E&D Rpt Q/E 31 Dec 2004

BHP Billiton Limited
27 January 2005

     BHP Billiton Limited is issuing this announcement to fulfil disclosure
  obligations arising from its secondary listing on the London Stock Exchange.

    The text of this release is identical to that issued by BHP Billiton Plc
                                    earlier.

Date                 27 January 2005
Number               03/05

                  BHP BILLITON QUARTERLY REPORT ON EXPLORATION

                           AND DEVELOPMENT ACTIVITIES

                          October 2004 - December 2004


This report covers exploration and development activities for the quarter ended
31 December 2004 and projects commissioned to the date of this report. Unless
otherwise stated, BHP Billiton's interest in the projects referred to in this
report is 100 per cent, and references to quarters are based on calendar years.

Five projects have been commissioned since the September 2004 quarter.

Of the remaining ten projects that were under construction during the quarter,
all are tracking on or ahead of schedule and eight are within original Board
approved expenditure limits. The exceptions are Atlantis and Dendrobium.



PETROLEUM DEVELOPMENT

Mad Dog Development, Gulf of Mexico, USA (BHP Billiton 23.9%, non-operated)

BHP Billiton announced its sanction of the Mad Dog oil and gas field in February
2002. The Mad Dog facility has a revised daily capacity of 100,000 barrels of
crude oil (up from 80,000) and 60 million cubic feet of natural gas (up from 40
million). First production from Mad Dog was achieved on 13 January 2005.
Budgeted capital expenditure is US$368 million (BHP Billiton share). As the
project has now been successfully commissioned, it will no longer be included in
this report.

Greater Angostura Development, Trinidad (BHP Billiton 45%, operated)

In March 2003, BHP Billiton approved the first development phase of the
Angostura oil and gas field off the northeast coast of Trinidad. First gas
production from Angostura was achieved on 16 December 2004 and first oil was
achieved on 9 January 2005. With a nameplate capacity of 100,000 barrels of oil
equivalent per day, the development is expected to produce initially at a daily
gross rate of 60,000 barrels of oil equivalent. Budgeted capital expenditure is
US$327 million (BHP Billiton share). As the project has now been successfully
commissioned, it will no longer be included in this report.

ROD Integrated Development, Algeria (BHP Billiton 36.04%, joint operating entity
comprising BHP Billiton/SONATRACH)

The ROD Integrated Development consists of six satellite oil fields in the
Berkine Basin in eastern Algeria. Production of oil from these fields commenced
to schedule in October 2004 at an initial rate of 20,000 barrels of oil per day,
with initial processing taking place in the adjacent BRN processing facility.
The construction of the ROD stand-alone oil reception, processing, storage and
export facilities were successfully completed on 31 December 2004, and oil is
being processed and exported through the new Central Processing Facility (CPF).
Water will shortly be re-injected into the reservoir to provide pressure
support, and commissioning of the gas injection facilities is nearing
completion. Following a ramp-up in production, the CPF will process
approximately 80,000 barrels of Saharan Blend crude oil per day. Budgeted
capital expenditure is US$192 million (BHP Billiton share). As the project has
now been successfully commissioned, it will no longer be included in this
report.

Minerva, Australia (BHP Billiton 90%, operated)

In May 2002, BHP Billiton approved the Minerva gas field project in the offshore
Otway Basin in Victoria. Construction of the gas plant was completed in December
2004 and the facilities handed over for commissioning. First production from
Minerva was achieved on 18 January 2005, approximately two weeks later than the
revised schedule. In the March 2004 quarter, budgeted capital expenditure was
increased to US$150 million (BHP Billiton share). As the project has now been
successfully commissioned, it will no longer be included in this report.

Caesar/Cleopatra Transportation Systems, Gulf of Mexico, USA (BHP Billiton
interest in Caesar pipeline, 25%; interest in Cleopatra pipeline, 22%.
Non-operated)

BHP Billiton acquired respective 25 and 22 per cent interests in the Caesar oil
and the Cleopatra gas pipelines. These pipelines will transport production from
the Mad Dog and Atlantis fields to pipelines closer to shore. Commissioning of
both Caesar and Cleopatra was to schedule in December 2004, with the
commencement of oil and gas production from a third-party facility. Oil and gas
production from the Mad Dog field has now commenced and is flowing through the
Caesar and Cleopatra pipelines. Budgeted capital expenditure is US$132 million
(BHP Billiton share). As the project has now been successfully commissioned, it
will no longer be included in this report.

