22 SPECIAL FEATURESBHP BILLITON'S PYRENEES PROJECT

JULY 2015THE AUST�LIAN OIL & GAS REVIEW

Project success for major player

BEGINNING production ahead of schedule was the irst sign that BHP Billiton’s Pyrenees project would be one of the company’s most successful.

The US$1.7 billion Pyrenees project, which the company described as “world class”, produced its 92 millionth barrel of oil less than ive years after starting up.

Pyrenees produced 5.7 million barrels of oil equivalent in the nine months to March 2015, a rise on the previous year’s 5.4MMbbl.

In May, BHP Billiton spun off its non-core assets into the newly-listed South32.

“A simpler portfolio, focused on our 19 core assets, will retain an optimal level of diversiication while generating even stronger growth and margins,” BHP Billiton chief executive Andrew Mackenzie said.

One of the assets it retained was Pyrenees, which has been a core project for years.

It received approval in 2007 and has been producing oil from the Crosby, Ravensworth and Stickle ields since 2010. The ields have estimated recoverable oil reserves of between 80MMbbl and 120MMbbl.

In the nine months to March, the company stated that there had been “strong uptime performance” at the Pyrenees conventional oil project which was offset by

ield decline at the North West Shelf and industrial action at Bass Strait.

The project is now in full swing, with a 34 per cent rise in production in the second half of last year attributed to new production wells.

Pyrenees production license WA-42-L is held in joint venture between operator BHP Billiton (71.43 per cent) and Quadrant Energy (28.57 per cent), after Apache Corporation completed the sale of its Australian assets in June. The second production license, WA-43-L, is a joint venture between operator BHP Billiton (40 per cent), Quadrant Energy (31.5 per cent) and INPEX (28.5 per cent).

The development is anchored in the Exmouth Sub-Basin off the north-west coast of WA. At the time of the project announcement, the area was described by BHP Billiton as “an emerging oil province in Australian waters”.

Pyrenees comprises 24 wells and a double-hulled loating production storage and ofloading (FPSO) vessel, which can produce 96,000 barrels per day.

The facility produces crude oil from the Ravensworth, Crosby, Stickle, Tanglehead, Wild Bull and Moondyne reservoirs.

The development is near Macedon in WA-42-L – which delivers natural gas to the WA domestic gas market via the Dampier to Bunbury natural gas pipeline – and Stybarrow, which is expected to reach the end of its life in the second half of this year.

In a testament to one of the company’s core assets and its history in the oil and gas industry, last year BHP Billiton signed an agreement with Pemex to exchange deepwater expertise, as a result of the company’s success with FPSOs, including the Pyrenees facility.

“We have proven we can build projects better and faster than most operators, and our offshore facilities have some of the highest operational uptimes and safety records anywhere in the world,” BHP Billiton petroleum and potash president Tim Cutt said.

The Pyrenees development is expected to be in production for 25 years.

Moving forward BHP Billiton is one of Australia’s most successful global companies, paying the Australian Government nearly $23 billion in taxes and royalties last year.

However, the company and the industry as a whole are experiencing a transition period in project development.

Despite recent falls in commodity prices, Mr Mackenzie said he was conident of the company’s future.

“The reductions in prices we face today are something our industry and country has seen many times before and while this operating environment tests us, I am optimistic for the future,” he said.

“With each cycle, demand is greater than the previous one – and continues to rise.”

BHP Billiton recently simpliied its portfolio from 41 to 19 assets through the

demerger of South32. “Over the past three years, we have

completed more than US$6.5 billion of targeted divestments to simplify our portfolio,” BHP Billiton chairman Jac Nasser said.

“After extensive consideration, we believe the demerger is likely to create more value than other alternatives, including asset sales.”

BHP Billiton is continuing to cut expenditure and increase its cost-effectiveness in its petroleum business.

Mr Cutt said that while the company could not control the market, it could control its own operational behaviour.

“BHP Billiton has a strong focus on productivity and our petroleum business is no exception,” he said.

“In our shale operations, for example, we have lowered our drilling expenditure by 50 per cent.”

BHP Billiton reported a 9 per cent rise in group production for the nine months to March this year “with records achieved for 10 operations and ive commodities”.

The company planned to deliver 16 per cent of group production growth by the end of the 2015 inancial year. By the same time, BHP Billiton’s petroleum business was expected to produce 255MMbbl of oil equivalent – a 5 per cent increase on the 2014 inancial year.

Mr Cutt said BHP Billiton had a “positive outlook” for its operations in the US, as well as for exploration in Trinidad and Tobago.

COURTNEY PEARSON

The Pyrenees development, off the coast of WA, is one of BHP Billiton’s “world class” projects.

23JULY 2015THE AUST�LIAN OIL & GAS REVIEW BHP BILLITON'S PYRENEES PROJECT

A proud safety contribution AUSTRALIAN-owned and operated engineering and consulting company Nihar Associates has provided engineering, operations, maintenance, reliability and integrity support to a variety of industries in Australia and around the world since 2003.

Nihar Associates has a wealth of experience in completing projects for loating production storage and ofloading (FPSO) vessels, such as the full safety integrity level (SIL) assessment it performed on BHP’s Pyrenees FPSO between 2007 and 2009.

Nihar Associates worked effectively with BHP, Modec and Toyo Engineering to ensure the design of the Pyrenees FPSO met all SIL-related requirements and that all SIL elements were proof-tested at the appropriate intervals.

The company performed a thorough initial design review and conducted a series of SIL assessment workshops with representatives from the operations, maintenance, process and design teams from Toyo Engineering to assess all sensors, logic solvers and inal elements, and assign SIL levels.

Nihar Associates also conducted a series of SIL veriication workshops to assess whether the inal design and equipment speciications met the SIL requirements and performed an on-site, as-built veriication of the inal design, including modiications made as a result of the workshop assessments in Tokyo.

Additionally, the company worked with Modec to deine the maintenance requirements for proof testing of safety instrumented functions and safety instrumented protective devices.

Nihar Associates provide engineering and consulting expertise to a number of industries.