The oil and gas giant previously flagged cost increases of at least 30% at Atlantis, but today said the budget blow-out would likely be higher.

“A detailed review of cost estimates continues as the project’s schedule becomes more certain,” BHPB said in its quarterly report.

“Capital cost pressures are likely to result in a capital cost increase of more than 30% in excess of the currently approved budget.”

In February last year, the company approved a revised budget of $US1.1 billion ($A1.45 billion) for Atlantis, which is operated by BP.

The announcement is the second blow for the project inside a week, after BHPB reported that first production had been pushed back to “late” in the first half of next year.

Meanwhile, the company also confirmed that its share of costs at the NWS expansion had increased 20% to $300 million, with first production expected by late 2008. BHPB holds a 16.67% interest in the NWS Venture, in equal partnership with BP, Chevron, Japan Australia LNG, Shell and Woodside, which is also operator.

BHPB’s total petroleum production for the quarter also dipped 4% on-year to 30.52 million barrels of oil equivalent.