Atlantis Development, Gulf of Mexico, USA (BHP Billiton 44%, non-operated)

BHP Billiton approved US$1.1 billion for the development of the Atlantis oil and
gas reserves in February 2003. During the quarter, the Board sanctioned an
additional US$121 million (BHP Billiton share) to enhance capacity and allow for
inflationary related cost pressures. The facility will now have a gross
nameplate daily capacity of 200,000 barrels of oil (up from 150,000) and 180
million cubic feet of natural gas. The initial development drilling campaign has
been completed and the project remains on schedule for first production in the
third quarter of 2006.


MINERALS DEVELOPMENT

Aluminium

Worsley Development Capital Projects (DCP), Australia (BHP Billiton 86%)

The Worsley Alumina Development Capital Projects were approved in May 2004 with
a budget of US$192 million (US$165 million BHP Billiton share). The projects
will increase alumina capacity by 250,000 tonnes per annum (215,000 tonnes per
annum BHP Billiton share) to 3.5 million tonnes per annum (3.01 million tonnes
per annum BHP Billiton share). Overall the projects are greater than 30 per cent
complete. Engineering and procurement activities are well advanced and
construction work is progressing with the major civil works almost complete.
Erection of the desilication, precipitation and deep cone washer tanks has
commenced. Commissioning of the DCP is scheduled for the first quarter of 2006.

Base Metals

Escondida Norte, Chile (BHP Billiton 57.5%)

The development of the Escondida Norte pit, located approximately 5 kilometres
north of the existing Escondida mining operations, was approved in June 2003.
Pre-mine waste stripping continued during the quarter with total material
movement to the end of December 2004 equalling 126 million tonnes. Project
development during the period involved the commencement of the crushing station
and both silo structures, with work on the overland conveyor alignment
continuing. Preparation for the commissioning of the electrical power
distribution system has commenced. Overall project progress is approximately 55
per cent complete with pre-mine development, design and construction activities
on track to meet first ore delivery to the crusher in the fourth quarter of
2005. Development costs are estimated at US$400 million (BHP Billiton share
US$230 million).

Escondida Sulphide Leach, Chile (BHP Billiton 57.5%)

The Escondida Sulphide Leach project was approved in April 2004. The project
will produce 180,000 tonnes (103,500 tonnes BHP Billiton share) of copper
cathode per annum, utilising a bacterially assisted leaching process on
low-grade run-of-mine ore from both the Escondida and Escondida Norte pits. The
resulting solutions will then be treated in conventional solvent extraction and
electrowinning plants. Detailed engineering and procurement activities are
continuing. Construction underway includes erection of the rhyolite crushing
facilities, leach pad base preparation, mine haulage road tunnels, and the
solvent extraction and electrowinning base preparation. Development costs are
estimated at US$870 million (US$500 million BHP Billiton share) and production
is scheduled to begin during the second half of 2006.

Spence, Chile

The Spence Project, approved in October 2004 will be a new open cut mine with
associated plant facilities capable of producing 200,000 tonnes per annum of
copper cathode through a combination of chemical and bacterial leaching.
Engineering and procurement is well advanced and initial construction is
underway. Major equipment orders including mine equipment and high voltage
electrical equipment have been released for fabrication. The road relocation is
over 80 per cent complete and construction of initial camp and office facilities
has commenced. Recruitment of the senior operating team is complete and hiring
of personnel for mine operations continues. Development costs are estimated at
US$990 million and production is scheduled to begin during the last quarter of
2006.

Carbon Steel Materials

Dendrobium Coal Project, Australia

The Dendrobium Mine will be a low cost underground longwall operation capable of
producing 5.2 million tonnes per annum of raw coal (3.6 million tonnes per annum
of clean coal). The mine surface facilities, ventilation shaft, washery upgrade
and Kemira Valley Rail Coal Loading facilities have been successfully
commissioned. Process commissioning of the first module of the thermal drier and
mining development for Longwall 1 are progressing. Revised development costs are
estimated at US$200 million and production is scheduled to commence in mid 2005.

