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BHP to splash record profits on global shale gas

BHP Billiton is considering expanding into shale-gas exploration beyond the US in the wake of its take-over of Petrohawk Energy and the purchase of a package of assets from Chesapeake Energy

In a conference call held after the Australian resources company posted record results on 24 August, chief executive Marius Kloppers said: “Shale gas will play into the world’s total energy mix and ... over time we hope to participate in other areas of the world as well.”

Last month, BHP announced its $12.1 billion take-over of Petrohawk, which gives it around 1 million acres in Texas and Louisiana, and positions in the highly productive Eagle Ford and Haynesville shales, as well as the Permian basin. Petrohawk is expected to produce 950 million cubic feet equivalent a day (cfe/d) of gas this year and has an estimated proved resource of 3.4 trillion cfe.

In February, BHP paid Chesapeake $4.75 billion for assets in the Arkansas sector of the Fayetteville shale.

“Our ambition is unchanged – to have many tools in the toolkit,” Kloppers said. “We put another tool in with Petrohawk in terms of unconventional gas, and we will build on that.”

BHP is also looking at expanding its liquefied natural gas (LNG) portfolio. It is already partnering fellow Australian company Woodside in the planned Browse LNG project in Western Australia. An LNG development is also possible for the Scarborough and Thebe fields, also offshore Australia. The project, which BHP would develop with its partner ExxonMobil could cost as much as $20 billion.

BHP’s full-year results for the 2010-11 financial year saw it book the largest profit in Australian corporate history. Its profit rose by 71% year-on-year, to $21.7 billion.

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