Wrap Text
Petroleum briefing
BHP Group Plc
Registration number 3196209
Registered in England and Wales
Share code: BHP
ISIN: GB00BH0P3Z91
Issued by: BHP Group Plc
Date: 11 November 2019
To: London Stock Exchange
JSE Limited
For Release: Immediately
Contact: Helen Ratsey +44 (0) 20 7802 7540
Petroleum briefing
UK Listing Authority Submissions
The following document has today been submitted to the National Storage Mechanism
and will shortly be available for inspection at: www.morningstar.co.uk/uk/NSM
- Petroleum briefing
The document will also shortly be available via BHP’s website: bhp.com
The meeting will be webcast at: https://edge.media-server.com/mmc/p/362g83wf
Further information on BHP can be found at bhp.com.
BHP Group plc Registration number 3196209
LEI 549300C116EOWV835768
Registered in England and Wales
Registered Office: Nova South, 160 Victoria Street
London SW1E 5LB United Kingdom
A member of the BHP Group which is headquartered in Australia
Sponsor: UBS South Africa (Pty) Limited
NEWS RELEASE
Release Time IMMEDIATE
Date 11 November 2019
Release Number 21/19
Petroleum briefing
BHP President Operations Petroleum, Geraldine Slattery, today said Petroleum is set to
deliver strong returns and contribute significant value for BHP through the 2020s and
beyond, built on a foundation of quality assets, and attractive growth options.
Speaking to investors and analysts at a briefing in Sydney, Ms Slattery said Petroleum is
a great business with competitive growth potential and is aligned with BHP’s strategy of
being in the best commodities, with the best assets, enabled by the best culture and
capabilities. Petroleum has delivered strong financial performance over many years and
this is set to continue.
“In a decarbonising world, deepwater oil and advantaged gas close to established
infrastructure can offer competitive returns for decades to come.”
Ms Slattery outlined a scenario(1) that could potentially:
- Generate robust EBITDA margins of more than 60 per cent and an average
Return on Capital Employed of more than 15 per cent over the next decade;
- Deliver average Internal Rates of Return of around 25 per cent for major projects,
which are resilient through cycles; and
- Support an average annual volume growth of up to 3 per cent between the 2020
and 2030 financial years.
“Our portfolio of quality assets and pipeline of competitive growth options are expected to
generate strong free cash flow and returns through the 2020s and beyond”, Ms Slattery
said.
Petroleum’s growth options currently include Scarborough, Wildling Phase I, Trion and
Trinidad & Tobago North. While these remain subject to our strict Capital Allocation
Framework, they are well placed to compete with other options in the Group’s portfolio.
“Our capabilities in safety, exploration and deepwater operations, coupled with a high-
performance culture give us confidence that we can deliver on our plans into the future,”
Ms Slattery said.
Presentations will be webcast live at https://edge.media-server.com/mmc/p/362g83wf
and all materials be available on our website at bhp.com.
A summary of guidance and project details contained in the presentation is included
below.
(1) Represents an unconstrained scenario based on execution of all unsanctioned projects at current equity
interests and does not constitute guidance. Based on Wood Mackenzie’s most recent long-term oil and gas
price forecasts as follows: Brent oil price assumption (2020-2030 average: US$74.34/bbl, real 2019); Japan
LNG DES price assumption (2020-2030 average: US$7.86/MMBtu, real 2019).
Guidance
Asset FY20e Medium term
Production Unit costs1 Production Unit costs1
Conventional Petroleum 110-116 MMboe US$10.5-11.5/boe ~110 MMboe average Less than US$13/boe
Future options
Options Operator BHP Potential Capex Tollgate Potential Description
Ownership execution BHP first
timing share production2
(US$m)
Low risk investment opportunity to
North West maximise Karratha Gas Plant value
Greater
Shelf Other Less than Pre- through processing other resource
Woodside 16.67% than FY26
Resource 5 years feasibility owner gas; benefits through tolling
250
Owner fees, cost recovery and life
extension.
Combination of well re-entries and
Greater
Pyrenees Less than Opportunity new subsea wells which aim to
BHP 71.43% than FY22
Phase 4 5 years Assessment optimise incremental value using the
250
existing infrastructure.
Large resource of 13 subsea wells
connected to a semisubmersible
1,400- Pre-
Scarborough3 Woodside 26.5% 1 year FY24 floating production unit from which
1,900 feasibility
gas is exported via pipeline to Pluto
LNG facility for onshore processing.
Additional development opportunities
Greater for infill producing wells. Data
Atlantis Less than Opportunity
BP 44% than FY24 obtained from Phase 3 project de-
Phase 4 5 years Assessment
250 risks further development of multiple
hydrocarbon bearing zones.
