Oil and gas markets to ‘improve’: BHP
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.