In its quarterly report, the world’s largest diversified miner today said petroleum production for the September period was roughly in line with the previous quarter despite natural field decline.
Natural gas production was 6% higher than the previous corresponding period due to improved facility uptime and strong customer in Australia and Pakistan, the company said.
Production of crude oil and condensate was 5% lower than the September 2006 quarter due to natural field decline.
“This was partially offset by improved operational uptime, successful development drilling and stronger seasonal gas demand, which increased condensate production,” the company said.
But looking ahead, BHP expects to kick-start its petroleum division – which was the company’s biggest earner up to 2005 – as oil production is ramped up at its Genghis Khan and Atlantis projects in the deepwater Gulf of Mexico.
In addition, it has brought forward the start-up date of its Stybarrow development, in northwest Australia, to the end of this year.
The field is anticipated to produce 80,000 barrels of oil per day.
BHP’s total oil and liquids output has failed to grow substantially over the past five years.
Even though the division’s operating profit has risen from $2.53 billion in 2005 to $3.01 billion in fiscal 2007, it has dropped to 16% of BHP’s total operating profit, from the 27% it accounted for in 2005.
BHP has worked to make the United States Gulf one of its three main global oil and gas areas, along with the Bass Strait and North West Shelf.
During the September quarter, BHP brought its Genghis Khan project online and this is expected to reach full capacity of 55,000bopd before year-end.
Additionally, it started output from its Atlantis South fields with full-field capacity expected this half-year at a rate of 200,000bopd and 180 million cubic feet per day.
Nine production wells have been drilled, with seven completed.
“The first well is online and the field will begin ramping up oil and gas production towards the end of this calendar year,” BHP said.
BHP holds a 44% stake in both projects.
Elsewhere in the GoM, BHP is counting down to first production from its Neptune oil and gas project, in which it has a 35% stake.
First output is expected in the first quarter of 2008, with full capacity expected at about 50,000bopd and 50MMcfd.
