Qrtly Production Report - Pt2
Broken Hill Proprietary Co Ld
26 October 2000
PART 2
PRODUCTION AND SHIPMENT REPORT (1) - SEPTEMBER 2000
QUARTER ENDED 3 3
MONTHS MONTHS
30 SEP 30 SEP TO SEP TO SEP
2000 1999 2000 1999
STEEL - CORE BUSINESSES (1)
('000 tonnes unless stated otherwise)
Production
Iron Sands - New Zealand 723 576 723 576
Coke - Australia 616 599 616 599
Iron - Australia 1 298 1 273 1 298 1 273
Raw Steel - Port 1 308 1 275 1 308 1 275
Kembla
Steelworks
- 147 131 147 131
Glenbrook
Steelworks
(NZ)
Total Raw Steel 1 455 1 406 1 455 1 406
Raw Steel - Delta, 193 171 193 171
Ohio USA
(5)
Marketable steel products
Flat Products - Flat and 1 242 1 240 1 242 1 240
Tinplate
Products
Coated - Rolled 531 529 531 529
Products and Coated
Products
- Flat and 137 129 137 129
Coated
Products
(NZ)
- Rolled 70 71 70 71
and Coated
Products
(Offshore)
Building 40 45 40 45
Products
(Includes
offshore)
Sub Total (2) 1 425 1 402 1 425 1 402
- Delta, 189 168 189 168
Ohio USA
(5)
Despatches (3)
Business Unit - Flat 1 243 1 285 1 243 1 285
Products
- Coated 732 771 732 771
Products
Sub Total (4) 1 236 1 191 1 236 1 191
External Australia - Domestic 485 518 485 518
- Export 541 445 541 445
New Zealand - Domestic 67 45 67 45
- Export 68 108 68 108
Other 75 75 75 75
Offshore
Total 1 236 1 191 1 236 1 191
Delta, Ohio USA (5) 190 165 190 165
(1) Includes BHP's share of production from joint ventures and 100% of
production from controlled entities.
(2) The total excludes production for intra-business sales. Therefore, the
total figure for BHP Steel is less than the sum of the individual
businesses.
(3) Steel products only. Excludes pig iron and by-products.
(4) The total excludes intra-business despatches. Therefore, the total figure
for BHP Steel is less than the sum of the despatches of the individual
business units.
(5) Investments. Production and despatches reported is that proportion of total
production and despatches determined by BHP's equity interest: North Star
BHP LLC (50%).
PRODUCTION AND SHIPMENT REPORT (1) - SEPTEMBER 2000
QUARTER ENDED 3 3
MONTHS MONTHS
30 SEP 30 SEP TO SEP TO SEP
2000 1999 2000 1999
STEEL - DISCONTINUING OPERATIONS (1)
('000 tonnes unless stated otherwise)
Production
Iron Ore - Australia 656 694 656 694
Coke - Australia 149 313 149 313
Iron - Australia 270 699 270 699
Raw Steel - Whyalla 245 247 245 247
Steelworks
- Newcastle 0 434 0 434
Steelworks
- Sydney 128 99 128 99
Steel Mill
Total Raw Steel 373 780 373 780
Marketable steel products
Long Products - Rod, Bar 119 182 119 182
and Wire
Products
- Structural 223 225 223 225
& Rail
Products
- Merchandising 209 229 209 229
and Tube
Products
Other - Roll 0 112 0 112
Offshore Formed
(USA) Products
Sub Total (3) 540 809 540 809
Despatches (2)
Business Unit - Long 527 682 527 682
Products
- Other 0 111 0 111
Offshore
(USA)
Sub Total 527 793 527 793
External Australia - Domestic 482 540 482 540
- Export 45 142 45 142
Offshore 0 111 0 111
Total 527 793 527 793
(1) Includes BHP's share of production from joint
ventures and 100% of production from
controlled entities.
(2) Steel products only. Excludes pig iron and by-products.
(3) The total excludes production for intra-business
sales. Therefore, the total figure for
BHP Steel is less than the sum of
the individual businesses.
