BHP Billiton could spend up to $US1 billion on offshore oil exploration next financial year after securing a second drill rig that will let it test big targets in the Gulf of Mexico and Trinidad and Tobago, as part of the company’s biggest exploration push in more than 10 years.
In its fourth-quarter report yesterday, BHP said it had boosted its 2015-16 exploration guidance by $US40 million to $US640m, representing a June quarter spend of $US250m as it starts drilling in earnest as part of a plan to balance its big shale exposure with conventional oil.
With two rigs running, the fourth-quarter spending rate implies a $US1bn spend for next year
Last month, The Australian revealed BHP was accelerating offshore exploration by trying to secure the extra drill rig in the Americas, despite cutting back other spending across the group.
More recently, BHP chief Andrew Mackenzie said the miner’s February decision to abandon a progressive dividend policy that would have cost it $US6.5bn this year had been a major factor in the exploration boost.
BHP’s recent exploration push is focused on big potential oil, rather than gas, targets in the Gulf of Mexico, Trinidad and Tobago and the Beagle sub-basin off Western Australia.
The strategy was designed by former petroleum boss Tim Cutt to replace a previously scattergun approach by the big miner that had seen largely unsuccessful drilling in the Falkland Islands, The Philippines, Bahrain and Brunei.
The new drill rig is now being mobilised for an eight-well program off Trinidad and Tobago, where BHP recently finished the world’s biggest private-sector seismic studies.
The major target in the Caribbean is the “Pegleg” prospect, whose footprint is up to three times the size of BHP’s major producing Gulf of Mexico finds.
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