Oil and gas mar­kets to ‘im­prove’: BHP

Pilbara News - - News - Ben Har­vey

BHP Bil­li­ton has cau­tiously sig­nalled an end to roller coaster com­modi­ties prices, say­ing last week it could see “early signs of mar­kets re­bal­anc­ing”.

“Fun­da­men­tals sug­gest both oil and gas mar­kets will im­prove over the next 12-18 months,” chief ex­ec­u­tive An­drew Mackenzie said in his com­pany’s Septem­ber quar­ter up­date.

“Iron ore and met­al­lur­gi­cal coal prices have been stronger than ex­pected, al­though we con­tinue to ex­pect sup­ply to grow more quickly than de­mand in the near term.

“To­gether, the com­bi­na­tion of stead­ier mar­kets, con­tin­ued cap­i­tal dis­ci­pline, im­proved pro­duc­tiv­ity and in­creased vol­umes in cop­per, iron ore and met­al­lur­gi­cal coal should fur­ther sup­port strong free cash flow gen­er­a­tion this fi­nan­cial year.”

BHP reaf­firmed its full-year pro­duc­tion guid­ance across all its seg­ments, with the ex­cep­tion of cop­per.

It said in the three months to Septem­ber 30 there had been steady out­put of iron ore and met­al­lur­gi­cal coal, but lower vol­umes of petroleum, cop­per and ther­mal coal.

BHP pro­duced 58 mil­lion tonnes of iron ore in the pe­riod — the same as a year ear­lier.

The re­place­ment and main­te­nance of BHP’s Pil­bara rail­way would not de­rail the com­pany’s goal of min­ing be­tween 265 mil­lion tonnes and 275 mil­lion tonnes of iron ore this fi­nan­cial year, the miner said.

“The 24-month rail re­newal and main­te­nance pro­gram, which will sup­port the in­te­grated sup­ply chain’s longterm re­li­a­bil­ity, is pro­gress­ing on sched­ule,” the re­port noted.

The re­port showed petroleum pro­duc­tion dropped 15 per cent in the quar­ter to 55 mil­lion bar­rels of oil equiv­a­lent.

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