BHP Billiton Petroleum and Growth

Philip AikenPresident and Chief Executive Officer, Petroleum

Analyst Briefing, South AfricaSeptember 2002

Petroleum Financial Year 2002

Revenue: US$2.9 billion

EBIT: US$1.1 billion

Total reserves: 1.4 billion boe

Average daily production: 366,000 boe/d

Total production: 134 MMboe

No. of staff & contractors: 1,600

Main centres: Melbourne, London, Houston, Perth

Petroleum Relative to the Industry Players

Excludes companies with significant state ownershipBHPB shown with FY01 productionOther companies are CY01 data except CY00 where not availableSource: Evaluate Energy

MMboe/annum

Annual Production

0 500 1000 1500 2000

30. Suncor29. Woodside

28. EOG27. Petro-Canada

26. Wintershall25. Husky

24. Enterprise Oil23. Nexen

22. Kerr-McGee21. BG

20. Apache19. BHP Billiton

18. Canadian Nat. Res.17. Devon

16. Burlington15. Talisman Energy

14. Marathon13. Amerada Hess

12. Occidental11. Unocal

10. Anadarko9. Encana

8. Repsol-Ypf7. ENI

6. ConocoPhillips5. TotalFina Elf

4. ChevronTexaco3. BP

2. Shell1. ExxonMobil

MMboe

Proven Reserves

0 5000 10000 15000 20000 25000

30. Ocean29. EOG

28. Husky27. Petro-Canada

26. Nexen25. Woodside

24. Wintershall23. Santos

22. Enterprise21. Marathon

20. Canadian Nat.Res.19. Apache

18. BHP Billiton17. Amerada Hess

16. BG15. Talisman

14. Kerr-McGee13. Devon12. Unocal

11. Burlington10. Occidental

9. Anadarko8. Repsol-Ypf

7. ENI6. ConocoPhillips

5. TotalFina Elf4. ChevronTexaco

3. BP2. Shell

1. ExxonMobil

19th in terms of production

19th in terms of production 18th in terms of

reserves18th in terms of

reserves

0

50

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Oil&GasDiversifiedGasElectricityElec&GasOil Service

BHP Billiton- is a small-medium player in a huge energy industry

Market Capitalization of the Top 50 Energy Companies (PFC Energy 50)April 2002 (US$ Billion)

8th in terms of Market Cap

8th in terms of Market Cap

Source: The Petroleum Finance Company

01.01.01Page 5

The Energy Industry-maturing but global demand looks robust, particularly for gas

0

20

40

60

80

100

120

1990 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

0

10

20

30

40

50

1990 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Market Share %Crude OilCrude Oil

Natural GasNatural Gas

Solid FuelsSolid Fuels

NuclearNuclear

HydroHydro

Crude Oil maintaining market share

Crude Oil maintaining market share

Natural Gas growing market share

Natural Gas growing market share

Source: PEL, June 2001

Demand mmbbls/d

Future Production Requirements

0

20

40

60

80

100

120

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

mm

bopd

Non -OPEC Existing Non -OPEC New OPEC Existing OPEC New

Slow (~1%pa) growth in non-OPEC

production since 1986

Increasing call on OPEC crude

OPEC marketShare 2001

~ 38%

OPEC marketShare 2001

~ 38%

OPEC marketShare 2020

~ 50%

OPEC marketShare 2020

~ 50%

Long-Term Production View -increasing liquids demand to be met largely through OPEC production

4%pa 1970-85

CERA estimate of future non-OPEC growth

Oil Price-Key Determinant of ProfitabilityThere has been a positive and widening spread between oil price and marginal cost since 1995

10

15

20

25

30

35

40

1988 1991 1994 1997 2000Year

US $

/bbl

(Rea

l 200

0)

