Page 283 - Annual Report 2020

Governance was a decrease of 4 MMboe due to lower product prices. Improved
The Petroleum Reserves Group (PRG) is a dedicated group that reservoir performance in the Pyrenees operated field added 5 MMboe
provides oversight of the reserves’ assessment and reporting partially offsetting the Bass Strait reduction. In the North West Shelf
processes. It is independent of the various operation teams directly fields, reserves increased 4 MMboe for better performance and Strategic Report
responsible for development and production activities. The PRG other revisions, however, this increase was offset by product price
is staffed by individuals averaging more than 30 years’ experience related reductions of 4 MMboe. In the US Gulf of Mexico, strong
in the oil and gas industry. The manager of the PRG, Abhijit Gadgil, reservoir performance and technical studies in the Atlantis, Shenzi
is a full-time employee of BHP and is responsible for overseeing and Mad Dog fields added a total of 25 MMboe to proved reserves.
the preparation of the reserve estimates and compiling the In the Angostura field in Trinidad and Tobago and the ROD
information for inclusion in this Annual Report. He has an advanced integrated development in Algeria, increases of 1 MMboe were
degree in engineering and more than 35 years of diversified offset by product price related reductions of approximately 1 MMboe.
industry experience in reservoir engineering, reserves assessment,
field development and technical management. He is a 35-year During FY2020, net revisions reduced reserves by a total
member of the Society of Petroleum Engineers (SPE). He has also of 10 MMboe overall.
served on the Society of Petroleum Engineers Oil and Gas Reserves Improved recovery revisions Governance at BHP
Committee. Mr Gadgil has the qualifications and experience There were no improved recovery revisions during the year.
required to act as a qualified petroleum reserves evaluator under
the Australian Securities Exchange (ASX) Listing Rules. The estimates Purchases and sales
of petroleum reserves are based on and fairly represent information There were no purchases or sales during the year.
and supporting documentation prepared under the supervision FY2019 proved reserves
of Mr Gadgil. He has reviewed and agrees with the information
included in section 6.4.1 and has given his prior written consent Production for FY2019 totalled 147 MMboe in sales, which was
for its publication. No part of the individual compensation for comprised of 121 MMboe for our conventional fields and 26 MMboe
members of the PRG is dependent on reported reserves. that was produced from our US Onshore fields prior to the closure
of the divestment agreements. In comparison, our conventional
Reserve assessments for all Petroleum operations were fields produced approximately 1 MMboe more than in FY2018.
conducted by technical staff within the operating organisation. This increase was due to a number of factors, including start-up Remuneration Report
These individuals meet the professional qualifications outlined of the Greater Western Flank Phase B project in the North West
by the SPE, are trained in the fundamentals of SEC reserves Shelf in Australia and higher uptime in several fields, which more
reporting and the reserves processes and are endorsed by the than offset natural production declines in more mature fields (refer
PRG. Each reserve assessment is reviewed annually by the PRG to section 6.3.2 for more information). There was also an additional
to ensure technical quality, adherence to internally published 5 MMboe in non-sales production, primarily for fuel consumed
Petroleum guidelines and compliance with SEC reporting in our Petroleum operations. The combined sales and non-sales
requirements. Once endorsed by the PRG, all reserves receive production totalled 152 MMboe for FY2019. For our conventional
final endorsement by senior management and the Risk and fields, additions and revisions to reserves added 57 MMboe, which
Audit Committee prior to public reporting. Our Internal Audit and replaced 45 per cent of the production in FY2019. As of 30 June 2019,
Assurance function provides secondary assurance of the oil and gas our proved reserves totalled 841 MMboe. Directors’ Report
reserve reporting processes through the testing of the effectiveness
of key controls that have been implemented as required by the US Reserves have been calculated using the economic interest method
Sarbanes-Oxley Act of 2002. and represent net interest volumes after deduction of applicable
royalty. Reserves of 64 MMboe are in two production and risk-sharing
For more information on our risk management governance, arrangements where BHP has a revenue interest in production
refer to section 2.10. without transfer of ownership of the products. At 30 June 2019,
approximately 8 per cent of the proved reserves were attributable
FY2020 proved reserves to such arrangements.
Production for FY2020 totalled 109 MMboe in sales with an Extensions and discoveries
additional 5 MMboe in non-sales production, which was used Extensions added a total of approximately 2 MMboe to proved
primarily for fuel consumed in operations. Total production was reserves, of which 1 MMboe was added for the Atlantis field in the Financial Statements
approximately 13 MMboe lower than conventional production in US Gulf of Mexico with the balance being added in the Snapper
FY2019. The decrease was due to a number of factors, including field in the Bass Strait in Australia.
natural declines in mature fields, weather events that necessitated
precautionary shut ins and lower demand as a consequence of the Improved recovery revisions
COVID-19 pandemic, (refer to section 6.3.2 for more information). There were no improved recovery revisions during the year.
Discoveries, extensions and revisions to reserves added a total
of 21 MMboe, which replaced 19 per cent of production. Revisions
As of 30 June 2020, proved reserves totalled 748 MMboe. Revisions for FY2019 added a total of 56 MMboe. The largest 6
Reserves have been calculated using the economic interest method addition was in the Atlantis field where 28 MMboe was added for
performance and approval of Phase 3 infill drilling. Other revisions,
and represent net interest volumes after deduction of applicable primarily in the Mad Dog field, brought the total revisions for our
royalty. Reserves of 69 MMboe are in two production and risk-sharing US Gulf of Mexico assets to 29 MMboe. Additions through revisions
arrangements where BHP has a revenue interest in production in Australia totalled 22 MMboe, with the North West Shelf project
without transfer of ownership of the products. At 30 June 2020, adding 11 MMboe. The Goodwyn field was the largest component Additional information
approximately 9 per cent of the proved reserves were attributable of this change adding 10 MMboe for strong performance. In the
to such arrangements. Bass Strait, 11 MMboe was added with the largest changes occurring
Extensions and discoveries in the Snapper and Turrum fields, which added 5 MMboe and
Board approval of the North West Shelf Greater Western Flank 2 MMboe, respectively. In Other geographic areas, 4 MMboe was
Phase 3 project in Australia added 12 MMboe for development of added for better performance in the Offshore Angostura project
the Goodwyn South and Lambert Deep fields. Board approval of in Trinidad and Tobago, while 1 MMboe was added for improved
the Ruby development project in Trinidad and Tobago during the performance in the ROD integrated development in Algeria.
September 2019 quarter also added 19 MMboe to proved reserves. Purchases and sales Shareholder information
The Ruby project is comprised of the Ruby oil field and the The sale of Petroleum’s interests in the US Onshore Permian, Eagle
Delaware gas field. Ford, Haynesville and Fayetteville fields accounted for reported
Revisions sales of approximately 464 MMboe. There were no purchases
In Australia, reserves decreased by 35 MMboe overall due to during FY2019.
downward revisions. This reduction was primarily in the Bass Strait
due to poor reservoir performance in the Turrum field and lower
overall condensate and natural gas liquids (NGL) recovery from the
Bass Strait gas fields totalling 40 MMboe. Included in this reduction

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