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Is Gold Heading to $3,000?

Is Gold Heading to $3,000?

Gold has surged to a…

Robots Help BHP Billiton Save $500M In Oil Development Costs

BHP Billiton’s use of robots drills, 3-D seismic maps and drones has cut years off development at oil sites in Trinidad and Tobago and has helped the miner already save US$500 million in costs, chief technology officer Diane Jurgens said in an interview for Bloomberg on Friday.

Supercomputers able to create 3-D maps, as well as robot drills and drones, have reduced the timeline in which BHP expects to start production at the Trinidad and Tobago sites to three years from the initially estimated seven years, Jurgens said.

The miner is stepping up the use of technology in a bid to save costs on developing potential projects, including the potash deposit Jansen in Canada’s Saskatchewan province, the manager told Bloomberg.

In its operational review for the fiscal year ended June 30, BHP said last week that it expected to “achieve full year unit cost guidance at our major assets, with unit costs forecast to decline further next year.”

Cost reductions are one of the company’s initiatives to increase productivity, which, in turn, is expected to help raise in the next 12 months copper production by 5 percent, iron ore by up to 4 percent, and metallurgical coal by 3 percent, chief executive Andrew Mackenzie said in the company statement.

The other big miners, Rio Tinto and Anglo American, have also ramped up efforts to curb costs to prop up margins amid slower global demand and lower commodity prices.

In 2015, Rio Tinto revised up its savings target by US$250 million to US$1 billion, citing tough operating environment.

This Thursday, upon reporting its first-half results, Anglo American said that it had reduced copper equivalent unit costs by 19 percent in US dollar terms.

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By Tsvetana Paraskova for Oilprice.com

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