|
  |
|
 |
|
|
|||||||||||||||||||||||||||||||||||||||||||||
Steeper oil decline hits BHP
MELBOURNE, Australia (Reuters) -- BHP Billiton, the world's largest diversified miner, said on Wednesday iron ore exports jumped in the second quarter on strong Asian demand, but dwindling flows from an ageing offshore oil field sapped oil output. The oil production slide was steeper than expected, forcing analysts to trim their first-half profit forecasts pegged around Aust. $925 million ($544 million), but they said changes would be small as robust iron ore sales had offset most of the oil fall. The mining giant said its oil and condensate production in the three months ending December 31 fell 16 percent from a year ago to 16.4 million barrels, mainly due to declining output from the Bass Strait field off southeastern Australia. The field has been producing for more than 30 years. (Full story) "Most brokers have underestimated the decline at Bass Strait for the quarter. That'll imply a little bit of trimming there (on profit forecasts)," said Sagitta Wealth Management resources analyst Tim Barker. "Maybe there are enough gains elsewhere to make sure that's not too much," he said. A third of group profitsThe petroleum division made up about a third of group profits in 2001-02. Iron ore is part of BHP Billiton's carbon steel materials division, which also made up one-third of the group's 2001/02 operating profit. Shares in BHP Billiton, due to report its first-half profit on February 24, closed a cent lower at A$9.03 in a weaker broader market, while shares in rival Rio Tinto were up 2.1 percent at A$32.15. Analysts said the Bass Strait production fall came faster than expected, despite the company having flagged last year that it expected an annual decline of 17 percent. Second-quarter iron ore shipments soared 17 percent from a year ago and rose 12 percent from the first quarter compared with flat exports for Rio Tinto, although both companies pointed to strong demand in Asian markets. Export pushThe jump in BHP Billiton's exports stemmed from a push at its Port Hedland export point in Western Australia to ship more than its 67 million tonnes a year nominal capacity, analysts said. Based on first-half exports, the port is now handling about 80 million tonnes a year. "They've demonstrated they've been very successful at de-bottlenecking the port and this is without expending any more capital at the port," said UBS Warburg analyst Glyn Lawcock. BHP Billiton's bigger iron ore rival, Rio, has two export ports in Western Australia, with total capacity of around 125 million tonnes a year. Both ports are running below capacity. However, the strong export demand has resulted in ships having to queue up at both companies' ports to load, requiring the mining giants to pay demurrage costs or delay fees. Rio Tinto is due to release its results on Thursday.
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
|
