Eagle Ford Production to Keep Growing Through 2014
BHP’s focus on its shale assets is part of its strategy of focusing on high-value opportunities while preserving opportunities for the future, Cutt said.
BHP has shifted from gas to liquids production in its U.S. shale assets, but is still producing a significant amount of gas. BHP’s shale assets are performing well in comparison to its petroleum assets over the past 18 months.
BHP has total resources estimated at 10 billion barrels of oil. The company explores for oil and gas worldwide, but its primary focus remains on its Australia and U.S.-based assets. BHP’s petroleum operations generate 30 percent of its cash flow; half the company’s cash flow comes from its iron ore assets. Twenty percent of BHP’s cash flow comes from its copper operations. The amount of cash flow generated by its coal assets, another pillar of BHP’s business, fluctuates with time.
The company is seeking to reduce worker exposure to silica in hydraulic fracturing and looking at ways to reduce fresh water usage in its U.S. onshore operations. BHP is familiar with dust from its mining operations; Cutt thinks BHP can go completely dust-free in its U.S. shale operations, and could be an industry leader in addressing the silica issue.
“We went to one of our Eagle Ford locations where workers were in the middle of a frac job, and it was dust-free,” said Cutt.
BHP is working to reduce its use of fresh water in hydraulic fracturing operations and to reduce greenhouse gas emissions released through flaring.
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