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BHP Approves Ruby Petroleum Project

The BHP Board has today approved US$283 million (BHP share) in funding to develop the Ruby Project in Trinidad and Tobago.  Total investment for the oil and gas project (including pre-commitment capital) is approximately US$500 million (gross, 100 per cent basis).

The Ruby Project is located in the Block 3(a) development area of Trinidad and Tobago and provides an opportunity for BHP to safely deliver value by producing resources in the Ruby and Delaware reservoirs. The project consists of five production wells tied back utilising the latent capacity of the existing processing facilities, proven technology of the existing operated asset, and newly acquired ocean bottom node seismic imaging.
The project has Estimated Recoverable 2C Resources of 13.2 million barrels of oil (100 per cent basis) and 274 billion cubic feet of natural gas (100 per cent basis). First production is expected in the 2021 calendar year and is estimated to increase production by ~16,000 barrels of oil per day (bop/d) and ~80 million standard cubic feet per day (MMscf/d) gross at its peak.

Geraldine Slattery, BHP President Operations Petroleum, said: “This is an important milestone for BHP in Trinidad and Tobago.  Ruby aligns well with our strategy of maximising value from our existing assets, bringing competitive near term value and volume growth.”

BHP, as the Operator, holds a 68.46 per cent interest, and Heritage Petroleum and the National Gas Company of Trinidad and Tobago (NGC) hold the remaining 20.13 per cent and 11.41 per cent interest, respectively. The Block 3(a) Joint Operating Agreement requires at least two parties and 65 per cent of the working interest to approve the investment.

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Additional Disclosures
The estimates of 2C Contingent Resources are as of 30 June 2019 and are based on, and fairly represent, information and supporting documentation prepared under the supervision of Mr. A. G. Gadgil, who is employed by BHP.  Mr. Gadgil is a member of the Society of Petroleum Engineers and has the required qualifications and experience to act as a Qualified Petroleum Reserves and Resources evaluator under the ASX Listing Rules. This information is issued with the prior written consent of Mr. Gadgil who agrees with the form and context in which the Petroleum Contingent Resources are presented. 

BHP Net estimated 2C Resources are on a revenue interest basis under the Block 3(a) PSC and exclude royalties owned by others. At 30 June 2019, the approximate net revenue interest was 65.9 per cent. Deterministic methodology has been used to estimate the volumes. Aggregates of 2C Resource estimates have been calculated by arithmetic summation. The custody transfer point(s)/point(s) of sale are the reference point for Contingent Resources. With funding now approved, the noted resources will be reclassified to reserves in the near future.