The Wall Street Journal: BHP Postpones Restart of Wells In Gulf of Mexico: "...others, including BP PLC and Royal Dutch Shell Group, have managed to restart production at some oil platforms.": Thursday 8 September 2005
By MATT CHAMBERS
MELBOURNE, Australia -- Anglo-Australian resources company BHP Billiton Ltd. said it has shut down production at its Gulf of Mexico oil wells indefinitely.
Since Hurricane Katrina hit the Gulf Coast early last week, many oil companies like Exxon Mobil Corp. and Chevron Corp. have been unable to restart production at some refineries while others, including BP PLC and Royal Dutch Shell Group, have managed to restart production at some oil platforms.
BHP produces about 25,000 barrels of oil a day in the Gulf of Mexico from the Mad Dog, West Cameron, Genesis, Green Canyon, Typhoon and Boris fields.
While inspections after the hurricane showed BHP's facilities had sustained only minimal damage, its impact on people and refining means production can't restart, the company said. BHP shut its wells before the hurricane hit and last week said it expected production to stop for only a couple of days.
"The disruption is likely to be longer than initially thought due to the massive disruption to people and facilities," a BHP spokeswoman told Dow Jones Newswires. She said she couldn't give any indication of when production would restart.
With oil prices around US$66 a barrel, the disruption represents a revenue loss of US$1.6 million a day for BHP, which gets most of its revenue from mining. Petroleum was the company's third-largest revenue stream last year, after carbon-steel materials, such as iron ore, and base metals, like copper and nickel.
The Gulf of Mexico makes up about 8% of BHP's petroleum production, and petroleum made up 20% of the company's earnings before interest and taxes for the fiscal year that ended in June.
"The beauty of BHP is that it is a very diversified company and a single thing like this won't affect the stock's appeal," said Andrew Sekely, head dealer at Intersuisse in Sydney.
BHP shares yesterday rose 1.5% to end at A$20.55 (US$15.79) each, after Macquarie Equities said the company could unveil a capital-management plan. Macquarie said BHP would have US$11.8 billion in available cash flow during the current fiscal year.
Write to Matt Chambers at email@example.com
Click here to return to ShellNews.net HOME PAGE