BHP Billiton will shut down 40 shale oil wells in

BHP Billiton: will close 40% of American shale oil wells

BHP Billiton: will close 40% of American shale oil wells

January 22, 2015

[China paint information] mining giant BHP Billiton recently disclosed that the company will close 40% of American shale oil wells before the end of this fiscal year, allowing enterprises to accelerate butterfly change and rise

Andrew Mackenzie, CEO of BHP Billiton, said that BHP Billiton's Shale investment projects will continue to focus on the Blackhawk region in southern Texas. "As for the oil business, we have responded quickly to the decline in oil prices, and the adjusted drilling project will benefit from the significant improvement in drilling and completion efficiency."

market analysts said that since last year, the decline in crude oil prices has greatly exceeded external expectations, which has led to more and more consideration for the investment and exploitation of many enterprises. Now the normal exploitation cost of shale oil wells in the United States is $65 to $70 per barrel, and now the oil price has fallen below $40. Coupled with the pressure of environmental protection, it is certainly unsustainable for many enterprises

the International Energy Agency (IEA) said in its latest monthly report that the decline in oil prices will eventually begin to curb production and boost demand. "The visible impact of price fluctuations is mostly reflected in the supply side. The expenditure plans of upstream enterprises have been destroyed, and countless carbon fibers have been reduced. Enterprises are slashing budgets, delaying or canceling new projects, and trying to increase the production of existing oil fields as much as possible."

iea lowered the supply growth forecast of non OPEC countries in 2015 by 350000 barrels to 950000 barrels per day; In 2014, the growth rate reached a record 1.9 million barrels

in addition to the pressure of oil prices, with the improvement of oil and gas production technology, many resources have been found in recent years. At present, the amount of oil that has been exploited has been seriously surplus. Both large and small enterprises are facing the problem of how to overcome this difficulty. Although super large mining companies such as BHP Billiton have advantages in cost control, they should also consider "which is more cost-effective to close shale oil wells or exploit shale oil"

as the boom in the commodity market gradually subsides, BHP Billiton is also moving towards a more streamlined and effective enterprise. Among them, iron ore, copper, coal, oil and potash projects similar to super large and long life cycle will be the focus of the company. Some assets with low return are facing divestiture

within the oil business, BHP Billiton has made it clear that it intends to focus on liquid products in the United States, which is more profitable. As early as last October, the company began to "market" potential acquirers of its Arkansas assets with the purpose of "seeking to improve the balance between liquid and gas in the oil portfolio"

the financial report also showed that in the second half of 2014, BHP Billiton's overall output increased by 9% year-on-year, of which the output of 8 high-precision operation units and 5 kinds of bulk commodities set a new record. The output guidance target issued by the company remained unchanged, and the target of 16% output growth within two years was achieved by the end of fiscal year 2015 (June 30, 2015)