PRODUCTION AND SHIPMENT REPORT (1) - SEPTEMBER 2000
QUARTER 3 3
ENDED MONTHS MONTHS
30 30 TO TO
SEP SEP SEP SEP
2000 1999 2000 1999
PETROLEUM (1)
Crude Oil & Condensate ('000 barrels)
Australia / Asia
Bass Strait 7 807 9 773 7 807 9 773
North West Shelf
- Condensate 1 225 1 499 1 225 1 499
- Wanaea/Cossack 1 682 796 1 682 796
Laminaria 4 369 0 4 369 0
Buffalo 757 0 757 0
Other Australia
- Griffin 1 991 1 867 1 991 1 867
Asia - PNG 0 724 0 724
Americas 826 968 826 968
Europe/Russia/Africa/Middle East
Liverpool Bay 1 716 1 616 1 716 1 616
Other Europe - Bruce 447 511 447 511
Total 20 820 17 754 20 820 17 754
Natural gas (billion cubic feet)
Australia / Asia
Bass Strait 27.78 25.35 27.78 25.35
North West Shelf - Domestic 3.13 3.47 3.13 3.47
North West Shelf - LNG 15.19 15.55 15.19 15.55
Griffin 0.75 0.42 0.75 0.42
Americas 5.21 3.81 5.21 3.81
Europe/Russia/Africa/Middle East
- Bruce 5.01 1.91 5.01 1.91
- Liverpool Bay 4.68 6.41 4.68 6.41
Total 61.8 56.9 61.8 56.9
LPG ('000 tonnes)
Bass Strait 127.94 130.86 127.94 130.86
North West Shelf 31.48 27.87 31.48 27.87
Griffin 1.57 1.37 1.57 1.37
Bruce 11.57 6.45 11.57 6.45
Total 172.6 166.6 172.6 166.6
Ethane ('000 tonnes) 23.19 22.25 23.19 22.25
Methanol ('000 tonnes) 0.00 8.83 0.00 8.83
(1) Includes BHP's share of production from
joint ventures and 100% of production
from controlled entities.
THE BROKEN HILL PROPRIETARY COMPANY LIMITED
QUARTERLY REPORT ON EXPLORATION AND DEVELOPMENT
July 2000-September 2000
This report covers exploration and development activities for the quarter
ended September 30, 2000.
Unless otherwise stated, BHP's interest in the projects referred to in this
report is 100%.
DEVELOPMENT PROJECTS
The following projects are in various stages of development:
MINERALS
Copper Projects
Escondida Phase IV Expansion, Chile (BHP 57.5% interest)
The current engineering and procurement phase for the proposed 110,000 tonnes
per day sulfide concentrator reached 93% completion during the quarter. The
joint venture partners continued to evaluate the final feasibility study
report.
Tintaya Oxide Project, Peru
Work continued on completing the feasibility study phase and progressing
engineering activities, now 70% complete. Cost estimates are being reviewed
and a final feasibility study report is nearing completion prior to evaluation
and presentation for approval.
Escondida Norte, Chile (BHP 57.5% interest)
The pre-feasibility study report will be completed in November and submitted
for approval to proceed to feasibility study starting in December 2000. The
Environmental Impact Study was awarded to CH2M Hill and will be completed in
October. The study will then be submitted to the Antofagasta community for
public comments during November 2000.
Tintaya Antapaccay Project, Peru
Work completed during the quarter was focused on understanding the geologic
controls of mineralization and the building of a block model that represented
these conditions. A drilling program was completed that targeted all
potential areas of skarn within the defined pit limits. Studies on ways to
reduce mining costs were initiated. The drilling program to further evaluate
the potential of the project, which started in January, was completed during
the quarter. Drilling on the project now totals 79,500 metres. Metallurgical
test-work indicates that all ore types respond well to flotation and
concentration. Assessment of development options, based on a project with a
stand-alone concentrator processing between 30,000 to
60,000 tonnes per day of ore, is continuing.
Agua Rica, Argentina (BHP 70% interest)
The joint venture is continuing to evaluate development options for the
project that may reduce capital and operating costs. Activity at the field
site was limited to environmental monitoring and tenement management.
Iron Ore Projects
HBI Joint Venture, Iron Ore, Venezuela (BHP 50% interest)
The two trains on Module 1 have been in production since June 2000 and
commissioning continues. Construction on Module 2 is nearing completion, with
Train 1 (of Module 2) due to startup in November and Train 2 (of Module 2) by
end of this calendar year. Commissioning activities to ramp up production
will continue into the third quarter of next calendar year. The construction
project's lost time injury frequency rate stands at 0.76.
Mining Area C, Iron Ore, Western Australia (BHP 85% interest)
Negotiations with registered groups under the Native Title Act Section 29
notice proceeded during the quarter and agreement has been reached with one
group pertinent to an infrastructure title and with one group pertinent to the
mining lease. A consultants report has been received recommending an eastern
rail alignment. Engineering studies are proceeding to further refine the
capital costs of this alignment.
Coal Projects
San Juan Underground, New Mexico, USA (BHP 100% interest)
Evaluation of the proposed San Juan Underground coal mine continued during the
quarter. The feasibility study was completed and the project is in the final
stage of governance verification and approval.
Although announced after the end of the quarter, the following materially
relevant information about the San Juan Underground project was released on
October 17th:
'The Broken Hill Proprietary Company Limited (BHP) today announced approval
for the development of an underground longwall mine at its San Juan thermal
coal operations in New Mexico, United States.
