BHP year-end 2020 production down slightly, additional decrease expected in 2021
BHP’s total petroleum production volumes for the full year ended the 30th June decreased marginally below guidance as a result of weaker than expected gas demand due to the impact of COVID-19 and a decrease in tax barrels at Trinidad and Tobago due to low commodity prices in the June 2020 quarter, the company said in an update on the 21st July.
For the year, total petroleum production decreased by 10% to 109 MMboe. Total petroleum production guidance for the 2020 financial year was 110-116 MMboe in January.
Volumes are expected to decrease to 95-102 MMboe in the 2021 financial year, reflecting expected lower gas demand in Eastern Australia and Trinidad and Tobago, the previously reported delay of several small and medium sized projects with short lifecycles and natural field decline across the portfolio.
Crude oil, condensate, and natural gas liquids production decreased by 11% to 49 MMboe due to the impacts of Tropical Storm Barry in the Gulf of Mexico, Tropical Cyclone Damien at the North West Shelf operations, maintenance at Atlantis, and natural field decline across the portfolio.
Weaker market conditions, including impacts from COVID-19, also contributed to lower volumes in the June 2020 quarter. The decline was partially offset by higher uptime at Pyrenees following the 70-day dry dock maintenance program during the prior year.
Natural gas production decreased by 9% to 360 bcf, reflecting a decrease in both production and tax barrels (in accordance with the terms of a production sharing contract) due to weaker market conditions in Trinidad and Tobago, impacts of maintenance, and Tropical Cyclone Damien at North West Shelf and natural field decline across the portfolio.
Production projects
In the US Gulf of Mexico, the Atlantis Phase 3 project (non-operator, 44%) is 79% complete.
Development includes a new subsea production system which will tie back to the existing Atlantis facility, with capacity to produce up to 38,000 gross b/d of oil. Initial production is on track for this year.
The Mad Dog Phase 2 project in the US Gulf of Mexico (non-operator, 23.9%) is 77% complete. The project includes a new floating production facility with the capacity to produce up to 140,000 gross b/d of crude oil. Initial production is targeted for 2022.
In Trinidad and Tobago, the BHP-operated Ruby project (68.46%) is 28% complete. The project includes five production wells tied back into existing operated processing facilities, with capacity to produce up to 16,000 gross b/d of oil and 80 million gross standard cu ft of natural gas per day. Initial production is targeted for 2021.
The Bass Strait West Barracouta project is tracking to plan and is expected to achieve first production in the 2021 calendar year despite delays in component delivery and equipment fabrication due to COVID-19 restrictions.
Exploration
No exploration and appraisal wells were drilled during the June 2020 quarter.
The Deep-water Invictus rig is expected to mobilize to Trinidad and Tobago in the September 2020 quarter to drill one exploration well, Broadside, in the southern licenses as part of Phase 5 of a deep-water drilling campaign, subject to any further COVID-19 restrictions.
In the US Gulf of Mexico, following lease sale 254, blocks GC80 and GC123 were awarded in July, building on the company’s Green Canyon position. Block GB721 was awarded in June, expanding the western Gulf of Mexico position. The company is the apparent high bidder on Blocks AC36, AC80, AC81 in the western Gulf of Mexico.
Prospect maturation is being completed for the recently acquired Green Canyon blocks, with plans to drill an exploration well during the 2021 calendar year.
In the Gippsland basin, BHP participated in a multi-client 3D seismic survey (non-operated) which is expected to be completed in the September 2020 quarter.
Petroleum exploration expenditure for the 2020 financial year was US$564 million, of which US$394 million was expensed.
Updated capital and exploration expenditure guidance for the 2021 financial will be released on the 18th August.
Source: Oil & Gas Journal