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First Oil Production From Pyrenees Development Offshore Western Australia

First oil production has commenced ahead of schedule from the BHP Billiton operated Pyrenees project, offshore Western Australia. The full project involves 13 subsea wells, an extensive subsea gathering system and a Floating Production Storage and Offloading (FPSO) facility, with production capacity of approximately 96,000 barrels of oil and gas reinjection capacity of 60 million cubic feet of gas per day (100 per cent basis). As planned, the wells will be drilled and brought on in phases, with approximately half the field ramping up from first oil and the other half over the next six months.

J. Michael Yeager, Chief Executive BHP Billiton Petroleum, said the Pyrenees project is a very technically challenging development that has been executed extremely well and will make a significant contribution to Petroleum's worldwide operations and production volumes.

"Given the complexity of the project, the early start-up of Pyrenees is an outstanding achievement and another major accomplishment from our project development and drilling organisations."

In July 2007, BHP Billiton and joint venture partner Apache Corporation sanctioned the WA-42-L portion of the Pyrenees development at a cost of approximately US$1.7 billion (BHP Billiton's share approximately US$1.2 billion). When sanctioned, first production was planned during the first half of calendar year 2010. The project has an estimated production life of 25 years.

"This is the second development operated by BHP Billiton to commence production from the southern Carnarvon Basin offshore Western Australian in a little over two years, following the start up of the Stybarrow field in 2007. Learnings from the Stybarrow development have been incorporated into the Pyrenees development contributing to the excellent performance," added Mr. Yeager.

The Pyrenees project is located approximately 45 kilometres (27 miles) off the coast of Exmouth, Western Australia, and approximately 20 kilometres (12 miles) east from BHP Billiton's operated Stybarrow development.

The Pyrenees project consists of the development of the Crosby, Ravensworth and Stickle oil fields which were discovered in 2003 at water depths ranging from 169 metres (555 feet) to 250 metres (820 feet.) The fields are developed with very long horizontal wells drilled from the sea floor and then tied back to the Pyrenees FPSO via an extensive gathering system. Water injection is incorporated to enhance oil recovery.

The Pyrenees FPSO is a double-hulled vessel with a disconnectable turret mooring system. Gas produced by the development will be reinjected into the reservoir of the nearby Macedon gas field for future recovery.

The project is located in production license area WA-42-L. The joint venture partners are BHP Billiton (71.43% and Operator) and Apache Corporation (28.57%).

Part of the Ravensworth field is located in production license WA-43-L where BHP Billiton, Operator, holds 39.999%. The Joint Venture partners in WA-43-L are Apache Corporation (31.501%) and INPEX (28.5%). This separate segment of the Pyrenees project will have its own wells and gathering system.

A commercial arrangement has been made between the WA-42-L and WA-43-L Joint Ventures, whereby oil from production license WA-43-L will be produced into the WA-42-L owned facility via a tie-in agreement. Production from the WA-43-L areas will commence later in 2010 calendar year.