Rapid Growth Project 2, Australia (BHP Billiton 85%)

The Rapid Growth Project 2 (RGP2) was approved in October 2004. The project
comprises increases in mine, rail and port capacity through the development of
Ore Body 18 (OB18), purchases of additional rolling stock and a new car dumper
at Finucane Island. Initial engineering activities are underway, and the
tendering and procurement processes are commencing. The project will increase
installed capacity at Western Australian Iron Ore to 118 million tonnes per
annum by the second half of 2006. Development costs are estimated at US$575
million (BHP Billiton share US$489 million).

Diamonds and Specialty Products

Panda Underground Project, EKATI Diamond Mine, Canada (BHP Billiton 80%)

The Panda Underground Project, approved in May 2004, will be a 2,600 tonnes per
day sub-level retreat mine that will deliver approximately 4.6 million tonnes of
ore and 4.7 million carats of high value Panda diamonds to the EKATI process
plant over a 6 year production life. Underground mine development is progressing
to schedule while construction activities associated with the mine surface
facilities are well advanced. Three of four ventilation shafts have been
completed. Development costs are estimated at US$182 million (BHP Billiton share
US$146 million), with first ore production on schedule for early 2005 and full
production in early 2006.

Stainless Steel Materials

Ravensthorpe Nickel Project, Australia

The Ravensthorpe Nickel Project was approved in March 2004. The project includes
the development of a mine, treatment plant and associated infrastructure near
Ravensthorpe in Western Australia. The Ravensthorpe processing plant will
produce a mixed nickel-cobalt hydroxide intermediate product (MHP). Engineering
and procurement activities are proceeding to schedule. Significant contracts
awarded during the period included the concrete works and site erected tanks.
The construction water and power systems, stage 1 of the construction camp and
the new regional airstrip are now fully operational, and sealing of the major
access roads is well advanced. Development costs are estimated at US$1.05
billion, with the first shipment of MHP expected by the second quarter of 2007.

Yabulu Extension Project, Australia

The Yabulu Extension Project was approved in March 2004. The metal refining
section of the QNI Yabulu refinery near Townsville in Queensland is being
expanded to process up to 220,000 tonnes of MHP. This additional processing
capacity will increase refinery production to 76,000 tonnes of nickel and 3,500
tonnes of cobalt. Engineering and procurement activities are proceeding to
schedule. Significant activities during the period included the awarding of the
calciner contract and the tender of the plant infrastructure works. Development
costs are estimated at US$350 million, with first nickel metal production from
the expanded Yabulu refinery expected by late 2007.


PETROLEUM EXPLORATION

Exploration and appraisal wells drilled during the quarter or in the process of
drilling as at 31 December 2004.


   WELL            LOCATION         BHP BILLITON EQUITY                      STATUS

Scarborough-3 Australia, Exmouth   50% BHP Billiton and    Currently pulling out of hole and extracting
              Plateau              operator (1)            core sample for examination/analysis.

Joseph-1      Gulf of Mexico, High 20% BHP Billiton; Shell Drilling ahead.
              Island Block 10L     operator

Makalu-1      Gulf of Mexico,      30% BHP Billiton;       Drilling ahead.
              Mississippi Canyon   Chevron Texaco operator

Shenzi-3 and  Gulf of Mexico,      44% BHP Billiton and    Hydrocarbons encountered.
Side Tracks   Green Canyon 653     operator                See News Release of 15 November 2004

Shenzi-4      Gulf of Mexico,      44% BHP Billiton and    Drilling Ahead.
              Green Canyon 653     operator

Mad Dog       Gulf of Mexico,      23.9% BHP Billiton; BP  Drilling Ahead.
Southwest     Green Canyon 825     Operator
Ridge


(1) Sole risk - BHP Billiton funding 100% of the evaluation activity.



MINERALS EXPLORATION

The Minerals Exploration group of BHP Billiton continued to pursue global
exploration opportunities for key commodities of interest utilising both the
Junior Alliance Programme and in-house capabilities.

Exploration drilling continued on diamond targets in Canada, Botswana and
Namibia; on porphyry copper targets in Chile and Pakistan; and on nickel targets
in Australia and Canada. Exploration for iron ore, coal and bauxite was
undertaken in a number of regions including Australia, India, Brazil and West
Africa.

EXPLORATION EXPENDITURE

During the quarter, BHP Billiton spent US$36 million on minerals exploration, of
which US$35 million was expensed, and US$76 million on petroleum exploration, of
which US$25 million was expensed.


                                        ****

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http://www.bhpbilliton.com

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