Filed by: BHP Billiton Plc
and BHP Billiton Limited
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Rio Tinto plc
Commission File No.: 001-10533
The following are slides comprising an investor presentation that was given by Marius Kloppers, Chief Executive Officer, BHP Billiton and J. Michael Yeager, Chief Executive Petroleum, BHP Billiton on May 7, 2008.
Petroleum CSG Briefing
Marius Kloppers, Chief Executive Officer
J Michael Yeager, Chief Executive Petroleum
7 May 2008
bhpbilliton
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Disclaimer
This document has been prepared by BHP Billiton Limited and BHP Billiton Plc (“BHP Billiton”) and comprises the written materials/slides for a presentation concerning BHP Billiton’s offers for Rio Tinto Limited and Rio Tinto plc (“Rio Tinto”). By reviewing/attending this presentation you agree to be bound by the following conditions.
The directors of BHP Billiton accept responsibility for the information contained in this presentation. Having taken all reasonable care to ensure that such is the case, the information contained in this presentation is, to the best of the knowledge and belief of the directors of BHP Billiton, in accordance with the facts and contains no omission likely to affect its import.
Subject to the above, neither BHP Billiton nor any of its directors, officers, employees or advisers nor any other person makes any representation or warranty, express or implied, as to, and accordingly no reliance should be placed on, the fairness, accuracy or completeness of the information contained in the presentation or of the views given or implied. To the extent permitted by law, neither BHP Billiton nor any of its directors, officers, employees or advisers nor any other person shall have any liability whatsoever for any errors or omissions or any loss howsoever arising, directly or indirectly, from any use of this information or its contents or otherwise arising in connection therewith.
This presentation is for information purposes only and does not constitute or form part of any offer or invitation to acquire, sell or otherwise dispose of, or issue, or any solicitation of any offer to sell or otherwise dispose of, purchase or subscribe for, any securities, nor does it constitute investment advice, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision, nor does it constitute a proposal to make a takeover bid or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction (or under an exemption from such requirements). No offering of securities shall be made into the United States except pursuant to registration under the US Securities Act of 1933, as amended, or an exemption therefrom.
Neither this presentation nor any copy of it may be taken or transmitted or distributed or redistributed (directly or indirectly) in Japan. The distribution of this document in other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.
Information about Rio Tinto is based on public information which has not been independently verified.
This presentation is directed only at persons who (i) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”) or (ii) have professional experience in matters relating to investments falling within Article 19(5) of the Order or (iii) are outside the United Kingdom (all such persons being referred to as “relevant persons”). This presentation must not be acted on or relied on by persons who are not relevant persons.
Certain statements in this presentation are forward-looking statements. The forward-looking statements include statements regarding contribution synergies, future cost savings, the cost and timing of development projects, future production volumes, increases in production and infrastructure capacity, the identification of additional mineral Reserves and Resources and project lives and, without limitation, other statements typically containing words such as “intends”, “expects”, “anticipates”, “targets”, “plans”, “estimates” and words of similar import. These forward-looking statements speak only as at the date of this presentation. These statements are based on current expectations and beliefs and, by their nature, are subject to a number of known and unknown risks and uncertainties that could cause actual results, performance and achievements to differ materially from any expected future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements are based on numerous assumptions regarding BHP Billiton’s present and future business strategies and the environments in which BHP Billiton and Rio Tinto will operate in the future and such assumptions may or may not prove to be correct.
