BHP Billiton Ltd., Australia’s largest oil and gas producer, said petroleum output will likely be flat for the first time in four years because of the deepwater drilling moratorium in the Gulf of Mexico.
“It’s a very significant hit to us,” J. Michael Yeager, chief executive officer of BHP’s oil and gas unit, said in a conference in New York yesterday. “But we’re doing everything we can do to get back out there and expect to be one of the first companies to return to drilling” once the ban is lifted.
BHP may benefit from the Gulf fallout and be able to acquire assets from London-based BP Plc or smaller companies operating in the region as tougher regulation drives up costs, Citigroup Inc. said in June. BHP, the world’s biggest mining company, is considering acquisitions in the energy industry, Yeager said, according to a webcast of the conference.
“Our corporation is very, very bullish on energy, and all I can say is we have some people working full time on inorganic growth for the first time in four years,” Yeager said.
While BHP’s petroleum output in the year ended June 30 increased 15 percent to 158.6 million barrels of oil equivalent, drilling at Atlantis and Shenzi fields in the Gulf stopped during the last quarter, the company said on July 21.
A proposed liquefied natural gas project with Exxon Mobil Corp. relying on the Scarborough and Thebe fields off northwest Australia may cost as much as $20 billion to develop, Yeager said. The Browse LNG venture, led by Woodside Petroleum Ltd., may cost more than $25 billion when it is approved by the partners and “possibly much higher than that,” he said.
BHP is a partner with BP in the Atlantis, Mad Dog and Gunflint ventures in the Gulf, a “core” area for the company, according to a presentation on the company’s website.‹
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