BHP Operational Review For Half Year ended 31 December 2015

This is a synopsis of today’s news release by BHP BILLITON

Production summary for Dec half compared with previous corresponding half.

  • Petroleum (MMboe) 125 (5%)
  •  Copper (kt) 762 (5%)
  •  Iron Ore(Mt) 118 4%
  •  Metallurgical coal (Mt) 21 (3%)
  •  Energy coal ` 19 (3%)

“The strong performance of our conventional petroleum assets has offset lower shale volumes following a reduction in investment to preserve the value of our acreage in current market conditions”. CEO Andrew McKenzie

Average Realized Prices Dec Half compared with previous corresponding half

  • Oil (US$/bbl) 42 (51%)
  • Natural gas (US$/Mscf) 2.91 (31%)
  • US Natural gas (US$/Mscf) 2.35 (40%)
  • LNG (US$/Mscf) 8.24 (40%)
  • Copper (US$/lb) 2.12 (29%)
  • Iron Ore (US$/wmt, FOB) 43 (39%)
  • Thermal coal (US$/T) 49 (20%)
  • Nickel metal (US$/t) 9,926 (41%)

Additional Charges in the Dec 15 half.

From redundancies, terminations, closure of Crinum coal mine, inventory write-downs from weaker commodity prices, royalties and taxation charges.

Total charges:

  • to Underlying EBIT – 425 – 575 US$ million
  • to Underlying Attributable Profit –300 to 450 US$ million


Write downs to be recognized 15 January 2016

This is estimated to be approximately US$4.9 billion post tax or US#7.2 billion pre-tax to be reported in February 2016.
This reflects changes to price assumptions with declining prices, and volatility, offsetting productivity gains.
Samarco Iron Ore Mining Disaster in Brazil
BHP has a 50% equity investment in Samarco which experienced breaches in a tailings dam and in a water dam on the 5th November 2015. The cost of remediation and compensation is still being estimated, and will be listed as an exceptional item.
Total iron Ore production for FY 2016 is likely to be reduced as a result of suspension of Samarco operations by 10 Mt to 237Mt.
Major New Projects
There are four under development. The North West Shelf Greater Western Flank-A project has been completed ahead of schedule and under budget, as is now producing.

Categories: Company review, Uncategorized

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