There are a number of factors that could cause actual results or performance to differ materially from those expressed or implied in the forward-looking statements. Factors that could cause actual results or performance to differ materially from those described in the forward-looking statements include, but are not limited to, BHP Billiton’s ability to successfully combine the businesses of BHP Billiton and Rio Tinto and to realise expected synergies from that combination, the presence of a competitive proposal in relation to Rio Tinto, satisfaction of any conditions to any proposed transaction, including the receipt of required regulatory and anti-trust approvals, Rio Tinto’s willingness to enter into any proposed transaction, the successful completion of any transaction, as well as additional factors such as changes in global, political, economic, business, competitive, market or regulatory forces, future exchange and interest rates, changes in tax rates, future business combinations or dispositions and the outcome of litigation and government actions. Additional risks and factors that could cause BHP Billiton results to differ materially from those described in the forward-looking statements can be found in BHP Billiton’s filings with the US Securities and Exchange Commission (the “SEC”), including BHP Billiton’s Annual Report on Form 20-F for the fiscal year-ended June 30, 2007, and Rio Tinto’s filings with the SEC, including Rio Tinto’s Annual Report on Form 20-F for the fiscal year-ended December 31, 2007, which are available at the SEC’s website (http://www.sec.gov). Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. The information and opinions expressed in this presentation are subject to change without notice and BHP Billiton expressly disclaims any obligation (except as required by law or the rules of the UK Listing Authority and the London Stock Exchange, the UK Takeover Panel, or the listing rules of ASX Limited) or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in BHP Billiton’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
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Disclaimer (continued)
Cautionary Note to US Investors – The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. BHP Billiton uses certain terms in this presentation, such as “probable reserves” and “contingent resources”, that the SEC’s guidelines strictly prohibit oil and gas companies from including in filings with the SEC. US Investors are urged to consider closely the disclosure in the BHP Billiton Annual Report, File No. 001-09526 (for BHP Billiton Limited) and File No. 001-31714 (for BHP Billiton Plc), available from BHP Billiton at BHP Billiton Limited, 180 Lonsdale Street, Melbourne, Victoria, 3000 Australia or at BHP Billiton Plc, Neathouse Place, Victoria, London, United Kingdom. You can also obtain the BHP Billiton Annual Report from the SEC by calling 1-800-SEC-0330 or by visiting the SEC’s website (http://www.sec.gov).
Information Relating to the US Offer for Rio Tinto plc
BHP Billiton plans to register the offer and sale of securities it would issue to Rio Tinto plc US shareholders and Rio Tinto plc ADR holders by filing with the Securities and Exchange Commission (the “SEC”) a Registration Statement (the “Registration Statement”), which will contain a prospectus (the “Prospectus”), as well as other relevant materials. No such materials have yet been filed. This communication is not a substitute for any Registration Statement or Prospectus that BHP Billiton may file with the SEC.
U.S. INVESTORS AND U.S. HOLDERS OF RIO TINTO PLC SECURITIES AND ALL HOLDERS OF RIO TINTO PLC ADRs ARE URGED TO READ ANY REGISTRATION STATEMENT, PROSPECTUS AND ANY OTHER DOCUMENTS MADE AVAILABLE TO THEM AND/OR FILED WITH THE SEC REGARDING THE POTENTIAL TRANSACTION, AS WELL AS ANY AMENDMENTS AND SUPPLEMENTS TO THOSE DOCUMENTS, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and security holders will be able to obtain a free copy of the Registration Statement and the Prospectus as well as other relevant documents filed with the SEC at the SEC’s website (http://www.sec.gov), once such documents are filed with the SEC. Copies of such documents may also be obtained from BHP Billiton without charge, once they are filed with the SEC.
Information for US Holders of Rio Tinto Limited Shares
BHP Billiton Limited is not required to, and does not plan to, prepare and file with the SEC a registration statement in respect of the Rio Tinto Limited Offer. Accordingly, Rio Tinto Limited shareholders should carefully consider the following:
The Rio Tinto Limited Offer will be an exchange offer made for the securities of a foreign company. Such offer is subject to disclosure requirements of a foreign country that are different from those of the United States. Financial statements included in the document will be prepared in accordance with foreign accounting standards that may not be comparable to the financial statements of United States companies.
Information Relating to the US Offer for Rio Tinto plc and the Rio Tinto Limited Offer for Rio Tinto shareholders located in the US
It may be difficult for you to enforce your rights and any claim you may have arising under the US federal securities laws, since the issuers are located in a foreign country, and some or all of their officers and directors may be residents of foreign countries. You may not be able to sue a foreign company or its officers or directors in a foreign court for violations of the US securities laws. It may be difficult to compel a foreign company and its affiliates to subject themselves to a US court’s judgment.
