By Rhiannon Hoyle
SYDNEY-- BHP Billiton Ltd. flagged up to $250 million in
write-downs on its petroleum business and a sharp reduction in U.S.
drilling activity, in the latest example of falling oil prices
roiling a major energy producer.
The moves come as BHP reported higher production of key
commodities including iron ore, oil and steelmaking coal in the six
months through December in defiance of broadly lower commodity
prices. The Melbourne, Australia-based company also said it would
likely to take an impairment charge of up to $350 million after
failing to find a buyer for its Australian nickel assets.
BHP joins a raft of global energy companies in cutting back
spending on energy projects to protect profits. Suncor Energy Inc.
said earlier this month it would cut its 2015 capital spending by 1
billion Canadian dollars (US$826 million) in response to the sharp
drop in crude-oil prices, while Houston-based ConocoPhillips said
last month it also planned to lower its spending by 20%.
"In petroleum, we have moved quickly in response to lower prices
and will reduce the number of rigs we operate in our onshore U.S.
business by approximately 40% by the end of this financial year,"
said BHP Chief Executive Andrew Mackenzie. The asset write-downs in
this division relate to the sale of oil assets in North Louisiana
and gas assets in the Permian Basin in Texas.
On Wednesday, BHP reported a 9% on-year rise in group production
for the six months through December. That included a 15% increase
in Australian iron-ore output to 124 million metric tons, and a 21%
rise in metallurgical coal production to 26 million tons.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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