BHP to Proceed with Ohanet

Broken Hill Proprietary Co Ld
3 July 2000


BHP TO PROCEED WITH OHANET DEVELOPMENT

The Broken Hill Proprietary Company Ltd (BHP) today announced it has signed a 
Risk Service Contract (RSC) with the Algerian national oil company, SONTRACH, 
for the development of four gas/condensate reservoirs in the Ohanet region of 
Algeria.  

The Ohanet development represents a large, relatively stable earnings and cash
flow generator within the BHP portfolio and marks a major step for the Company
in establishing a core business in Algeria. It also provides an important 
balance to other projects ensuring downside protection to low oil price 
environments.

The participants in the venture - which is now subject to formal gazettal by 
the Algerian Government - are BHP 60 per cent, Japan Ohanet Oil & Gas Co. Ltd.

30 per cent (50 per cent JNOC, 35 per cent ITOCHU, 15 per cent Teikoku) and 
Petrofac Resources (Ohanet) LLC 10 per cent.  

The total cost of developing the Ohanet reservoirs will be around US$1.0 
billion (BHP share US$618 million). In return the participants will be 
entitled to recover their investment - together with an agreed fixed profit 
consideration - over a target eight-year period from the start of production.

All participants' monetary entitlement will be translated into volumes of 
condensate, butane and propane (at prevailing market prices) which will be 
lifted from export ports on the Algerian coast. 

Speaking at the contract signing in Algeria, President BHP Petroleum Philip 
Aiken said the go-ahead for Ohanet marked a critical point in BHP's efforts 
to create a core business in Algeria through hydrocarbon exploration and 
development activities.

'Ohanet augments our involvement in the ROD integrated oil field development, 
which we announced at the end of last month, and is consistent with BHP's 
strategy of accessing large but undeveloped resources,' he said.

'Our commitment to Algeria - which began more than a decade ago - is finally 
reaping its reward; we have secured two projects which both provide attractive
rates of return, deliver strong earnings profiles and generate significant 
cash flows.  

'I look forward to continuing our relationship with SONATRACH and the Algerian
government in the years to come as we move ahead with other value creating 
opportunities in the country.'

The Ohanet fields are estimated to contain total proven and probable reserves 
exceeding 3.4 trillion cubic feet of pipeline quality gas, 107 million barrels
of condensate and 116 million barrels of LPG. 

The structure of the RSC means that BHP's reserves entitlement fluctuates with
movements in hydrocarbon prices and the Company expects to book proved
reserves in the range of 55 million to 75 million barrels of oil equivalent.
(Grossed up for Algerian tax which is paid by SONATRACH on behalf of the
foreign participants.)

Ohanet is located in the Illizi province of Algeria, approximately 1300km outh
east of Algiers and 100km west of the country's border with Libya.  The fields
were originally discovered in the late 1950s and early 1960s and have since 
been appraised and delineated by more than 65 wells.  

Ohanet will be the seventh wet gas field development in the area south east of
the Hassi R'Mel complex.

First production is scheduled for October 2003 and peak liquids production
will be around 58 000 barrels per day, which will be shared by the foreign
partners according to their equity interests. 

Further Information and other BHP News Releases can be found on our internet 
site at: 
http://www.bhp.com.au/press/news.htm

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