BHP’s oil, gas output falls 9pc in July-September

UK-Australian resources firm BHP produced 8.8pc less oil and gas in July-September compared with a year earlier, reflecting natural field decline across its upstream portfolio in the US Gulf of Mexico, Australia and Trinidad and Tobago. The company said it is still on track to achieve its guidance for the July 2020 to June 2021 fiscal year.

Total crude, condensate, natural gas liquids (NGL) and natural gas output fell to 290,000 b/d of oil equivalent (boe/d) in July-September from 318,000 boe/d a year earlier, but was largely unchanged from 289,000 boe/d in April-June.

BHP in July forecast its production would fall to 260,000-279,000 boe/d in 2020-21 from 298,000 boe/d in 2019-20.

The year-on-year decline in production also reflected the impact of tie-in and commissioning activities at the latest expansion of the Atlantis oil and gas field in the US Gulf of Mexico. This was partially offset by an earlier-than-scheduled start of production from the phase-three project, in July.

Output at the Shenzi oil field in the US Gulf of Mexico was hit by planned maintenance, while US Gulf of Mexico production was curbed at the end of the quarter in the lead-up to Tropical Storm Laura.

BHP's natural gas production fell by 9pc year on year because of lower output in Trinidad and Tobago, as well end-of-field life at Minerva offshore Victoria.

Domestic gas sales also fell at the company's other operations offshore Australia, including Bass Strait and the 16.3mn t/yr North West Shelf (NWS) LNG venture. Output at NWS LNG venture was affected by adverse weather. But domestic gas sales rose at the company's Macedon operations in the Carnarvon basin offshore Western Australia.

BHP plans to complete its purchase of a 28pc stake in the Shenzi field by the end of this year, increasing its stake to 72pc. The transaction date was set at 1 July, so BHP's total output in July-September will be revised once the purchase is completed.

Production in October-December quarter is expected to reflect tie-in activity for the Trinidad and Tobago Ruby project and the impact of Hurricane Delta in the Gulf of Mexico. A above-average hurricane season in the Gulf of Mexico may affect production further, BHP said.

BHP has a 68.46pc stake in the Ruby oil project , which was 39pc complete at 30 September is and scheduled to start production in 2021.

The company's other upstream project under development, the Mad Dog Phase 2 oil project in the US Gulf of Mexico in which it has a 23.9pc stake, was 80pc complete at 30 September.

By Kevin Morrison

BHP oil, gas, natural gas liquids output (boe/d) Jul-Sept &#39;20 April-Jun &#39;20 Jul-Sept &#39;19 Jul-Sep &#39;20 vs &#39;19 Jul-Sep &#39;20 vs April-Jun &#39;20 Crude, condensate 102,000 104,000 111,000 -8.1 -1.9 NGL 23,000 20,000 25,000 -8.0 15.0 Natural gas (bn cf) 91 90 100 -9.5 1.2 Total 290,000 289,000 318,000 -8.8 0.3 Source: BHP

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