Trinidad Offshore Oil Adds To BHP Billiton Growth Target

---

Researched by Industrialinfo.com (Industrial Information Resources, Inc.; Houston, Texas). An oil discovery with an estimated resource in excess of 400 million barrels has been made by BHP Billiton at its Canteen-1 oil exploration well off the east coast of Trinidad. The find is in relatively shallow water, 164 feet, which will allow the company to undertake fast track development. It is 1.6km north of the earlier Kairi-1 oil and gas discovery in the same block. BHP has a 45% stake in the block, TotalFinaElf 30% and Talisman Energy 25%.

This is the fourth discovery in the area by BHP Billiton, making offshore Trinidad a major hydrocarbon producing area for the company.

BHP Billiton has recently had success with deepwater and ultra deepwater developments in the Gulf of Mexico. The Typhoon field, which was discovered in 1998 came on stream in July this year at the budgeted cost of $128 million. It is expected to build output to 40,000 barrels per day of oil and 60 million cubic feet of gas in the next months. El Paso, through its oil and gas pipeline subsidiaries, will deliver the oil and gas to local markets via connections to local infrastructure. These finds add to a series of projects the company is bringing on stream in the oil sector where its aims to grow production by 5.5% a year on a compound basis for the next six years. Last year the company's total production was approximately 130 million barrels and it is looking to hit 180 million barrels in 2006. The oil majors are looking at a growth rate of around 3% to 5% per annum.

An exploration and appraisal budget of $250 million for wells in the Gulf of Mexico, Australia, Trinidad and other regions has been set by BHP, which is currently the world's 15th largest oil producer and the world's largest diversified mining house. 60% of the budget would be spent in the US with Gulf region output rising from 15,000 barrels per day to between 80,000 barrels and 160,000 barrels per day by 2006.

The assessment of BHP is that they would still make money if the oil price fell to about $11 a barrel. They also have a natural hedge in their non-oil commodities, which obviates the need to forward sell oil production. They can hold both short and long' positions in the energy market.