| Fri 26 Oct 2001, 0:00 | | Bhp Billiton Quarterly Report On Exploration And D |
|
July 2001 - September 2001
This report covers exploration and development activities for the quarter
ended September 30, 2001. Unless otherwise stated, BHP Billiton's interest
in the projects referred to in this report is 100 per cent.
MINERALS DEVELOPMENT
Aluminium
Mozal 2 Expansion, Mozambique (BHP Billiton 47.11% interest)
Construction work commenced on the 250,000 tonne per annum Mozal 2 aluminium
smelter project in June 2001. At the end of September, piling was 40 per
cent complete and work on the concrete foundations for buildings and
equipment has commenced. Commitments totaling 58 per cent of budget have
been made. The project, estimated cost US$860 million (BHP Billiton share
US$405 million), is within budget and on schedule for initial production
towards the end of 2003. BHP Billiton has a 47.11 per cent share of Mozal
and manages the project.
Base Metals
Escondida Phase IV Expansion, Chile (BHP Billiton 57.5% interest)
BHP Billiton and its joint venture partners in the Escondida copper mine in
northern Chile continued development activities for the Escondida Phase IV
development project during the quarter. The Phase IV expansion will
increase ore processing capacity by 85 per cent resulting in an average
copper production of 400,000 tonnes per annum (average total production of
1.2 million tonnes per year) over the first five years.
The development has an estimated capital cost of US$1,045 million (BHP
Billiton share US$600 million). All major equipment purchases and
contracting activities have been committed. Concrete and structural steel
placement in the concentrator are well advanced and the setting of equipment
has commenced in some areas. Project mechanical completion is on track for
September 2002 with full production expected to be achieved by April 2003.
Tintaya Oxide Project, Peru (BHP Billiton 99.9% interest)
Construction of the Tintaya Oxide project continued during the quarter. The
Oxide project will increase Tintaya production by 38 per cent with a cathode
capacity of 34,000 tonnes per annum. The development has an estimated
capital cost of US$138 million. Bulk earthworks and concrete works are 95
per cent complete. Mechanical and structural installation works are well
advanced, and piping and electrical installation have also recently started.
The project is currently on schedule and on budget (US$138 million). First
cathode production is expected in early 2002 with full production to be
achieved by mid 2002.
Carbon Steel Materials
Blackwater Integration Project, Queensland (BHP Billiton 50% interest)
The project involves the creation of a single mining entity combining the
South Blackwater open cut operations with the Blackwater mine to produce an
estimated 13.5 million tonnes of coking and thermal coal a year. BHP
Billiton's equity in the project changed on 28 June 2001 as a result of the
formation of the BHP Billiton Mitsubishi Alliance (BMA).
On 25 September 2001, the mines became a single entity on an industrial and
operational basis. Commissioning is progressing well on the pre-strip fleet
of 300-tonne dump trucks - a key project required to meet sales targets.
These trucks have been commissioned some 17 weeks from date of order. A
dragline has also been relocated on schedule as a complete unit some 35kms
from the South Blackwater lease. A significant number of contracts have
been let for the construction of the new industrial area at the mine site
and work is progressing. The mining operation is on target to meet the
project goal of 13.5 million tonnes of saleable coal. Total project capital
remains on target of US$64 million (BHP Billiton share US$32 million).
Energy Coal
San Juan Underground, New Mexico, USA (BHP Billiton 100% interest)
The project involves the development of an underground longwall mine at the
San Juan thermal coal operations in New Mexico, USA. The mine will replace
production from two of BHP Billiton's three existing surface mines. The
project reached 60 per cent completion during the quarter. Three of the
four portal entries were completed, the surface conveyor system erection was
80 per cent completed and the ventilation shaft was excavated to 270
feet (54 per cent complete). Underground mine development reached 47,000
feet (31 per cent complete). Approval of the prototype mining shields
was achieved during September.
Project capital spending is on budget at US$146 million. The completion of
surface facilities is on schedule for March 2002. At present, underground
development mining is approximately six weeks behind schedule.
Mount Arthur North, New South Wales (BHP Billiton 100% interest)
The Mount Arthur North mine will be capable of producing up to 15 million
tonnes of raw thermal coal per annum when full production is achieved in
2006. The Project is on schedule. Commitments for the quarter ended
September 2001 total US$99 million. Capital expenditure for the quarter was
US$7 million. The project has completed its third month of an anticipated 32-
month construction period. Forecast costs to completion remain unchanged at
US$411 million.
During September the design has been frozen on the Coal Handling Plant.
Engineering activities continue to focus on evaluating tenders for long lead-
time items, earthworks and concrete designs, HV power reticulation and
documentation for upcoming tender packages.
The Project Consent Agreement was signed on 5 September 2001 and is now
registered with the New South Wales Industrial Relations Commission.
PETROLEUM DEVELOPMENT
ECHO YODEL, AUSTRALIA (BHP BILLITON 16.7%, NON OPERATED)
The Echo Yodel subsea tie-back project to the Goodwyn Alpha Platform remains
on track with production expected to commence in early 2002. Yodel 4, the
second and final well, was completed in September and hookup to the pipeline
is planned for the end of the year. The production licence has been granted.
Laminaria Phase 2 development, Australia (BHP Billiton 32.6%, non operated)
The project, entailing two new infill subsea wells tied-back to the Northern
Endeavour, is progressing as per schedule with the drill rig contract
awarded in September. The spudding of the first well is planned for January
2002.
