Gas Week

EWN Publishing

BHP Billiton $US3.014b: on gas US3.33; oil ,$US63.87 / barrel (up from $US61.90) and LPG (up from $US483.74 a tonne) to $US529.96 a tonne

Posted by gasweek on 21 September, 2007

A breakdown of Broken Hill Proprietary Company (BHP) Billiton results indicated it was highly unlikely the group would spin off its petroleum operations, a prospect frequently mentioned as a means of creating further value in the diversified resources group, in the near term, reported The Australian(23/8/07, p. 20).

Petroleum breaks records: Petroleum made a record EBIT contribution of $US3.014 billion ($3.75 billion) to the year to 30 June, up 1.5 per cent from the 2006 figure of $US2.968 billion. This occurred in spite of 2006-07 production being flat and the absence of major new projects coming on-stream during the year.

Oil prices rise: The increase was mainly the result of higher released oil prices of $US63.87 per 1 barrel (up from $US61.90) and higher LPG prices (up from $US483.74 a tonne) to $US529.96 a tonne. According to BHP, these gains were partially offset by lower average realised prices for natural gas, $US3.19 per thousand cubic feet, down from $US3.33.

Breakdown sums it up: However, the breakdown indicated the value of the petroleum business to BHP’s balance sheet, conveying its high margins and returns on capital in contrast to other parts of BHP’s portfolio.

The Australian, 23/8/2007, p. 20

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