First Oil from Buffalo

Broken Hill Proprietary Co Ld
29 December 1999


Ref: 67/99

BHP ANNOUNCES FIRST OIL FROM BUFFALO OIL FIELD

The Broken Hill Proprietary Company Limited (BHP) on behalf of its joint
venture partner, Canadian Occidental Petroleum Ltd, today announced the start
of oil production from the Buffalo Oil Field.

The field is located in licence WA-260-P approximately 560 kilometres north
west of Darwin in Australian Commonwealth waters.  The field has been
developed using an unmanned minimum wellhead platform linked to a leased
Floating Production Storage and Offloading System (FPSO), the Buffalo Venture.


The development is operated by BHP and gross production is expected to peak at
40 000 barrels per day over a three year field life. The BHP share of proven
and probable reserves is around 10 million barrels.

The participants are BHP 50 per cent (operator) and Canadian Occidental
Petroleum 50 per cent.

BHP Petroleum President, Philip Aiken said: 'This project has been executed in
three years from its discovery in 1996 and has been delivered on schedule and
below budget - it is a tribute to those involved.

'Buffalo will make a significant short term contribution to our profit and
cash flow and is one of a number of new or incremental oil production projects
that we are undertaking offshore Western Australia.  The Laminaria/Corralina
oil field commenced production in November and an infield and nearfield
drilling programme is planned for the Griffin field which will enhance
production levels and offer potential for satellite development.'


For more information contact:

Dr Malcolm Garratt, Manager External Affairs Media Relations                  
BHP Petroleum - Melbourne
Tel:    [phone]
Mobile: [phone]


 
                             THE BUFFALO PROJECT
                                                     PREPARED: DECEMBER 1999


General
-------
- The Buffalo oil field is located in permit WA-260-P, in the Timor Sea. It
lies approximately 560 kilometres north west of Darwin, and is located in
Australian waters in the same general area as the Laminaria/Corallina fields.

- BHP Petroleum is the field operator, with 50 per cent ownership. Canadian
Petroleum (CanPet), a subsidiary of Canadian Occidental Petroleum Ltd. of
Calgary, Canada, is a 50 per cent farm-in partner. Under the 1997 agreement
CanPet acquired a 50 per cent interest in WA-260-P (excluding the Laminaria
East field) in return for expenditure commitment to future exploration
obligations and for a proportion of the development expenditure for the
Buffalo field.

- Peak production rates of 40,000 barrels per day are expected

- The FPSO is located in a water depth of 300 metres, the deepest FPSO project
yet operated by BHP

- The project has been delivered three years from its discovery in 1996 and
fifteen months after Board approval.

Reserves
--------
- Buffalo has proven and probable (P50) reserves of around 20 million barrels
of oil. The BHP share is approximately 10 million barrels.

- Field life is expected to be approximately three years.

- Buffalo crude is a light oil (53.3 degrees API) with a very low gas-oil
ratio (120 scf/bbl).


Development
-----------
- The Buffalo oil field is being developed using two wells connected to an
unmanned minimum Wellhead Platform with a Floating Production, Storage and
Offloading facility (FPSO), the Buffalo Venture. The 103,000 DWT vessel is
BHP-operated and leased from MODEC, Inc (of the Mitsui group).
 
- The Buffalo Venture is permanently moored. It has a storage capacity of
around 740,000 barrels.

- The BHP Board approved the development of the Buffalo oil field in September
1998, government approvals were obtained in 1999


Operations
----------
- A five slot unmanned wellhead platform produces unstabilised crude from two
wells to the Buffalo Venture.

- The wellhead platform is located on top of a shallow bank ('Big Bank') in
about 30 metres of water. It is remotely controlled from the FPSO, located
about two kilometres away in around 300 metres of water.

- Peak production is expected to be approximately 40,000 barrels per day. The
FPSO is designed to be debottlenecked to 60,000 barrels per day with minimal
expense.

- The Buffalo Venture is designed to separate oil, gas and water, fully
stabilise the oil, provide gas lift, fully treat and discharge produced water,
flare the small quantities of excess gas not consumed by the system, store the
produced oil and off-load the product to shuttle tankers.


Field History
-------------
- BHP was awarded WA-260-P in December 1995 for an initial six year period.
 
- The field was discovered by the Buffalo-1 exploration well in October 1996,
seven kilometres south-east of Laminaria East, when the well tested at 12,000
stb/d.

- The Buffalo-2 well was drilled in May 1997 to appraise the easterly extent
of the Buffalo field, and confirmed the presence of hydrocarbons.

- In December 1997 BHP Petroleum entered into a farm-in agreement with
Canadian Petroleum  (CanPet) covering the WA-260-P exploration permit and
Buffalo. As part of the farm-in, CanPet gained 50 per cent equity in the
project and pays the greater proportion of the exploration and development
costs.


Safety and Environment
----------------------
- BHP's safety and environmental policies and standards have been implemented
in the development and a Safety Case has been completed.

- During the development of the project, extensive baseline environmental data
was collected by BHP in the region, and the existing environmental conditions
in the area are well understood.

- At the end of the project the wellhead platform, the FPSO and its moorings
will be removed.


Supply and Logistics
--------------------
- The supply base for the project is based in Darwin, NT. 

- Operations management is based in Perth, WA.


Other oil developments in Australia
-----------------------------------
The Buffalo field represents one of a number of new or incremental oil
projects in Western Australia. 

- Production commenced from the Woodside-operated Laminaria/Corallina fields
in November 1999. BHP has a 32.6% interest in the Laminaria field and a 25% 
interest in the Corallina field. The BHP share of proven reserves is 43
million barrels.

- BHP Petroleum has a program of infield and nearfield drilling for the
Griffin fields (BHP share 45% and operator) which is designed to support the
existing oil production profile. Two infield wells and three nearfield wells
are scheduled to be drilled by the end of April 2000. The nearfield drilling
program offers the potential for tie-back to the Griffin Venture. Recent
production levels have been in excess of 40.000 barrels per day gross.


Prepared by:   BHP Petroleum External Affairs
Contact:       Dr. Malcolm Garratt
               Manager External Affairs
               Phone:       [phone] 
               Fax:         [phone]