BLT Bhp Billiton

RNS Number:2586K
BHP Billiton PLC
23 April 2003

23 April 2003
Number: 14/03

                  BHP BILLITON QUARTERLY REPORT ON EXPLORATION

                           AND DEVELOPMENT ACTIVITIES

                           January 2003 - March 2003


This report covers exploration and development activities for the quarter ended
31 March 2003. Unless otherwise stated, BHP Billiton's interest in the projects
referred to in this report is 100 per cent, and references to quarters are based
on calendar years.




PETROLEUM DEVELOPMENT


North West Shelf expansion, Australia (BHP Billiton 16.67%, non operated)

Overall progress on the fourth liquefaction processing train is 64 per cent
complete and remains on schedule to start up in mid 2004. All major equipment is
on site and construction is 30 per cent complete. The second trunkline is
progressing in accordance with plan at 42 per cent complete. BHP Billiton's
share of capital expenditure is US$237 million.


Minerva (BHP Billiton 90%, operated)

Work is progressing under a Lump Sum Turn Key contract awarded to a joint
venture comprising McConnell Dowell Constructors (Australia) and Saipem
(Portugal) for engineering and construction of the flowlines and gas plant
facilities. The offshore drilling and completion of the two new subsea wells has
been successfully completed and civil engineering works have commenced on the
gas plant site near Port Campbell. Work is continuing on the onshore flowline
and the horizontally directionally drilled flowline shore crossing. The project
is on budget (BHP Billiton's share of capital expenditure is US$123 million) and
on schedule for first gas production in the first quarter 2004.


Zamzama Field Development, Pakistan (BHP Billiton 38.5%, operated)

Phase 1 of the development of the Zamzama Gas Field is being executed on a fast
track basis and will include drilling at least four wells and constructing two
additional 140 MMcf/d processing trains. The drilling of the first well,
Zamzama-3, commenced in July 2002 and was completed in October. The programme is
proceeding on plan with the Zamzama-4 and Zamzama-5 wells now complete. The rig
is moving to the site of Zamzama North and drilling there is expected to
commence in late April 2003. The basic engineering design and the tendering
process for the equipment packages and materials with long lead delivery times
were complete in June 2002, and all of the equipment and materials are on site.
Facilities construction is ongoing, pre-commissioning activities have commenced
and the project is on track to meet its objectives. BHP Billiton's share of
capital expenditure is US$40 million and first gas is scheduled for third
quarter 2003.


OHANET Development, Algeria (BHP Billiton 45%, joint operating organisation
comprising SONATRACH/BHP Billiton)

The OHANET Development consists of the development of four gas-condensate
reservoirs in the Illizi Basin in southern Algeria. The project will provide a
gas treatment facility with a capacity of 20 million standard cubic metres per
day fed by 47 production wells, of which 32 will be new and 15 will be
re-completions of existing oil producers. 3D seismic data across all reservoirs
has been processed and incorporated into the reservoir models. By the end of
March 2003 a total of 27 new wells had been drilled and completed and 15
existing wells had been re-completed. One horizontal well is currently being
drilled but the last four wells have been deferred to allow three to four years
of production history to be gathered. Overall construction progress is over 95
per cent. First production is scheduled for the second half of 2003, and BHP
Billiton's share of capital expenditure is US$464 million.


ROD Integrated Development, Algeria (BHP Billiton 36.04%, joint operating entity
comprising SONATRACH/BHP Billiton)

The ROD Integrated Development consists of the development of six satellite
oilfields in the Berkine Basin in eastern Algeria. The project will produce
80,000 barrels of Sahara Blend crude oil per day, with associated gas being
reinjected into the reservoir together with water to provide pressure support to
the reservoir. 36 development wells will be required, 10 of which will be
recompletions of already drilled wells. At the end of March 2003, 13 new
development wells had been completed and the 14th was nearing completion.
Procurement of all major equipment is complete. Erection of the first steelwork
has commenced and overall project progress is 48 per cent complete. First
production is scheduled for the end of first quarter 2004 and BHP Billiton's
share of capital expenditure is US$179 million.