The mine will replace production from two of BHP's three existing surface
mines (San Juan & La Plata) and will be the sole coal source for the adjacent
San Juan Generating Station.'
Goonyella Mine, Queensland (BHP 52.1% interest)
Exploratory mining of a three-heading Adit in the Middle Seam down-dip from
the Goonyella highwall continued. Results so far have generally confirmed the
interpretations made from surface drilling and seismic surveys. At the end of
September a total of 11,126 metres of development had been completed out of a
projected total of 12,460 metres.
Small scale faulting has slowed development and led to a budget overrun of
about 10%. It is now expected the adit will be completed in December, two
months behind schedule. Feasibility studies for a proposed longwall mine are
on going.
Saraji Mine, Queensland (BHP 52.1% interest)
Exploration activities for the Saraji longwall pre-feasibility study continued
focusing on identifying additional reserves of appropriate quality coking
coal.
South Walker Creek, Queensland (BHP 52.1% interest)
South Walker Creek is a contractor-operated open cut coal operation. Market
demand now exists which will accommodate an increase in sales of PCI coal to
3.35Mtpa and thermal coal to 0.3Mtpa. The current railing contract with
Queensland Rail is limited to 3.1Mtpa due to the existing spur line and train
loading arrangement. Extension of this contract to 3.65Mtpa is dependant on
the extension of the rail spur and construction of loop, train loading
facility and product coal handling system.
Illawarra Coal, Dendrobium Project
The Dendrobium project has moved into the feasibility phase. This includes
carrying out additional exploration to prove up the resource; engineering
studies to detail mine design, capital and operating costs; pursuing necessary
Government approvals, and firming up the relevant markets.
Base Metal Projects
Gag Island Nickel, Indonesia (BHP 75% interest)
Discussions continue with both Pt Aneka Tambang and Falconbridge to resolve
the various outstanding issues relating to Falconbridge joining the Gag Island
joint venture. The issues in question include:
clarification of the commercial arrangements with P.T. Aneka Tambang;
clarification of the forestry classification on Gag Island; and
resolution of the scope of work for the proposed feasibility study.
The forestry issue is much broader than Gag Island, with most of the recent
COW's awarded to companies impacted by the legislation currently in place.
The Indonesian Authorities have recognized the negative impact of this
legislation on mining investment in Indonesia and are actively discussing
appropriate amendments.
Diamonds and Industrial Minerals Projects
Ekati Diamonds, Canada (BHP 51% interest)
On-site processing of the Wolverine, Zach, Cougar and Lynx kimberlite samples
was completed during the quarter. Concentrates are currently being sorted and
complete results will be reported next quarter.
Exploration core drilling during the quarter intersected eleven additional
kimberlite pipes bringing the total number of confirmed kimberlite occurrences
to 136. Nine of the discoveries are located within the core zone and two of
the discoveries are within the buffer zone claims. Microdiamond analyses are
in progress. Any significant microdiamond results will be reported next
quarter.
PETROLEUM
Griffin, Australia (BHP 45% interest, operated)
The tie-ins of the two new infill wells drilled in the previous quarter,
Griffin-8 and Scindian-3, to the FPSO the Griffin Venture were completed in
July 2000. Production commenced in July with initial incremental production
of 20,000 bopd (gross).
Work continues on reprocessing of the 3D seismic dataset and further
development opportunities in the Griffin area, including a potential Griffin-9
infill well.
Keith, North Sea (BHP 31.83% interest, operated)
The Keith oil field is located in North Sea Block 9/8a. The subsea
development of Keith involves the re-use of a suspended appraisal well, which
will be tied back seven kilometres to the Bruce Western Area Development.
This single well will access around 15 mmboe of proved and probable reserves
(4.8 mmboe net to BHP). Capital expenditure is estimated at around A$19
million net to BHP.
During the quarter, the seven kilometre long pipeline bundle which will link
the Keith field to the Bruce Western Area development was completed at
Halliburton's Wester Site. It was towed to the Keith field, positioned on the
seabed and tied into the Bruce Western Area Subsea Manifold.
Tansocean Sedco Forex's John Shaw mobile offshore drilling unit (MODU) arrived
on the field during the early part of September and commenced the abandonment
of two wells adjacent to the Keith well and the re-entry of the 9/8a-14 well.
Fabrication of the 46 tonne subsea Christmas tree by Kvaerner Oilfield
Products was also finished and shipped from Kvaerner's works in Aberdeen to
the John Shaw ahead of the start of the well re-entry work. The project is
within budget and first oil is projected for early November.
