreements is for US$157 million.

Should BHP decide to progress the exploration program beyond this initial phase, a decision in relation to further capital expenditure to drill the first appraisal well is expected to be made in FY2022.

BHP’s initial planned capital expenditure on the exploration work programs for blocks 8 and 12 is US$140 million up to FY2021 and is within BHP’s current exploration budget.

Subject to satisfaction of conditions outlined by the Canada Newfoundland and Labrador Offshore Petroleum Board, it is anticipated that the licence agreements would be issued in December 2018 and would be effective in January 2019.

BHP was successful in its bids to acquire a 100% participating interest in, and operatorship of, two exploration licences for blocks 8 and 12 in the offshore Orphan Basin in Eastern Canada.

Sources, Text, Graphics, Images:
The Government of Newfoundland and Labrador
BHP.com
ondemand.ceraweek.com