BHP Billiton wins two exploration licenses in Canada
BHP Billiton's aggregate bid amount of R8.7 billion covers the drilling and seismic work.
JSE-listed natural resources firm BHP Billiton has won two offshore oil exploration licenses in Canada, the company announced on Thursday.
BHP Billiton said it was successful in its bid to acquire 100 percent interest in two exploration licenses for blocks eight and 12 in the offshore Orphan Basin in Eastern Canada.
BHP’s aggregate bid amount of $625 million (R8.7 billion) covers the drilling and seismic work required by the exploration work programs under the license agreements over the six-year term.
BHP’s minimum commitment under the license agreements is for US$157 million (R2.2 billion), the company said.
Steve Pastor, BHP President Operations Petroleum, said the successful bids will enable the company to explore “world class conventional oil assets as an early mover” in Eastern Canada.
“This frontier opportunity has large oil resource potential which we identified through our Global Petroleum Endowment Study in 2016 and is in a low-risk country, with competitive fiscal terms,” said Steve in a statement.
“This opportunity delivers on our exploration focus in conventional petroleum and will leverage our global deep-water development and operational expertise.”
The initial exploration phase will see BHP invest $140 million (R1.9 billion) in capital expenditure up to financial 2021. This is within its current exploration budget. Should BHP wish to progress beyond this initial exploration phase, a decision on further capital expenditure is expected to be made with regards to an appraisal well in financial 2022.