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BHP to fast-track Caribbean oil

By Geoff Hiscock
CNN Asia Business Editor

BHP Billiton's oil and gas interests include a stake in the North West Shelf.
BHP Billiton's oil and gas interests include a stake in the North West Shelf.

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SYDNEY, Austalia (CNN) -- Australian resources group BHP Billiton has again signalled its faith in overseas oil and gas investments, committing $327 million to speed development of the Angostura offshore field near Trinidad.

The Caribbean move follows the company's $1.1 billion commitment last month to develop the giant Atlantis field in the Gulf of Mexico.

BHP Billiton, which owns 45 percent of the Greater Angostura region in partnership with TotalFinaElf (30 percent) and Canada's Talisman Energy (25 percent), said it will be pursuing an "aggressive schedule" to achieve first production by late next year.

BHP Billiton Petroleum CEO Philip Aiken said that once production starts, the field will be one of the company's largest operated assets.

BHP Billiton now gets about 30 percent of its earnings before interest and tax from its petroleum operations, despite petroleum having only about 14 percent of total BHP assets.

Aiken said on Wednesday that sanctioning of the Angostura project meant Trinidad and Tobago would become a "core development area" for the company.

The field, which lies in relatively shallow waters 40 meters deep, is about 40 kilometers off the northeast coast of Trinidad in the Caribbean Sea.

Recoverable reserves are 450 million barrels of oil equivalent, made up of 160 million barrels of oil and 1.75 trillion cubic feet of natural gas.

Atlantis approval

Last month BHP said it approved $1.1 billion as its share of development costs for the deepwater Atlantis oil and gas reserves in the Gulf of Mexico. It said this included $355 million it approved in May last year for detailed engineering and design work, purchasing of long-lead items, and awarding major contracts.

The Atlantis field, about 200 kilometers south of New Orleans, has reserves of at least 635 million barrels of oil equivalent and is believed to be the third largest oil and gas field yet discovered in the Gulf of Mexico, according to BHP Billiton.

It has a 44 percent interest, with the operator, BP, holding the remaining 56 percent.

Aiken said last month the Atlantis development and the approval of the nearby Mad Dog project last year meant that the company's Gulf of Mexico assets were "poised to make a substantial, long-term contribution" to earnings.

Mad Dog, another deepwater field in the Gulf, has reserves of between 200 and 450 million barrels of oil equivalent.

Apart from the Gulf of Mexico -- described as the "hottest play in the global oil and gas industry" by a BHPBilliton in executive last month, the company's key oil and gas interests include 50 percent of the Bass Strait field and one-sixth of the North West Shelf LNG operation in Australia, and 46 percent of the Liverpool Bay development in the Irish Sea.

The company told CNN in January that deepwater exploration, such as the Browse and Beagle Basins in Western Australia, is a focus of its petroleum strategy.

Shares in BHP Billiton are 1.37 percent lower at A$8.65 in Thursday afternoon trade. The broader market, measured by the S&P/ASX200, is down 0.6 percent.

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