BHP Notes Lower Productivity, Raises Copper Guidance -- Commodity Comment
22 Janvier 2019 - 03:29PM
Dow Jones News
By David Hodari
BHP Group, one of the world's largest mining companies, released
its results for the financial quarter ended Dec. 31 late on Monday.
In its report, the company maintained its production guidance for
petroleum, iron ore and coal, but boosted its total copper
production guidance. Here are some other remarks from the
report.
On productivity:
"Productivity for the December 2018 half-year has been impacted
by unplanned production outages at Olympic Dam, Spence and Western
Australia Iron Ore, with a total negative impact of approximately
$600 million."
On petroleum:
"Guidance for the 2019 financial year remains unchanged at
between 113 and 118 million barrels, with volumes expected to be
toward the upper end of the guidance range. Crude oil, condensate
and natural gas liquids production declined by 5% to 29 million
barrels due to natural field decline across the portfolio and a 70
day planned dry dock maintenance program at Pyrenees completed
during the September 2018 quarter. This decline was partially
offset by higher uptimes at our Gulf of Mexico assets. Natural gas
production was broadly flat at 206 bcf, reflecting increased tax
barrels at Trinidad and Tobago in accordance with the terms of our
Production Sharing Contract."
On petroleum exploration:
"In the Western US Gulf of Mexico, the Ocean Bottom Node seismic
acquisition is expected to be completed in the March 2019 quarter.
This is the world's first deepwater exploration ocean bottom node
seismic acquisition...BHP was successful in its bids to acquire a
100% interest in, and operatorship of, two exploration licenses for
blocks 8 and 12 in the Orphan Basin, offshore Eastern Canada. BHP's
aggregate bid amount of $625 million reflects the costs of the
drilling and seismic work likely to be performed during the
exploration phase, although there is no minimum work program under
the licence agreements...Petroleum exploration expenditure for the
December 2018 half-year was $316 million, of which $166 million was
expensed. A $750 million exploration and appraisal program is being
executed for the 2019 financial year."
On copper:
"Total copper production decreased by 1% to 825 kt. Guidance for
the 2019 financial year has been increased to between 1,645 and
1,740 kt and reflects the retention of Cerro Colorado. Escondida
copper production was broadly unchanged at 580 kt as higher
concentrator throughput and improved recoveries offset the impact
of expected lower copper grades. Production guidance remains
unchanged at between 1,120 and 1,180 kt for the 2019 financial
year."
On iron ore:
"Total iron-ore production increased by 2% to 119 Mt--135 Mt on
a 100% basis. Guidance for the 2019 financial year remains
unchanged at between 241 and 250 Mt, or between 273 and 283 Mt on a
100% basis."
On coal:
"Metallurgical coal production increased by 2% to 21 Mt.
Guidance for the 2019 financial year remains unchanged at between
43 and 46 million tons, with volumes weighted to the second half of
the year as expected. At Queensland Coal, increased production was
supported by record production at South Walker Creek and higher
wash-plant throughput at Poitrel following the purchase of the Red
Mountain processing facility..Energy coal production decreased by
5% to 13 million tons. Guidance for the 2019 financial year remains
unchanged at approximately 28 to 29 million tons. New South Wales
Energy Coal production decreased by 4% as a result of a higher
average strip ratio."
On ongoing projects:
"During the December 2018 quarter, the North West Shelf Greater
Western Flank-B project achieved first production ahead of schedule
and under budget. The North West Shelf Greater Western Flank-B
project will not be reported in future Operational Reviews. At the
end of December 2018, BHP had five major projects under development
in petroleum, copper, iron ore and potash, with a combined budget
of $10.6 billion over the life of the projects."
Write to David Hodari at david.hodari@wsj.com
(END) Dow Jones Newswires
January 22, 2019 09:14 ET (14:14 GMT)
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