121202jefferiesglobalenergyconferencejmypresentation

8/2/2019 121202jefferiesGlobalEnergyConferenceJmyPresentation

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Jefferies Energy Conference

J. Michael YeagerChief Executive BHP Billiton Petroleum

ecem er 2010


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Disclaimer

Reliance on Third Party Information

The views expressed here contain information that has been derived from publicly available sources that have not beenindependently verified. No representation or warranty is made as to the accuracy, completeness or reliability of theinformation. This presentation should not be relied upon as a recommendation or forecast by BHP Billiton.

Forward Looking Statements

This presentation includes forward-looking statements within the meaning of the U.S. Securities Litigation Reform Act of1995 regarding future events and the future financial performance of BHP Billiton. These forward-looking statements arenot guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and otherfactors, many of which are beyond our control, and which may cause actual results to differ materially from thoseex ressed in the statements contained in this resentation. For more detail on those risks ou should refer to the

sections of our annual report on Form 20-F for the year ended 30 June 2010 entitled Risk factors, Forward lookingstatements and Operating and financial review and prospects filed with the U.S. Securities and Exchange Commission.

No Offer of Securities

Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell BHP Billitonsecurities in any jurisdiction.

Non-GAAP Financial Information

BHP Billiton results are reported under International Financial Reporting Standards (IFRS). References to UnderlyingEBIT and EBITDA exclude any exceptional items. A reconciliation to statutory EBIT is contained within the profitannouncement, available at our website www.bhpbilliton.com.

BHP Billiton Petroleum, Jefferies Energy Conference, December 2010 Slide 1


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Agenda

BHP Billiton Corporation overview

Petroleum overview

Petroleum performance

ear erm ou oo

Lon er term o ortunities

Summary

Slide 2BHP Billiton Petroleum, Jefferies Energy Conference, December 2010


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BHP Billiton CorporationA global upstream portfolio

Base Metals

#3 global producer of copper,silver and lead

Aluminium

#4 global producer of bauxite and #4 aluminiumcompany based on net third party sales

Petroleum

A 450mbd oil and gas explorationand production business

Stainless Steel Materials

#3 global nickel producer

Iron Ore

One of the worlds premier suppliers of iron ore

Manganese Metallurgical Coal Energy Coal

Diamonds & Specialty Products

EKATI Diamond Mine is one of the worldslargest gem quality diamond producers

Operations produce a combination of ores,

alloys and metal

Produce and market high quality hard coking

coals for the international steel industry

One of the world's largest producers and

marketers of export thermal coal

Aluminium

Base Metals

Diamonds & Specialty Products

Energy CoalIron Ore

Manganese

Metallurgical Coal

Petroleum

Stainless Steel Materials

Offices



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The power and reach of a super major behindBHP Billiton Petroleum

BHP Billiton has theMarket Capitalisation at 31 October 2010(US$bn)

balance sheet to

undertake large and

com lex ro ects300

3504th largestcompanyinthe

worldbymarketcapitalization

Diversified portfolio

balances risk150

200

250

Long term view with

investment through

the cycles

50

obil

ple o

ft

iton

ras

hell

art

way

gle

stle

BC

BM

ble

son

tric

Inc

ron

ale rt

isase

ExxonM A

p

Micro

BHPBilli

Petrob

Roy

alDutchS

Wal-

rks

hireHatha

Goo

Ne

HS I

rocter&Gam

hns

on&John

GeneralEle

AT&T

Chev V

Nov

PM

organCh

B Jo


Source: Bloomberg

Petrochina, Ind & Commercial Bank of China, China Mobile and China Const Bank have been excluded due to high percentage of non free float shares.


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Petroleum is a significant contributor to theBHP Billiton Group

Underlying EBIT margin(a)Underlying EBIT(a)

,

34%Metallurgical Coal

,

18

21

Metallurgical Coal

$19.7B

54%

anganese

Iron Ore15

Ferrous

(43.5%)Iron Ore

38%D&SP

9

12

Non Ferrous

D&SPSSM

49%

13%

Base Metals

Aluminium6

(30.6%)

Aluminium

Energy Coal

Base Metals

20%

53%

Energy Coal

Petroleum

0

3 Energy

(25.9%)Petroleum

$4.6B

Slide 5

(a) Excludes third party trading.