Caesar/Cleopatra Transportation Systems, Gulf of Mexico, USA (BHP Billiton
interest in Caesar pipeline, 25%; interest in Cleopatra pipeline, 22%.
Non-operated)

In February 2002, BHP Billiton acquired a 25 per cent interest in the Caesar oil
pipeline and a 22 per cent interest in the Cleopatra gas pipeline which will
transport product from the Mad Dog and Atlantis fields to pipelines closer to
shore. During the quarter installation of the Caesar and Cleopatra pipelines was
completed in the shallower sections of the system (S lays). Trials for
installing the pipeline at deeper depths (J lays) concluded, with installation
beginning on the Cleopatra J lay. The project is on budget (BHP Billiton's share
of the capital cost is estimated at $100 million) and on schedule to commence
operation coinciding with first production at BP's Holstein development, in
advance of first hydrocarbon production from Mad Dog and Atlantis.


Mad Dog Development, Gulf of Mexico, USA (BHP Billiton 23.9%, non-operated)

BHP Billiton announced its sanction of the Mad Dog field in February 2002,
approving up to US$335 million for development of the Gulf of Mexico oil and gas
field. Construction continues on the hull (in Finland) and topsides (in the
USA), with an estimated 39 per cent of the work complete at the end of March
2003. Drilling of development wells commenced during the quarter. First
production remains on schedule and is expected at the end of calendar year 2004.


Atlantis Development, Gulf of Mexico, USA (BHP Billiton 44%, non-operated)


During the quarter, BHP Billiton completed funding for the Atlantis project,
bringing our share of total project commitment to US$1.1 billion. Contracts have
been awarded for the engineering, construction, commissioning and delivery of
the topsides and semi-submersible production facilities. In February 2003
results of Atlantis-6 were announced, the first appraisal well to penetrate the
Atlantis structure on the northern flank of the field. A sidetrack was also
completed during the quarter, confirming the nature of the discovery in the
initial wellbore. The well has been suspended for future completion. First
production is scheduled for the third quarter 2006.


Greater Angostura Development, Trinidad (BHP Billiton 45%, operated)


In March 2003 BHP Billiton announced sanction of the first development phase of
the Greater Angostura oil and gas field off the northeast coast of Trinidad.
Phase one of the development involves engineering, construction and installation
of production and transportation facilities required to recover the oil reserves
of the field. The partners have also approved the project. During the quarter,
Trinidad and Tobago's Ministry of Energy and Energy Industries approved the
development plan submitted by the Block 2(c) partners. Additionally, the
Environmental Management Authority issued Certificates of Environmental
Clearance for the project. Detailed design for the central production platform,
onshore terminal, and the first two unmanned wellhead protector platforms is
underway. BHP Billiton's share of capital expenditure for the first phase is
expected to be around US$327 million. First oil is scheduled for the end of
calendar year 2004.



 MINERALS DEVELOPMENT

Aluminium

Mozal 2 Expansion, Mozambique (BHP Billiton 47.11%)


Construction work on the 253,000 tonne per annum Mozal II aluminium smelter
project continued during the quarter with progressive handover of completed
process systems to the smelter operations team. The first aluminium was cast
from the new facilities on 7 April 2003 more than five months ahead of schedule.
Full production is expected to be reached in the fourth quarter of 2003. Cost
trends to date indicate that the project is likely to be completed well below
the project budget of US$860 million (BHP Billiton share US$405 million).


The remaining construction work on the project is associated with the second
half of the new Potline and this work is expected to be complete in the third
quarter of 2003.



Hillside Expansion


Main construction work on the 130,000 tonne per annum Hillside III aluminium
smelter project commenced on 1 April 2002, and at the end of March 2003 overall
construction work has reached 55 per cent completion. The main civil works are
complete and structural steel erection and cladding are nearing completion.
Manufacture of process equipment is progressing on schedule and the first
equipment has been installed on site. First metal production from the new
potline facilities is expected in the first quarter of 2004, in line with
revised schedule, and full production is expected by the end of the second
quarter 2004. Expenditure to date remains in line with the budgeted US$449
million.


