The company’s latest production report, published yesterday, shows natural gas production fell six per cent over the previous financial year to 787 Bcf.
The company’s Bass Strait operations, which experienced weaker seasonal demand, combined with lower onshore US gas volumes contributed to the reduction and subsequent decision to defer investment in the commodity.
BHP Billiton Chief Executive Officer, Andrew Mackenzie remained optimistic about the company’s position, citing a reduction in costs and overall increased volumes across its other commodities.
“Better productivity will be the sole source of volume growth at Western Australia Iron Ore in the 2016 financial year with production forecast to increase by seven per cent and unit costs are expected to fall to US$16 per tonne,”? Mackenzie was quoted saying in yesterday’s release.
“In Petroleum, through improved recoveries and lower drilling costs, we expect to maintain production in the Black Hawk and Permian in the 2016 financial year despite cutting annual shale investment by over 50 per cent.”?
“Although our decision to cut spending in the Onshore US will mean deferring gas volumes in the near term, we expect to realise greater value by developing our acreage later.”?
In May, BHP Billiton President Petroleum and Potash, Tim Cutt affirmed the company’s commitment to petroleum resources production while also implementing the cost-cutting measures.
“The short-term behaviour of the market is outside of our control, but our own operational behaviour is something we can control,” he said.
“BHP Billiton has a strong focus on productivity and our Petroleum business is no exception. In our shale operations for example, we have lowered our drilling expenditure by 50 per cent.”?