Mad Dog Two water injector wells providing
Greater
Northwest Less than Pre- water from Mad Dog Phase 2 facility
BP 23.9% than FY24
Water 5 years feasibility to increase production at existing A
250
Injection Spar facility.
Additional opportunities to increase
the Mad Dog Phase 2 production
Greater
Mad Dog Less than Opportunity beyond the initial investment scope
BP 23.9% than FY25
opportunities 5 years Assessment with new wells tied back to existing
250
facility, results in highly economic
opportunities.
Shenzi Subsea Multi-Phase
Shenzi Less
Pre- Pumping (SSMPP); Subsea pumping
Growth BHP 44% 1 year than FY23
feasibility opportunities to increase production
opportunities 250
rates from existing wells.
Options Operator BHP Potential Capex Tollgate Potential Description
Ownership execution BHP first
timing share production2
(US$m)
Two Shenzi North wells tied-back to
the Shenzi platform, provides the
opportunity to accelerate production
Wildling Pre-
BHP 44%-72% 1-2 years ~500 FY23 and unlock additional recoverable
Phase 1 feasibility
reserves. Phased development
accelerates first oil, minimizes
appraisal cost and reduces risk.
Large greenfield development in the
Greater deepwater Mexico GoM. Resource
Trion BHP 60% 2-3 years than Conceptual FY25 uncertainty reduced with recent
5,000 successful appraisal drilling of 2DEL
and 3DEL wells.
Completed successful exploration
program on our Northern licenses.
Trinidad &
Less than Under Opportunity Potential material gas play in
Tobago BHP 70% FY27
5 years study Assessment deepwater Trinidad & Tobago, well
North
positioned to the Atlantic LNG plant
onshore Trinidad & Tobago.
Note: This represents an unconstrained scenario based on execution of all unsanctioned projects at current equity
interests and does not constitute guidance.
Exploration
Options Location Ownership Maturity Earliest first Description
production
100% Acquired a significant acreage position in
US – Gulf of
Western GoM Frontier Early 2030s historically underexplored Western Gulf of
Mexico Operator
Mexico
Opportunity to tie back prospects to future
Mexico – Gulf 60%
Mexico Exploration Late 2020s Trion hub. Included in Trion Minimum Work
of Mexico Operator
Program
T&T Southern Trinidad & 65% Discovered gas play in deepwater Trinidad &
Exploration Mid 2020s
Gas (Magellan) Tobago Operator Tobago
Evaluating multiple play types to test deeper
T&T Southern Trinidad & 65% potential in deepwater Trinidad & Tobago
Frontier Late 2020s
Deep Potential Tobago Operator based on deep oil shows from Le Clerc
exploration
100% Recent bid success for blocks with large
Eastern
Orphan Basin Frontier Early 2030s liquids resource potential in the offshore
Canada Operator
Orphan Basin in Eastern Canada
Significant remaining project potential with unrisked NPV of up to US$14 billion4
1. Based on an exchange rate of AUD/USD 0.70. Unit costs are in nominal terms.
2. Potential first production data is an estimate and does not constitute guidance.
3. Based on information provided by operator. Represents BHP’s current equity position as 25% in WA-1-R and 50% in
WA-62-R.
4. Exploration unrisked value at BHP prices.
Further information on BHP can be found at: bhp.com
Media Relations Investor Relations
Email: media.relations@bhp.com Email: investor.relations@bhp.com
Australia and Asia Australia and Asia
Gabrielle Notley Tara Dines
Tel: +61 3 9609 3830 Mobile: +61 411 071 715 Tel: +61 3 9609 2222 Mobile: + 61 499 249 005
Europe, Middle East and Africa Europe, Middle East and Africa
Neil Burrows Elisa Morniroli
Tel: +44 20 7802 7484 Mobile: +44 7786 661 683 Tel: +44 20 7802 7611 Mobile: +44 7825 926 646
Americas Americas
Judy Dane Cristian Coloma
Tel: +1 713 961 8283 Mobile: +1 713 299 5342 Tel: +1 713 235 8902 Mobile: +1 346 234 8483
BHP Group Limited ABN 49 004 028 077 BHP Group plc Registration number 3196209
LEI WZE1WSENV6JSZFK0JC28 LEI 549300C116EOWV835768
Registered in Australia Registered in England and Wales
Registered Office: Level 18, 171 Collins Street Registered Office: Nova South, 160 Victoria Street
Melbourne Victoria 3000 Australia London SW1E 5LB United Kingdom
Tel +61 1300 55 4757 Fax +61 3 9609 3015 Tel +44 20 7802 4000 Fax +44 20 7802 4111
Members of the BHP Group which is
headquartered in Australia
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Date: 11/11/2019 07:05:00
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