Reserves and Resources
2.15 Reserves and Resources
2.15.1 Petroleum reserves
Reserves and production
Proved oil and gas reserves are the estimated quantities of crude oil, natural gas and natural gas liquids (NGL) that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, i.e. prices and costs as of the date the estimate is made. Proved developed oil and gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.
Estimates of oil and gas reserves are inherently imprecise, require the application of judgement and are subject to future revision. Accordingly, financial and accounting measures (such as the standardised measure of discounted cash flows, depreciation, depletion and amortisation charges, the assessment of impairments and the assessment of valuation allowances against deferred tax assets) that are based on reserve estimates are also subject to change.
Proved reserves are estimated by reference to available seismic, well and reservoir information, including production and pressure trends for producing reservoirs and, in some cases, to similar data from other producing reservoirs in the immediate area. Proved reserves estimates are attributed to future development projects only where there is a significant commitment to project funding and execution, and for which applicable governmental and regulatory approvals have been secured or are reasonably certain to be secured. Furthermore, estimates of proved reserves only include volumes for which access to market is assured with reasonable certainty. All proved reserve estimates are subject to revision, either upward or downward, based on new information, such as from development drilling and production activities or from changes in economic factors, including product prices, contract terms or development plans.
The tables below detail estimated oil, condensate, NGL and gas reserves at 30 June 2008, 30 June 2007 and 30 June 2006, with a reconciliation of the changes in each year. Reserves have been calculated using the economic interest method and represent net interest volumes after deduction of applicable royalty, fuel and flare volumes. Reserves include quantities of oil, condensate, NGL and gas that will be produced under several production and risk sharing arrangements that involve the BHP Billiton Group in upstream risks and rewards without transfer of ownership of the products. At 30 June 2008, approximately 6 per cent (2007: 9 per cent; 2006: 11 per cent) of proved developed and undeveloped oil, condensate and NGL reserves and 5 per cent (2007: 6 per cent; 2006: nil) of natural gas reserves are attributable to those arrangements. Reserves also include volumes calculated by probabilistic aggregation of certain fields that share common infrastructure. These aggregation procedures result in enterprise-wide proved reserves volumes which may not be realised upon divestment on an individual property basis.
| Millions of barrels | Australia/Asia | Americas | UK/Middle East | Total |
|---|---|---|---|---|
| Proved developed and undeveloped oil, condensate and NGL reserves (a) | ||||
| Reserves at 30 June 2005 | 284.7 | 183.0 | 74.9 | 542.6 |
| Improved recovery | - | 11.5 | - | 11.5 |
| Revisions of previous estimates | 52.4 | 0.6 | (2.6) | 50.4 |
| Extensions and discoveries | - | 2.6 | - | 2.6 |
| Purchase/sales of reserves | - | (0.3) | - | (0.3) |
| Production (b) | (33.2) | (7.3) | (15.3) | (55.8) |
| Total changes | 19.2 | 7.1 | (17.9) | 8.4 |
| Reserves at 30 June 2006 | 303.9 | 190.1 | 57.0 | 551.0 |
| Improved recovery | - | - | - | - |
| Revisions of previous estimates | 13.6 | (0.9) | 5.6 | 18.3 |
| Extensions and discoveries | 50.9 | 1.7 | - | 52.6 |
| Purchase/sales of reserves | - | (0.1) | - | (0.1) |
| Production (b) | (35.8) | (6.6) | (14.3) | (56.7) |
| Total changes | 28.7 | (5.9) | (8.7) | 14.1 |
| Reserves at 30 June 2007 (c) | 332.6 | 184.2 | 48.3 | 565.1 |
| Improved recovery | 17.6 | - | - | 17.6 |
| Revisions of previous estimates | 20 | 16.2 | (2.2) | 34 |
| Extensions and discoveries | 26.6 | 23.4 | - | 50 |
| Purchase/sales of reserves | - | - | - | - |
| Production (b) | (40) | (16.3) | (11.8) | (68.1) |
| Total changes | 24.2 | 23.3 | (14) | 33.5 |
| Reserves at 30 June 2008 (c) | 356.8 | 207.5 | 34.3 | 598.6 |
| Proved developed oil, condensate and NGL reserves (a) | ||||
| Reserves at 30 June 2005 | 180.5 | 18.3 | 74.5 | 273.3 |
| Reserves at 30 June 2006 | 199.3 | 21.5 | 54.6 | 275.4 |
| Reserves at 30 June 2007 | 180.8 | 35.3 | 46 | 262.1 |
| Reserves at 30 June 2008 | 190.9 | 99.6 | 30.6 | 321.1 |
- In Bass Strait, the North West Shelf, Ohanet and the North Sea, NGL is extracted separately from crude oil and natural gas.
- Production for reserves reconciliation differs slightly from marketable production due to timing of sales and corrections to previous estimates.