WTI ($ US real 2000) Marginal cost

Positive spread between price and

marginal cost

Positive spread between price and

marginal costPrices seemingly driven by cost of marginal supply

Prices seemingly driven by cost of marginal supply

“Marginal Cost” is the oil price required for the 3/4th quartile producer to meet his cost of capital (Source: Goldman Sachs)

1998 Oil price anomaly

1998 Oil price anomaly

Peer Group BenchmarkingBHP Billiton's Peer Group Ranking – change in industry position over 4 yearsPerformance based upon 3 year averages to 1996/7 and 2000/2001

Top Quartile Performance

0%

25%

50%

75%

100%

Find

ing

& De

velo

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sts

Rese

rves

Re

plac

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Prof

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argi

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Retu

rn o

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pita

l

1996/97

2000/01

76

408

410

179

Other *

NWS (Australia)

Bass Strait (Australia)

LBD (UK)

US$1073 million

Petroleum EBIT FY 2002 US$million

* Includes exploration expenditure and overhead

Petroleum Production FY 02 – 134 MMboe

• Bass Strait - Australia

• North West Shelf - Australia

• Laminaria/Corallina - Australia

• Griffin - Australia

• Liverpool Bay - United Kingdom

• Bruce/Keith - United Kingdom

• Gulf of Mexico - United States

• Mamore - Bolivia

• Zamzama - Pakistan

Petroleum Complementary Growth Strategies

GlobalPortfolio

High Margin Oil Exploration& Production

Low Risk Resources(Discovered)

Gas

Cash Generation

• High-margin v subsurface /technological risk

• Price upside

• Positioning in resource-rich countries

• Low risk resources vspolitical risk

• Maximize returns

• Limited growth or capability contribution

• High-growth

• Environmental /greenhouse driver

• Gulf of Mexico

• Trinidad

• Australia, Brunei, Africa

• Other opportunities – access, position long term– deepwater and others

High Margin Exploration

Green Canyon Area

Gulf of Mexico Exploration - Program Result FY94 - FY02

24Exploration

• 21% commercial success to date

• 33% if opportunities under evaluation are included

Drilling Leverage

30% of wells promoted

(6 of last 9 exploration wells drilled)

DiscoveriesTyphoonAtlantis

Mad DogPlutoBoris

NeptuneBass LiteCascade

36 Wells

Projects• 1 sanctioned

in FY00• 2 sanctioned

in FY02• 1 sold

12Appraisal

Gulf of Mexico Exploration Current Inventory

Walker Walker RidgeRidge

Mississippi CanyonMississippi Canyon

Green CanyonGreen CanyonGas Field

Oil Field

BHPB Acreage

Apparent High Bid LeasesCGOM Sale 182 - 2002

TYPHOON NEARFIELD

Kestral Deep

Vortex

Tembo

Bass DeepHeadroom

Kansas

Sumatra

Komodo

Shenzi

Puma

Double Mountain

Atwater ValleyAtwater Valley

Mad Dog SPAR Facility• Reserve Range (gross)

– 200 - 450 (operator estimate 350)MMboe

• BHPB share 23.9%• Gross capex US$ 1.4 billion• Investor in transportation• Wells

– 16 well slots,13 producers

• Capacity– ~80 mbbl/d, 40 MMcf/d– ~50 mbbl/d produced water

• Drill Rig– ~5250 ton rig payload

• Accommodation– 130 (drilling & operations)

• Subsea System– 3 - 4 wells

Atlantis Development

87

65

910

1112

1314

15 16

DC 16,683' WD

34

21

DC 24,409' WD

Export Pipelines

Host Facility - Semi FPS • One of Gulf of Mexico’s largest fields

• Water depths in excess of 6,000 feet

• Gross capacity 150,000 bbl/d

• Gross reserves 575 MMboe

• BHPB share 44%

• FEED studies underway

• Gross capex >US$2 billion

Trinidad

PACIFICOCEAN ATLANTIC

OCEAN

BRAZIL

BENI BASIN

Bolivia

• Previous gas discoveries - Aripo and Angostura• Recent drilling success - Canteen, Kairi• Oil development sanction 2003• Exploration acreage extended• Core exploration potential

