BHP continues to optimise its petroleum portfolio, with its Bass Strait assets in Australia next in line as part of a divestment strategy.
The company has confirmed that the West Barracouta joint venture project in the Bass Strait is on schedule and budget despite the impact of COVID-19.
BHP expects to achieve first production of gas from West Barracouta in the 2021 financial year despite delays in component delivery and equipment fabrication due to COVID-19 restrictions.
Development of West Barracouta involves drilling two gas production wells and constructing associated subsea gas production facilities to access gas in the existing Barracouta field, located offshore Victoria in the Gippsland Basin.
The project is being developed by the Esso-BHP Gippsland Basin joint venture, a 50-50 partnership between ExxonMobil’s subsidiary Esso Australia and BHP.
Meanwhile, BHP reported in March 2020 that Woodside (operator) had delayed the Scarborough gas development to the second half of the 2021 calendar year. A final investment decision by BHP is expected to be aligned with this revised timing.
Despite COVID-19, BHP chief executive officer Mike Henry said the company delivered a strong set of results for the 2020 financial year, reflecting the strength, resilience and quality of its people and portfolio.
Looking towards the 2021 financial year and beyond, Henry believes oil will be an attractive commodity for a considerable time period to come.
“We believe gas, where advantaged by infrastructure and proximity to market, also has attractive fundamentals for high quality assets. Gas has the more resilient demand profile while oil has the steeper cost curve, driven by complex and diverse geology,” Henry said.
“Ongoing field decline (at least 3 per cent per annum) in existing producing oil and gas assets is an important underpin to each market.”
The company also outlined that it wants to explore potential targeted counter-cyclical acquisitions in producing or near producing high quality assets, with each opportunity tested against its strict capital allocation framework.
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