Liverpool Bay - Hamilton East Field, UK (BHP Billiton 46.1%, operated)
The Hamilton East single subsea gas well has been successfully drilled,
tested and tied-back to the Hamilton North platform with first gas produced
on 17 September 2001.
North West Shelf expansion, Australia (BHP Billiton 16.67%, non operated)
The construction of the fourth liquefaction processing train has commenced
and work on the foundations began in September. Construction of the
workforce accommodation village in Karratha has begun, with the first stage
due to be finished and occupied before the end of 2001. All long lead items
have been committed with further contracts for mechanical erection on-plot
and heavy lift cranage works to be awarded soon. Front end engineering
design is continuing for the 42-inch second trunkline with major tenders for
linepipe and pipelay contracts currently under review.
OHANET DEVELOPMENT, ALGERIA (BHP BILLITON 45%, JOINT OPERATING ORGANISATION
COMPRISING SONATRACH/BHP BILLITON)
The Ohanet development consists of the development of four gas/condensate
reservoirs in the Illizi Basin in southern Algeria under a Risk Service
Contract with SONATRACH. Three dimensional seismic data acquisition across
all reservoirs was completed in June 2001 and the data is currently being
processed and utilised in reservoir engineering for the development. The
development drilling program has commenced and facilities engineering is
approaching 80 per cent completion. Most major construction sub-contracts
have been award. First production is scheduled for third quarter of 2003.
ROD INTEGRATED DEVELOPMENT, ALGERIA (BHP BILLITON 35.1%, JOINT OPERATING
ENTITY COMPRISING SONATRACH/BHP BILLITON)
The ROD Integrated Development involves the development of six satellite oil
fields in the Berkine Basin in eastern Algeria under a Production Sharing
Contract with SONATRACH. The formal gazettal of the Exploitation Licences
for the first five fields was received in July 2001. In addition, the RAR
discovery was declared commercial in September 2001 and an application for
an Exploitation Licence has been made. All drilling contracts have been
awarded and civil engineering for the drilling campaign is well underway.
The first contract for the long lead engineering items has been awarded and
the other is imminent. It is anticipated that the Engineer-Procure-
Construct (EPC) contract for the production facilities will be awarded in
the fourth quarter 2001. First production is scheduled for 2003.
Typhoon, Gulf of Mexico, USA (BHP Billiton 50%, non operated)
The Typhoon oilfield started production on 31 July. Production from Typhoon
is reported in the BHP Billiton Production report.
MINERALS EXPLORATION
The Exploration Group of BHP Billiton Minerals continued to carry out global
grass-roots exploration for key commodities of interest to the company.
The Junior Alliance Program (third party alliances and joint ventures) has
been greatly enhanced following the merger of BHP and Billiton. This program
emphasises the use of distinctive capabilities and innovative commercial
investments to gain the widest possible exposure to the results of third
party-funded exploration.
The two FALCONTM systems are continuing to fly extensive campaigns in Africa
and the Americas.
PETROLEUM EXPLORATION
Exploration and appraisal wells drilled during the quarter or in the process
of drilling as at 30 September 2001.
WELL LOCATION BHP Billiton STATUS
EQUITY
Atlantis-3 Green Canyon 44%, Operator Encountered
Block 743, - BP hydrocarbon
Gulf of Mexico bearing
reservoirs. For
more information
see News Release
of 11 October.
Atlantis-3 ST Green Canyon 44%, Operator For information
Block 743, - BP see News Release
Gulf of Mexico of 11 October.
Boris-1 Green Canyon 50% BHP Well reached
Block 282, Billiton total depth and
Gulf of Mexico operator was sidetracked
updip.
East Pilchard- VIC/L9, Bass 50%, Cased and
1 Strait, Operator - Suspended.
Australia Esso Australia
Resources
Frampton-1 Green Canyon 44% BHP Plugged &
872, Gulf of Billiton Abandoned.
Mexico Operator For more
information see
News Release of
11 October.
Gnome-1 Atwater Valley 50% BHP Drilling ahead.
Block 18, Gulf Billiton
of Mexico Operator
Ika Marin-1 Tolo Block, 40.12% BHP Drilling ahead.
Gabon Billiton
Operator
Kairi-1 Trinidad Block 45% BHP Plugged &
2(c) Billiton Abandoned. For
Operator more information
see News Release
of 20 August.
Mad-Dog-4 Green Canyon 23.9%, Plugged back and
Block 782, Operator - BP Sidetracked. For
Gulf of Mexico more information
see News Release
of 11 October.
Mad-Dog-4ST Green Canyon 23.9%, See News Release
Block 782, Operator - BP of 11 October.
Gulf of Mexico
Expenditure
Information related to exploration expenditure will be included in the first
quarter BHP Billiton profit report, to be released on 7 November 2001.
MINERALS COMPETENCE AND RESPONSIBILITY
The following statements apply in respect of the information in this report
that relates to any stated Mineral Resources or Ore Reserves.
The information is based on and accurately reflects information compiled by
the person named under each relevant section of the report
Each named person is either a Corporate Member or Fellow of The Australasian
Institute of Mining and Metallurgy or the Australian Institute of
Geoscientists, or a Recognized Mining Professional under the ASX listing
rules, and is a full-time employee of a member company of the BHP Billiton
Group;
Each named person has sufficient experience which is relevant to the style
of mineralisation and type of deposit under consideration and to the
activity which he or she is undertaking to qualify as a Competent Person as
defined in the 1999 Edition of the "Australasian Code for Reporting of
Mineral Resources and Ore Reserves". Each named person consents to the
inclusion in the report of the matters based on their information in the
form and context in which it appears.
***
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