BHP Billiton Petroleum, Jefferies Energy Conference, December 2010


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Agenda


Petroleum overview


ear erm ou oo Lon er term o ortunities

Summary



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Core Strategy

Be functionally strong where we compete

Fundamentals focus safety, volume, cost

Take large, operated positions with multiple long life opportunities

,

Pursue commercial opportunities that fit and add to corporate



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Large Positions

UK

Petroleum HQ

Gulf of Mexico

Pakistan

Trinidad

MalaysiaVietnam Philippines

Western Australia

Bass Strait

Slide 8

Exploration Proven BasinsProducing and development



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Very simple organisational modelGlobal functional organisation

Exploration Development Production Marketing

Safety Safety Safety Revenue per barrel

Resource adds

Finding costs

Development Plans

Project Execution

Volumes

Per barrel costs

Facilities integrity

Global Support Functions

(HSEC, Planning, Human Resources, Finance, Legal, External Affairs and Information Technology)



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Two organisational principles

Excellence

Petroleum Headquarter Houston Centralised management/planning Centralised services Common worldwide standards

Western Bass Gulf of

Functional excellence

Australia Strait Mexico

Strong local operating units Execution

Receive services ere to wor w e stan ar s

mboed Employees Employees/mboed

2007 310 1,350 4.3

Slide 10

2010 450+ 1,566 3.4



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Agenda


Petroleum overview Petroleum performance

ear erm ou oo


Summary



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Outstanding performance metrics acrossthe board

Four years of annual gains ...

Excellent safety performance

100% reserves replacement FY2007-FY2010

Low operating cost/boe

Low de reciation er barrel for international inde endent oil and as

High quality barrels for top EBIT/boe margin

Delivering excellent EBIT return on capital employed



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SafetyContinued focus

Total Recordable Incident Frequency Rate (TRIFR)(Incidents per million hours worked)

2.36 Total Recordable

Incident Rate in FY2010

5

Follows best everPetroleum performance inFY2009 at 1.9 TRIFR3

Part of functionalexcellence approach2

1 LTI in the last 14 months1

0

FY2006 FY2007 FY2008 FY2009 FY2010



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SafetyLost Time Injury performance

Slide 14

BHP Billiton (FF)Source: OGP Independent Study 2009



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Volume history

Excellent FY2010 result(mmboe/year)

Volume up 15% year on year

Base production wellmana ed with > 93%160

170

434 mbd

operated uptime

Growth leveraged towards140

150

11%

378 mbd

terms

Average 11% growth per130

354 mbd

year since FY2007

At top of industry110

120 318 mbd

100

FY2007 FY2008 FY2009 FY2010



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Operating cost

3 year average operating cost per boe, FY2008FY2010(US$/boe)

operating costs

Costs controlled in a difficult

15

environment

Significant focus on the9

fundamentals

Equipment reliability /uptime

6

Maintenance / shutdowns

Aviation and marine

lo istics

3

0Anadarko BHP

BillitonDevon Apache Murphy Hess Talisman


Source: Company reports. Data presented on a normalised basis to exclude one-off events and activities that were not considered part of E&P operations.


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Depreciation

Depreciation per boe vs Peer Group, FY2008 - FY2010(US$/boe)

Competitive depreciation per

boe despite recent higher

25

Depreciation per boe15 Peers

FY201110 BHP Billiton

5

0

FY2008 FY2009 FY2010




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Reserve replacement

net mmboe

159

152 144

172

150

180Production Volume*

Reserves Adds

116

130

120120

60

90

30

0

FY2007** FY2008 FY2009 FY2010

**Excludes asset sales.

* Restated Production Volumes between Gas & NGLs



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EBIT margin

3 year average EBIT per boe, FY2008FY2010(US$/boe)

Liquids priced barrels

FY2006: 62% of 310 mbd

30

40

FY2010: 73% of 434 mbd

Combined with low cash and0

10

non-cash costs for excellentmargin

Billiton

urp y ess pac e evon na ar o a sman

3 year average EBIT margin, FY2008FY2010(% of revenue)

40

60

80

0

20


Billiton



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EBIT return on capital employed

3 year average EROC(%, FY2008FY2010)

Efficient capital investment50

60

Project costs as planned

40

performance

All phases of execution20

30

an e we

10

0BHP

BillitonMurphy Hess Apache Devon Talisman Anadarko




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Industry leading drilling performance

Gulf of Mexico deepwater (>2,000 ft water depth) exploration and appraisal wells, 1/2000 11/2009

,

7

8

5

6

4

2

0

BHP Anadarko Shell BP Chevron Conoco ExxonMobil Hess Devon

106wells

49wells

44wells

42wells

9wells

11wells

13wells

5wells

24wells



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We operate two of the worlds deepest TLPs



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Key messages

Scalable organisation

Highly functional but low cost organisation

Add more barrels without overhead growth

Production growth at 11% CAGR since FY2007

Projects on time and on budget

Flawless drilling execution

Cost control

Low operation costs

Focused on the basics

EBIT return on capital employed leads industry



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Agenda


Petroleum overview


ear erm ou oo


Summary



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Ongoing Programs and Projects

Oil

Gas

LNG

UK

Liverpool Bay (46.1%)

Beginning gas blowdown

Pakistan

Zamzama (38.5%)

Front-end Compression

North West Shelf 16.67%u o ex co

Atlantis (44.0%) South infill drilling and Water

Injection

North development drilling Western Australia

Petroleum HQ

North Rankin B

New compression platform

CWLH Life Extension

FPSO replacement

Shenzi (44.0%)

Infill drilling

Water Injection project

Trinidad

Angostura

Angostura Gas Project

Infill drilling program oil

Angostura (45.0%)

