BHP's Jan-Mar oil, gas output down 5pc on year

Australian resources firm BHP reported a 5pc fall in oil and gas production for the January-March quarter from a year earlier, on reduced seasonal gas demand from its interest in the Gippsland basin joint venture (GBJV) offshore Victoria and lower well productivity at its Atlantis oil field in the US Gulf of Mexico.

Total production of crude oil, condensate, natural gas liquids and natural gas fell by 6pc to 267,900 b/d of oil equivalent (boe/d) in the January-March quarter from 279,300 boe/d in October-December, and dropped by 5pc from 281,900 boe/d in the same period in 2021, BHP said.

BHP has withdrawn its oil and gas production guidance for 2021-22 following its agreement to merge its petroleum assets with Australian independent Woodside Petroleum. The merger is expected to be completed by 1 June. BHP produced 282,000 boe/d of oil and gas in the 2020-21 financial year to 30 June.

The merger is subject to a vote by Woodside shareholders at its annual general meeting on 19 May.

BHP's average daily production is up by 1.9pc to 282,000 boe/d in the first nine months of the 2021-22 fiscal year from 276,800 boe/d in the same period a year earlier, despite a decline in total oil and gas output in the latest quarter.

Crude oil, condensate and natural gas liquids production increased by 8pc over the nine-month period to 133,600 boe/d from the same period a year earlier. This reflected the additional 28pc working interest acquired in Shenzi in November 2020, new production from Shenzi and Atlantis, and increased volumes from the Ruby field following first production in May 2021, and lower impact from weather events in the Gulf of Mexico, according to BHP.

Natural gas production decreased by 3pc to 244bn ft³ (6.91bn m³) in the nine months to 31 March from the same period a year earlier, reflecting natural field decline, decreased production at its 16.6pc-owned 16.3mn t/yr North West Shelf (NWS) LNG venture offshore Western Australia and unplanned downtime at Angostura, offshore Trinidad and Tobago, BHP said. The decline in production has been partially offset by increased volumes from Ruby and higher seasonal demand for gas at Bass Strait, it added.

BHP is expected to see an uptick in oil production later in the year when phase two of the Mad Dog oil field in the US Gulf of Mexico comes online, according to the firm. BHP owns 23.9pc of Mad Dog. The expansion of the field was 98pc complete at 31 March, BHP said.

BHP last month signed a farm-out agreement with Shell to assign a 40pc equity in each of the two Barbados offshore exploration licences, the Bimshire and Carlisle Bay blocks, BHP added. Completion of the deal is expected by the end of June, it said.

Petroleum exploration expenditure for the July to March period was $362mn, BHP said. The firm has allocated around $540mn to its exploration and appraisal programme for 2021-22, it said.

By Kevin Morrison

BHP's petroleum production, sales	mn boe
Type	Jan-Mar '22	Oct-Dec '21	Jan-Mar '21	2021-22 (YTD)	2020-21 (YTD)	2021-22 (YTD) vs 2020-21 (YTD) % ±	Y % ±	Q % ±
Crude oil and condensate	9.80	10.65	10.02	31.02	28.65	8.27	-2.20	-7.98
NGL	1.66	1.70	1.58	5.53	5.18	6.76	5.06	-2.35
Natural gas (bcf)	75.90	80.10	82.60	244.40	252.00	-3.02	-8.11	-5.24
Total	24.11	25.70	25.37	77.29	75.84	1.91	-4.97	-6.19
Source: BHP

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