Base Metals



Escondida Phase IV Expansion, Chile (BHP Billiton 57.5%)


The Phase IV expansion project reached mechanical completion in September 2002
below the budgeted cost of US1,045 million (BHP Billiton share US$600 million).
The project increases Escondida's annual concentrate capacity to 1.1 million
tonnes of copper contained in concentrate.


The Phase IV expansion has achieved commercial production, with ramp up to full
capacity proceeding as planned and expected to be reached by the end of April
2003. The project is fully operational and will no longer be included in this
report.

Carbon Steel Materials

Dendrobium Coal Project, Australia


The Dendrobium Mine will be a low cost underground longwall operation capable of
producing 5.2 Mtpa of raw coal resulting in 2.6 Mtpa of coking coal and 1Mtpa of
thermal coal. The main customer for the coking coal is the BHP Steel Port Kembla
steelworks located seven kilometres from the mine site.


Surface construction activities are nearing completion at three of the four main
sites, being the coal loading facilities (Kemira Valley), mine surface
facilities (Dendrobium) and the ventilation shaft. Construction associated with
the washery upgrade is currently ramping up. The project is approximately 25 per
cent complete with both of the underground access tunnels having reached the
coal seam. The first Dendrobium production crews are currently being recruited.


Just over 50 per cent of the project's capital has been committed to date. The
capital forecast and longwall startup schedule remain unchanged at US$170
million and May 2005 respectively.


Mining Area C Project, 'C Deposit', Australia (BHP Billiton 85%)


The project provides for the development of a mine, processing plant, 38
kilometre rail spur and associated infrastructure for an operation to build up
to 15 Mtpa at Mining Area C, which is situated approximately 120 kilometres from
Newman in Western Australia's Pilbara region. The capital cost is estimated to
be US$213 million (BHP Billiton share US$181 million).

Construction work is progressing at both the plant and infrastructure rail and
road sites and is over 50 per cent complete. Extraction of bulk sample material
continued during the quarter with shipments to customers continuing. Overall the
project is within budget and remains on schedule to commission in the fourth
quarter of 2003.

A joint venture agreement has been signed with POSCO of South Korea for the
development of the 'C Deposit' section of Mining Area C, whereby POSCO will take
a 20 per cent interest in the deposit.


Products & Capacity Expansion Project (PACE), Australia (BHP Billiton 85%)

The project provides for the upgrade of the BHP Billiton rail and port
facilities in a staged process to meet forecast increases in sales of iron ore
over the next decade. The approvals cover the first stage of PACE, which will
increase capacity to 81Mtpa by 2004. Further stages will provide for capacity
levels to exceed 90 Mtpa. The estimated capital cost for Stage 1 is US$351
million (BHP Billiton share US$299 million).


Detailed engineering is nearing completion and construction work continues on
schedule. The project is within budget and remains on track to commission in the
second quarter of 2004.

Energy Coal

Mount Arthur North, Australia

The Mount Arthur North Mine will be capable of producing up to 15 million tonnes
of raw thermal coal per annum when full production is achieved in 2006. Product
will be supplied to both the export and domestic thermal coal markets. The
project is proceeding to schedule with coal deliveries to Macquarie Generation
commencing on 2 January 2003 as per contractual arrangements. Ramp up has
progressed in accordance with expectations. Construction activities on the
Export coal facilities and coal preparation plant remain on schedule. Some
components are currently undergoing pre-commissioning and commissioning.


The project is progressing to plan and forecast cost to completion is within the
approved budget of US$411 million.





PETROLEUM EXPLORATION


Exploration and appraisal wells drilled during the quarter or in the process of
drilling as at 31 March 2003.

