By MarEx 2015-09-14 02:05:24
Tim Cutt, President Petroleum, BHP Billiton spoke at the 2015 Barclays CEO Energy-Power Conference in New York last week where he cited the company’s intention to conduct exploratory drilling in three major basins over the next three years.
In the Caribbean, the company has a leading “first mover” acreage position totalling approximately 17,000 km2 across two plays (the Oligocene and Miocene) in Trinidad and Tobago and Barbados. This is four times the size of BHP Billiton’s entire Gulf of Mexico portfolio.
“We have completed the largest proprietary 3D seismic survey acquired by a non-national oil company at 21,000 km2. Our work continues to provide positive evidence of prospectivity in this area,” he said.
“The Pegleg prospect is one of the structures that meets our exploration criteria in the Miocene play. The footprint of this lead is around two-three times the size of our major Gulf of Mexico fields. The first well of an eight well program is planned for the 2016 calendar year, representing an industry-leading three-year timeframe from access to drilling the first well.”
In Western Australia, the company has accessed a leading position (totalling approximately 25,000 km2) over the largely untested Beagle sub-basin off the north-western Australian coast.
“Our mega-regional evaluation of Western Australia highlighted the potential for a largely untested Tier 1 liquids play in the Beagle sub-basin. The play is on trend with the Barrow sub-basin and we have identified four leads that each have the potential of over 400 Mmbbl recoverable.”
The Gulf of Mexico
In the Gulf of Mexico, the company is targeting relatively immature Paleogene and Cretaceous plays with a focus on the western Gulf of Mexico. Over the past 12 months, it has acquired 50 blocks including a recent sale that is still subject to customary approval.
“Our integrated basin analysis of the entire Gulf of Mexico, including the U.S. and Mexico, indicates Tier 1 oil potential in the Paleogene and Cretaceous plays with the potential to access more than 40 untested, greater than 300 MMbbl, opportunities,” said Cutt.
He said the company’s petroleum portfolio is focused in areas where it is familiar with the geology, has excellent operational capabilities and understands the political environment. It is therefore dominated by the U.S. and Australia, with their stable fiscal regimes and where the company has a long history of production. Approximately 94 per cent of its 700 kboe/d comes from these two regions.
Cutt was positive about the current low oil prices. “As part of a larger resource company with a strong balance sheet, we can be very flexible in our development programs. We will always choose value over volume and have responded decisively in the low price environment.
“We are well positioned on the cost curve and continue to drive costs out through our productivity agenda.
“We are confident that margins will improve in the future and we will continue to hold and pursue opportunities that will add significant value for our shareholders over the long-term,” he said.
“Our total resource position – in excess of 10 billion barrels of oil equivalent – remains relatively unchanged and we remain committed to increasing our exposure to oil.”