Ohanet Development, Algeria (BHP 60% interest. Joint operating entity
comprising SONATRACH/BHP)
On 3 July 2000 BHP announced it had signed a Risk Service Contract (RSC) with
SONATRACH, the Algerian national oil company for the development of four
gas/condensate reservoirs in the Ohanet region of Algeria. The participants
in the venture are BHP 60%, Japan Ohanet Oil & Gas Co Ltd 30%, and Petrofac
Resources (Ohanet) LLC, 10%.
The Engineering, Procurement and Construction Contract officially commenced
with ABB/Petrofac on 9 October 2000.
Tenders are being prepared and issued for 3D seismic, drilling rigs, and
drilling services contracts with a view to commencing seismic operations at
the end of 2000 and drilling operations in the first or second quarter of
2001.
First production is scheduled for October 2003 and peak liquids production
will be around 58,000 barrels per day. BHP's share of revenue is taken from
its share of condensate and LPG produced.
ROD Integrated Oil Field Development, Algeria (BHP 17.3% interest. Joint
operating entity comprising SONATRACH/BHP/AGIP)
The Rhourde Oulad Djemma (ROD) integrated oil field is located in the Berkine
Basin of Algeria. BHP's partners in the US$500 million development are
SONATRACH, the Algerian state oil company and AGIP Algeria Exploration BV (the
Algerian operating company of ENI SpA).
Five fields will be developed - ROD, SFNE, RERN, BSF and RDB - all of which
are located in Blocks 401a/402a. A Unitisation Agreement has been put in
place to give joint operatorship and commercial arrangements for the
development, giving BHP approximately 17% of overall project reserves. After
grossing for Algerian taxes, BHP's share is around 60 million barrels of the
proven and probable hydrocarbon reserves.
During the quarter tenders were issued for drilling rigs and drilling services
contracts with a view to commencing drilling operations in the first or second
quarter of 2001. The Front End Engineering Design services contract was
awarded to Parsons in September, with completion expected by January 2001.
Typhoon, Gulf of Mexico (BHP 50% interest, non-operated)
The Typhoon development, consisting of the subsea completion and tieback of
the four existing appraisal wells to a mini tension leg platform (TLP), is
being developed jointly by Chevron (50%, operator) and BHP (50%). Peak
production of 40,000 bopd and 60 mmscfd (gross) is expected, with first
production scheduled for third quarter 2001.
Well completion activities began offshore in September and will continue
through to April 2001. The piles for the TLP were installed in September.
Construction on the TLP hull and topsides at McDermott's yard in Morgan City,
Louisiana, is continuing on schedule for installation second quarter 2001.
Zamzama Extended Well Test, Pakistan (BHP 38.5% post commerciality equity,
operated)
The development work on the Extended Well Test is continuing with first gas
expected in 2001.
EXPLORATION
MINERALS
The Discovery Group of BHP Minerals carries out worldwide grass-roots
exploration for all BHP's minerals businesses. During the quarter a process
of re-organisation to align the Discovery Group with the BHP Minerals
portfolio management model was completed.
The Discovery Group is also responsible for exploration and development work
related to existing mines.
Falcon Airborne Gravity Gradiometer Technology.
The deployment of BHP's proprietary airborne gravity gradiometer technology
(called 'Falcon') is continuing to proceed very well in Australia and North
America. During the quarter two Falcon gravity targets, out of five tested on
the Ekati property (core zone), were confirmed as kimberlite pipes.
Negotiations with potential partners continue. An agreement was reached with
the DHK joint venture over claims south of the Ekati block in Canada. Under
the terms of the joint venture BHP earns 35% by making the Falcon system
available to the joint venture at their cost and will have the option to earn
a further 16% by bulk sampling any new pipes that are identified.
PETROLEUM
Wells drilled during the quarter or in the process of drilling as at September
30, 2000.
WELL LOCATION BHP EQUITY STATUS
Argus-1 AC/P30, 66.66% Plugged and
Browse Basin, Operator abandoned.
Australia
Atlantis-2 Green Canyon 44%, BHP well-Plugged and
Block 743, operator abandoned, oil
Gulf of discovery
Mexico
Atlantis-2 Green Canyon 44%, BHP well-Drilling ahead
S/T Block 743, operator
Gulf of
Mexico
Castor-1 WA-5-L, 16.67%, Plugged and
Dampier Operator- abandoned
Basin, Woodside
Australia
Eva Eva South Secure Block, 41.18% Drilling ahead
Bolivia Operator -
Repsol
Mad Dog-3 Green Canyon, 23.9% Drilling ahead
Block 783, Operator - BP
Gulf of Amoco
Mexico
EXPENDITURE
Information related to exploration expenditure will be included in BHP's first
quarter Profit Report, to be released on 2 November 2000.
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 and is a full-time employee of a member company
of the BHP 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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