WELL                        LOCATION                    BHP BILLITON EQUITY            STATUS
Scallop-1                   Australia,                  25% BHP Billiton; ESSO well    Plugged and abandoned.
                                                        operator                       Encountered non commercial
                            Vic/RL2                                                    quantities of gas.
Maginnis-1                  Western Australia, Browse   33.3% BHP Billiton             Continuing.
                            Basin, WA302-P
                                                        operator
Stybarrow-1                 Western Australia, WA-255-P 50% BHP Billiton operator      Oil discovery. Plugged and
                                                                                       abandoned. For more information
                                                                                       see News Release of 25 February
                                                                                       2003.
Eskdale-1                   Western Australia, WA-255-P 50% BHP Billiton operator      Plugged and abandoned. Non
                                                                                       commercial hydrocarbon shows were
                                                                                       observed over the primary
                                                                                       objective interval. Preparing to
                                                                                       run wire-line logs.
Chinook-3                   Gulf of Mexico,             40% BHP Billiton operator      At 21,840 feet. Drilling cement
                                                                                       at 13 5/8 inch casing shoe.
                            Walker Ridge 469
Atlantis-6                  Gulf of Mexico,             44% BHP Billiton;              For information on Atlantis-6
                                                                                       results see News Release of 10
                            Green Canyon 743            BP operator                    February 2003.
Champlain-4                 Gulf of Mexico, Atwater     12.5% BHP Billiton; Marathon   At 7,050 feet, running riser.
                            Valley 63                   operator
Komodo-1                    Gulf of Mexico, Green       22% BHP Billiton;              Plugged and abandoned. Reached
                            Canyon 569                                                 total depth of 23,607 feet.
                                                        Marathon operator              Released rig on 24 March 2003.





MINERALS EXPLORATION


The exploration group of BHP Billiton Minerals continued to pursue global
exploration opportunities for key commodities of interest to the group utilising
both the Junior Alliance Program and in house generative capabilities. This has
lead to continued growth and diversification in the exploration portfolio and
increased quality exploration opportunities.


As part of the Junior Alliance Program, BHP Billiton entered into an agreement
with Kalahari Diamonds Ltd to explore for diamondiferous Kimberlite pipes in
Botswana using FALCONTM airborne gravity technology. BHP Billiton has subscribed
for a 20 per cent shareholding in Kalahari Diamonds and has back-in rights to a
majority interest position in significant discoveries made as a result of this
initiative.


The three BHP Billiton FALCONTM airborne gravity platforms were active in flying
projects for both BHP Billiton and its partner companies in Australia, South
America and Africa.


Exploration by Rio Tinto near BHP Billiton's historic Magma mine in Arizona, USA
has confirmed the existence of deep high grade porphyry copper mineralisation,
which was previously announced by BHP Billiton in 1998. Rio Tinto has a right to
earn a 55 per cent interest in the project, which has been renamed the
Resolution Project.

Expenditure


Information related to exploration expenditure will be included in the BHP
Billiton third quarter results, to be released on 7 May 2003.




Further information on BHP Billiton can be found on our Internet site: http://
www.bhpbilliton.com

Australia                                                     United Kingdom
Andrew Nairn, Investor Relations                              Mark Lidiard, Investor & Media Relations
Tel: +61 3 9609 3952 Mobile: +61 408 313 259                  Tel: +44 20 7802 4156
email: Andrew.W.Nairn@bhpbilliton.com                         email: Mark.Lidiard@bhpbilliton.com
Tracey Whitehead, Media Relations                             Ariane Gentil, Media Relations
Tel: +61 3 9609 4202 Mobile: +61 419 404 978                  Tel: +44 20 7802 4177
email: Tracey.Whitehead@bhpbilliton.com                       email: Ariane.Gentil@bhpbilliton.com
United States                                                 South Africa
Francis McAllister, Investor Relations                        Michael Campbell, Investor & Media Relations
Tel: +1 713 961 8625 Mobile: +1 713 480 3699                  Tel: +27 11 376 3360 Mobile: +27 82 458 2587
email: Francis.R.McAllister@bhpbilliton.com                   email: Michael.J.Campbell@bhpbilliton.com


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