BHPB’s gas production rose by 6% last year to reach 261.85 billion cubic feet, in the current fiscal year to date, the company said in its quarterly report released today.

But quarterly gas production of 77.85bcf was down 5% on the March 2005 quarter and overall petroleum production was lower in the March quarter compared with the previous corresponding period.

Total petroleum production for the quarter was 26.01 million barrels of oil equivalent, down 9% year-on-year and 7% lower than the December quarter. Year-to-date petroleum production was 1% lower at 85.32mmboe.

“Lost production from the Typhoon/Boris facility, well and weather-related downtime at North West Shelf and Griffin, natural field decline at Bass Strait, and the sale of Laminaria all had a negative impact on production,” the diversified resources giant said.

“This was partially offset by ramp up of production at ROD, Mad Dog and Angostura.”

Industry-wide pressures during the March quarter have also continued to cause production problems, the company said.

“A shortage of people, equipment and supplies has led to tight labour markets and difficulty in sourcing construction and drilling plant and machinery, which in turn has led to rising input costs,” BHPB said.

“These conditions, which are currently particularly acute in Australia and the Gulf of Mexico, continue to challenge the ability of BHP Billiton to deliver development projects to budget.”

BHPB said most of its projects were on or ahead of schedule. But concerns persist on the giant Gulf of Mexico Atlantis development

The company has said that start-up is under review for Atlantis, which will be able to produce 200,000 barrels of oil and 180 million cubic feet of natural gas a day.

BHPB has a 44% stake in Atlantis, which is operated by majority partner BP (56%).

In February, BP said Atlantis could still be into production by the end of this year but most analysts now expect a start-up in the second quarter of next year.

In a research note, Goldman Sachs JBWere said a further dealy to Atlantis could cut BHPB’s 2006-07 profit by $US143 million, or 1.5%.