Trinidad – Basis of Development

Block 3(a)Block 2(c)Block 2(ab)

0 Kms 25

1999 Angostura-1 Gas discovery tested at30 MMcf/d

1999 Angostura-1 Gas discovery tested at30 MMcf/d

2001 Canteen-1 Oil and Gas discovery.

179’ net gas pay, 200’ net oil pay

2001 Canteen-1 Oil and Gas discovery.

179’ net gas pay, 200’ net oil pay

2000 Aripo-1 Gas discovery tested at21.6 MMcf/d

2000 Aripo-1 Gas discovery tested at21.6 MMcf/d

2000 Kairi-1 & 2002 Kairi-2Oil and Gas discovery, 435’ net gas pay, 235’ net oil pay

2000 Kairi-1 & 2002 Kairi-2Oil and Gas discovery, 435’ net gas pay, 235’ net oil pay

• North West Shelf Train 4 (gross capex A$2.4 billion)

• Pakistan

• Bass Strait– Eastern States

Australia/Minerva(gross capex US$137 million)

• Other LNG– China supply deal– Korea potential– Taiwan potential

Gas Commercialisation

Page 5

• Good prospectivity and growing domestic gas demand

• Brownfield development based on existing production asset

• Further gas sales agreements completed

• Full field development of 300 MMcf/d gross with first gas in 2003

• BHPB share 38.5% and Operator

• Gross capex ~ US$100 million

Zamzama - Pakistan

Algeria

– ROD and Ohanet

Other Middle East

– evaluation of opportunities

Low Risk Discovered Resources

Algeria

• BHP Billiton entry 1989

• Successful exploration

• ROD oil development sanctioned June 2000

• Excellent relationship with SONATRACH

• Successful bid for Ohanetwet gas field development

• Algeria’s first Risk Service Contract

• Total investment US$1.5 billion

BHP ExplorationBlocks 401a/402a

BoukhechbaPermit Ohanet Region

(Gas)

Arzew

Algiers

0 200 km0 200 km

LicenceOil FieldGas FieldOil PipelineGas Pipeline

ALGERIA

MOROCCO

TUNISIA

SPAIN Skikda

•Wet gas development•700 MMcf/d processing facility•First gas target: FY 2004•Capital Expenditure: US$1,030M•JV partners:

– BHP Billiton (45%)– JOOG– Petrofac– Woodside*

*subject to government approval

•Central process facility at BRN•Production 80,000 bbl/d•First oil: 2004•Capital Expenditure: US$500M•Partners:

– BHP Billiton 35% (45% in 401/402)

– AGIP/ENI– SONATRACH

ROD oil field Ohanet

Algerian Projects

Page 9

Petroleum Production Forecast

…excluding exploration success

Liquids

Gas

0

50

100

150

200

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

MM

boe

Actual Forecast

2000 2001 2002 2003 2004 2005

Ohanet

Zamzama FFD

Minerva

NWS4 Train

BreamP/L

Rod

Mad Dog

Atlantis

Trinidad

The existing focused asset portfolio

Gulf of Mexico

Bolivia

Trinidad

GabonAngolaS.A.

Algeria

Pakistan

North West Shelf/AOAT

Bass Strait/East Australia

Liverpool Bay,Bruce/Keith

Brazil

Brunei

Summary: Business Focus

• Maximize existing value (now)

• Deliver projects in progress (1-3 years)

• Sanction and develop (3-4years)

• Create new opportunities (4+ years)

Summary

• BHP Billiton is a significant global resources company

• BHP Billiton Petroleum is a well established oil and gas business with:

– strong producing assets; and

– substantial growth opportunities

• BHP Billiton Petroleum is a significant contributor to BHP Billiton