MINING & ENERGY 'Very studious' BHP Billiton prepares to join international $1.5bn rush into shale gas BY:MATT CHAMBERS From: The Australian March 07, 2013 12:00AM
BHP Billiton is set to join the $1.5 billion rush by international oil companies to gain a foothold in the nation's burgeoning shale gas industry, flagging it would start taking land positions in Australia in the wake of its $US20bn of US shale acquisitions in 2011.
Speaking on the sidelines of a conference in BHP's oil and gas headquarters of Houston, BHP petroleum chief Michael Yeager said that while it would move cautiously as it focused on the US, the big miner was looking to broaden its footprint.
"We're going to be very studious in Australia and we're going to be very studious in Europe," Mr Yeager said.
"You'll see us start to take land positions and you'll see us possibly do some things," he was reported as saying on the Bloomberg news service.
Mr Yeager has spoken recently of the potential of Australian shale, singling out the Canning Basin in Western Australia as having good prospects.
But this is the first time he has said the company would enter the market.
When previously talking about Australian shale, the oil boss has emphasised the problems of lack of Australian infrastructure and distance to market compared with the US, which has extensive gas pipeline systems and an established drilling and servicing sector.
If BHP moves into the Australian shale space, it will join a raft of other big oil companies that have pushed potential flagged Australian shale spending beyond $1.5bn.
Last week, Chevron announced it would spend up to $US349 million ($339.8m) on exploration to gain a stake in Beach Energy's Cooper Basin ground.
This follows moves into the sector by ConocoPhillips, Statoil, Total, BG Group and Hess.
The moves generally have been through "farm-in" agreements, where the investing party agrees to fund up to a certain amount of exploration for a share of the project, continuing to invest only if there is success in the early stage.
This means total investment is likely to fall short of headline numbers.
It has been reported BHP is looking to join Hess, which has shale ground in the Canning Basin and the Northern Territory.
Shell, which has big positions in offshore West Australian gas and Queensland's coal-seam gas, also has said it is studying a potential Australian shale move.
In November, Mr Yeager said BHP was in discussions with landholders in the Canning Basin but stressed any gas would have to be exported, presumably as liquefied natural gas, to make it work.
BHP has agreed to sell out of the controversial Browse LNG hub planned for James Price Point which, if it goes ahead, could be a potential export point for Canning Basin gas.
It would be a long way down the track but, if BHP did make a move into the Canning and found it could produce gas on a large scale, it could provide an avenue for more Australian development in the wake of recent cutbacks.
Last year, BHP shelved about $60bn worth of iron ore, copper and coal projects in Australia, mainly in the form of the $30bn Olympic Dam copper and uranium mine in South Australia and the $20bn Port Hedland outer harbour project.
In contrast, it is spending about $US4bn a year developing its US shale assets. ____________________________________________________________ From Business Spectator website
BHP prepares to enter Aust shale gas market Published 4:38 AM, 7 Mar 2013 Last update 4:38 AM, 7 Mar 2013
BHP Billiton Ltd is interested in developing a presence in Australia's growing shale gas industry, at a time when other global oil companies are eying the nation's shale potential, according to media reports.
The interest comes after BHP made a big splash in the US shale sector with acquisitions in 2011.
“We're going to be very studious in Australia and we're going to be very studious in Europe,” BHP's petroleum chief Michael Yeager told Bloomberg.
“You'll see us start to take land positions and you'll see us possibly do some things.”
Mr Yeager has previously singled out the Canning Basin in Western Australia has having especially good prospects for shale gas development, The Australian reported.
But Mr Yeager's comments this week in Houston represent the first time BHP has said it is preparing to enter Australia's shale gas market.
KEY Price at posting:
1.4¢ Sentiment: Hold Disclosure: Held
(20min delay)