Macedon (71.43%)

Subsea wells and gas plant

Kipper

Two well subsea tie-back

Turrum

New Marlin B platform



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Atlantis2nd largest field in Gulf of Mexico

??Oil In Place

Development drilling expected to re-

Initial 2 North wells indicate strong

production potential

South North East South water injection project in

progress

NorthEast

ou



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Shenzi

Design capacity of 100 mbd

Initial production 140 mbd

20 months into production and stillover 90 mbd

Water injection project in progress

and on schedule

B101East

North

West

Drilling of additional up-dip wellsinto new reservoirs to follow

B201

I-1

I-3

I-4

- rst to resume r ng n t e

GOM under new regulations

Slide 27

-



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Pyrenees

Ownership:BHPB (Operator) 71.43%Apache 28.57%

Water Depth: 180-220 m

First Oil : Feb 2010

One of Australias largest subsea projects

First BHP Billiton Petroleum FPSO fabricated in China

Started up in February on schedule and budget

Ramped up to nameplate capacity (96 mbd) in 11 days



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FY2011 production outlook

(mmboe) FY2011 outlook

160

170

Moratorium

volume

Full year of Pyrenees volume

-

150

Continued growth impacted by

drillin moratorium in the Gulf of

130Mexico high rate wells deferred

Volumes projected flat for FY2011

110

120

100

FY2010 FY2011E



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Agenda


Petroleum overview


ear erm ou oo


Summary



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SummarySignificant resource position for long term growth

Reserves and Resources 3,715 mmboe

(mmboe, as at 30 Jun 2010)

4,500

5,000Gas

Oil Probable Reserves plus

Forecast Capital Expenditure for

Browse and Scarborough

3,500

4,000

2,231 mmboe

Browse

Scarborough 2.0

2.5

(US$bn)

2,500

3,000 Exmouth

NWSBass Strait

0.5

1.0

1.5

1,500

,Proved Reserves

1,394 mmboeMad Dog

Shenzi

Bass Strait 0.0

FY2011FY2012FY2013FY2014FY2015

0

500

,



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High impact pre-development projects

Oil

Gas

LNG

Petroleum HQ

North West Shelf

NWS Greater Western Flank

Gas fields developmentGulf of Mexico

Western Australia

ScarboroughThebe

Browse

Eastern Australia (50%)

a og ase 2

New Host facility anddevelopment wells

Atlantis North Phase 2B

Additional subsea manifoldBass Strait Longford

Gas conditioning plant

an eve opmen we s

Knotty Head

Gunflint


M d D


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Mad DogContinues to get bigger

Oil In Place??

North & GrabenAppraisal Potential

North

-

East

Current S ar cannot drain all discovered

West South North

Spar Location

oil to date

West and South areas cannot be fullyreached

West East

Optimised development scheme willdouble ultimate recovery

East - Producing

Mad Do South options for second Spar

North area to be appraised duringFY2011 can be tied into main S ar for

Lower Miocene South

appraisal well& sidetrack

Slide 33

near term barrels



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Browse LNG long term growth opportunity

Torosa

Brecknock

Three large gas fields with 14 tcfrecoverable reserves

Source: Wood Mackenzie

Calliance

Retention Lease accepted withDerby

.

program (100%)

Gas fields

upstream facilities and downstreamLNG plant

Slide 34

Source: Woodside.


Scarborough/Thebe long term growth


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Scarborough/Thebe long term growthopportunity

High equity giant gas fields with 10 tcf

Thebe 100% BHP Billiton

Scarborough 50% BHP Billiton

- -

Thebe Gas fields

US$15-20 billion dollar investment (100%)

expected for development of upstream facilitiesWA-351-P

Scarborough

Concept select studies progressing and site

geotechnical survey work commenced

WA-335-P

Planning for FEED commencement FY2011

Strong BHP Billiton position currently

StybarrowPyreneesMacedon

Production

Projects

Slide 35

Exploration


M lti ear e ploration drilling program nder a


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Multi-year exploration drilling program underwayFocus on proven basins

Material in size to BHP Billiton

Balance proven plays and frontier exploration

Exploration Strategy

Material in size to BHP Billiton

Balance proven plays and frontier exploration

Exploration Strategy

Opportunities with potential for multiple successes

Control and Operatorship

Opportunities with potential for multiple successes

Control and Operatorship

Gulf of Mexico5+ wells

South China Sea5+ wells

Exmouth5+ wells

Gippsland2+ wells

Slide 36

FrontierExploration Proven Basins



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Agenda


Petroleum overview


ear erm ou oo


Summary


Summary


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SummaryKey messages

An integral part of BHP Billiton Group

Strong performance in key commodity

Strong functional capability

Safety, volumes, cost outstanding metrics

Highly competitive versus peers

Nearer term

Near-term volumes impacted by the GOM moratorium, but returning to work

Driving investment in multiple world class projects and drilling

Longer term opportunities

Significant, focused Exploration program

Advancing world class resources in Western Australia

Slide 38



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