BHP Billiton continues to show its commitment to the copper sector as it recently announced that it plans to spend $900 million on exploration in the coming year. While some of the money will be dedicated to the search for untapped copper deposits, some of the money will also be used for oil exploration. The announcement from BHP comes after it announced that it also plans to up its investment in copper projects.
The Australian reported that the $900 million the company has earmarked for exploration represents a 30-percent decline from 2013, but is more than the $816 million expense recorded in the 2015 financial year.
Exploration will total 18 percent of the miner’s overall capex budget, up from 10 percent in the 2016 financial year and 7.4 percent the year prior.
BHP Billiton’s geoscience leader, Laura Tyler, said the focus would be on oil and copper through the next 12 months, with crude targets in Central America and off the coast of Western Australia of particular interest.
“Over the last four years we have developed a new approach to petroleum exploration that is much more focused,” Tyler said.
“We have commenced drilling in Trinidad and Tobago and have secured an additional rig which will soon commence drilling in a prospective block north of our Shenzi operations in the Gulf of Mexico.”
BHP’s copper targets span South America, North America and Australia, with the firm eyeing new partnerships to boost its growth pipeline.
“We execute our copper exploration both directly and through investment in joint venture opportunities and we continue to seek partnerships with junior explorers,” Tyler said.
The commentary follows BHP chief executive officer Andrew Mackenzie’s insistence that BHP was an industry leader in exploration through the down cycle, with the firm expressing confidence in the medium-term outlook for oil and copper prices.
“We have been surprised by the extent of cost cutting across the industry,” Mackenzie said.
“We are increasing our exploration activity to take advantage of falling costs as others pull back.”
Tyler said the bottom-line figures of a decline through the past four years were deceiving as it is now a lot less expensive to test new finds, while the firm has noticeably lifted the share of capital expenditure it directs toward exploration over the past two years.
“We have reduced exploration operating costs by 70 percent since 2013, and this year we have increased the targets tested by 44 percent,” she said.