MercoPress. South Atlantic News Agency

BHP Billiton confirms oil exploration commitment in Falklands’ waters

The corporation is Australia largest oil and gas producer and is increasing investments

BHP Billiton Ltd., Australia’s biggest oil and gas producer, boosted its forecast for petroleum exploration spending by 33% because of an increase in drilling in the US Gulf of Mexico and offshore Australia.

The corporation also anticipated that exploration over the “next several years” will focus on drilling wells in the Gulf of Mexico, Malaysia, Australia, Canada, Colombia and the Falkland Islands, BHP said in the report.

BHP, also the world’s largest mining company, expects to spend 800 million USD on oil and gas exploration in the year ending June 30, 200 million USD more than previously projected, the Melbourne-based company said in a statement.

BHP is drilling wells in the Green Canyon area of the Gulf of Mexico, the Sandakan Basin southwest of the Philippines, the Gippsland Basin off the Victorian coast of Australia and Canada’s Laurentian Basin, according to the release.

The corporation expects to drill 25 exploration and appraisal wells in the next three years, BHP said in a 2009 annual review posted on its Web site. During that period, “we are positioned to begin the strongest exploration drilling program in the company’s recent history,” J. Michael Yeager, chief executive officer of BHP petroleum unit, wrote in the report.

Petroleum exploration spending for the year ended June 30, 2009 was 548 million USD, the company said in an annual report. Spending in the six months ending in December was 200 million.

BHP first-half petroleum production increased 17% to 79.6 million barrels of oil equivalent, bolstered by output gains at the Shenzi field in the Gulf of Mexico, the company said. Second-quarter output climbed 16% to 38.4 million barrels of oil equivalent.

The Australian corporation said last October it was on target for 10% annual growth in petroleum output in the year ending June 30. Annual increases of 10% through June 30, 2011 remain the company’s goal.

BHP Billiton has an interest in 14 exploration and production licenses offshore the Falkland Islands in the South Atlantic. The Company signed contracts with Falkland Oil and Gas Limited (FOGL) for rights to explore and, if successful, eventually produce oil and gas from the East Falkland Basin located off the southern and eastern coast of the Falkland Islands.

BHP Billiton holds a 40 per cent interest in the acreage and is the designated operator. Falkland Oil and Gas Limited hold the remaining 60 percent interest. The production licenses cover approximately 18 million acres and are located in water depths ranging from approximately 656 to 6,570 feet (approximately 200 to 2,000 meters).