- Total proved oil, condensate and NGL reserves include 8.0 million barrels derived from probabilistic aggregation procedures.
| Billions of cubic feet | Australia/Asia (a) | Americas | UK/Middle East | Total |
|---|---|---|---|---|
| Proved developed and undeveloped natural gas reserves | ||||
| Reserves at 30 June 2005 | 4,820.7 | 116.9 | 244.5 | 5,182.1 |
| Improved recovery | - | - | - | - |
| Revisions of previous estimates | 4.0 | 6.5 | 34.7 | 45.2 |
| Extensions and discoveries | - | 1.3 | - | 1.3 |
| Purchases/sales of reserves | - | (0.2) | - | (0.2) |
| Production (b) | (292) | (8.0) | (61.1) | (361.1) |
| Total changes | (288) | (0.4) | (26.4) | (314.8) |
| Reserves at 30 June 2006 | 4,532.7 | 116.5 | 218.1 | 4,867.3 |
| Improved recovery | - | - | - | - |
| Revisions of previous estimates | 15.3 | (0.4) | 1.4 | 16.3 |
| Extensions and discoveries | - | 280.7 | - | 280.7 |
| Purchases/sales of reserves | (76.5) | (3.6) | - | (80.1) |
| Production (b) | (295.0) | (8.7) | (53.3) | (357.0) |
| Total changes | (356.2) | 268.0 | (51.9) | (140.1) |
| Reserves at 30 June 2007 (c) | 4,176.5 | 384.5 | 166.2 | 4,727.2 |
| Improved recovery | - | - | - | - |
| Revisions of previous estimates | 22.7 | (42.3) | 62.2 | 42.6 |
| Extensions and discoveries | 239.8 | 17.1 | - | 256.9 |
| Purchases/sales of reserves | - | - | - | - |
| Production (b) | (310.9) | (11.8) | (45.8) | (368.5) |
| Total changes | (48.4) | (37.0) | 16.4 | (69.0) |
| Reserves at 30 June 2008 (c) | 4,128.1 | 347.5 | 182.6 | 4,658.2 |
| Proved developed natural gas reserves | ||||
| Reserves at 30 June 2005 | 2,621.4 | 15.1 | 239.3 | 2,875.8 |
| Reserves at 30 June 2006 | 2,286.4 | 16.5 | 206.4 | 2,509.3 |
| Reserves at 30 June 2007 | 2,137.4 | 15.9 | 162.4 | 2,315.7 |
| Reserves at 30 June 2008 | 2,148.6 | 46.4 | 175.1 | 2,370.1 |
- Production for Australia includes gas sold as LNG.
- Production for reserves reconciliation differs slightly from marketable production due to timing of sales and corrections to previous estimates.
- Total proved natural gas reserves include 169.3 billion cubic feet derived from probabilistic aggregation procedures.
2.15.2 Mineral Resources and Ore Reserves
Introduction
The statement of Mineral Resources and Ore Reserves presented in this Report has been produced in accordance with the Australasian Code for Reporting of Mineral Resources and Ore Reserves, December 2004 (the JORC Code). Commodity prices and exchange rates used to estimate the economic viability of reserves are based on September 2007 BHP Billiton long-term forecasts (unless otherwise stated). The Ore Reserves tabulated are all held within existing, fully permitted mining tenements. The BHP Billiton Group’s mineral leases are of sufficient duration (or convey a legal right to renew for sufficient duration) to enable all reserves on the leased properties to be mined in accordance with current production schedules. Our Ore Reserves may include areas where some additional approvals remain outstanding, but where, based on the technical investigations we carry out as part of our planning process, and our knowledge and experience of the approvals process, we expect that such approvals will be obtained as part of the normal course of business and within the time frame required by the current schedule. The information in this Report relating to Mineral Resources and Ore Reserves is based on information compiled by Competent Persons (as defined in the JORC Code). Competent Persons for deposits located outside Australia may be members of Recognised Overseas Professional Organisations (ROPOs) as recognised by the ASX. All Competent Persons have, at the time of reporting, sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity they are undertaking to qualify as a Competent Person as defined by the JORC Code. At the reporting date, each Competent Person listed in this Report is a full-time employee of BHP Billiton or a company in which BHP Billiton has a controlling interest unless otherwise noted. Each Competent Person consents to the inclusion in this Report of the matters based on their information in the form and context in which it appears. All of the Mineral Resource and Ore Reserve figures presented are reported in 100 per cent terms and represent estimates at 30 June 2008 (unless otherwise stated). All tonnes and grade information has been rounded, hence small differences may be present in the totals. All of the Mineral Resource information is inclusive of Mineral Resources (unless otherwise stated) that have been converted to Ore Reserves (i.e. Mineral Resources are not additional to Ore Reserves). Mine life is calculated as Total Reserve divided by the current approved nominal production rate. The information contained herein differs in certain respects from that reported to the US Securities and Exchange Commission (SEC), which is prepared with reference to the SEC’s Industry Guide 7. Mineral Resources and Ore Reserves are presented in the accompanying tables.
Mineral Resources and Ore Reserves (PDF 309KB)