You should be aware that BHP Billiton may purchase securities of Rio Tinto plc and Rio Tinto Limited otherwise than under the exchange offer, such as in open market or privately negotiated purchases.
References in this presentation to “$” are to United States dollars unless otherwise specified.
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Today’s agenda
Strong Fit in BHP Billiton’s Asset Portfolio
How we run BHP Billiton Petroleum
Driving Base Performance
Executing Growth Projects
Capturing Additional Opportunities
Delivering Results
Concluding Remarks
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Today’s agenda
Strong Fit in BHP Billiton’s Asset Portfolio
How we run BHP Billiton Petroleum
Driving Base Performance
Executing Growth Projects
Capturing Additional Opportunities
Delivering Results
Concluding Remarks
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Strong fit in BHP Billiton’s asset portfolio
BHP Billiton knows this business as well as any of its minerals businesses
Oil is a natural resource commodity with real attractions
Petroleum in BHP Billiton – a symbiotic relationship
Petroleum is a high quality upstream business, ideally positioned to deliver unique value
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Petroleum has been a key business for a long time
Petroleum EBIT contribution to BHP Billiton
(US$ ‘000)
3,500 3,000 2,500 2,000 1,500 1,000 500 0
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: BHP Billiton 2008.
Notes: Results are presented in accordance with AGAAP prior to June 2000, UK GAAP from June 2000 until June 2004, and then IFRS from June 2005 onwards.
BHPB Billiton changed year ends from May to June in 2000, therefore the results for June 2000 represent a 13 month period.
All numbers are presented in US millions. Where translations have been made, the year end Exchange Rate (AUD/USD) referenced from Reserve Bank of Australia has been used.
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In many aspects, upstream Petroleum is little different to mining
Strategic focus
Upstream, long-life, low-cost, expandable, export-oriented assets diversified by commodity, geography and market
High quality assets where investment returns are commensurate with risk
Core activities
Safety, environment and health: top priority with similar challenges
Capital intensive long-term investments, with a comparable value chain
Common multidisciplinary project management and operations skills set
Stakeholder management vital
Large complex capital scale projects, global financing and new technologies
but we understand and nurture the differences
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Board and executive skills complementary and strong
BHP Billiton Board
Paul Anderson
Over 20 years experience in US based natural gas and gas infrastructure companies
John Buchanan
A long career with BP, culminating with 6 years as an Executive Director and Group CFO
David Jenkins
A long career with BP including a period as Chief Geologist, Director Technology and Chief Technology Advisor
John Schubert
Over 24 years experience with Esso in Australia and internationally, and 6 years as Chairman and Managing Director of Esso Australia
Petroleum Leadership
Mike Yeager
Over 20 years experience upstream oil and gas, with Mobil and Exxon Mobil, with particular expertise in building major projects
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Long-life core assets, consistent with BHP Billiton strategy
BHP Billiton attributable production
Annual production
(mmboe)
120 100 80 60 40 20 0
1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
History Projected NWS Bass Strait
Source: BHP Billiton.
Notes: Historical information.
Future production is mid point estimate based on an array of future scenarios.
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Strong fit in BHP Billiton’s asset portfolio
BHP Billiton knows this business as well as any of its minerals businesses
Oil is a natural resource commodity with real attractions
Petroleum in BHP Billiton – a symbiotic relationship
Petroleum is a high quality upstream business, ideally positioned to deliver unique value
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Strong long-term global growth in energy demand
Energy demand growth (CAGR)
(mmtoe)
16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0
Renewables Hydro Nuclear Coal Gas Oil
+1.4% +2.4% +1.6%
2000 2010 2020 2030
Source : IEA World Energy Outlook
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But energy consumption growth is substantially a China story
Global primary energy consumption 2000 - 2007
(mmtoe)
3,500 3,000 2,500 2,000 1,500 1,000 500 0
2000 2001 2002 2003 2004 2005 2006
Growth in consumption 2000 - 2007
(mmtoe)
Rest of Asia Pacific India China Africa Middle East Europe & Euresia S & Central America North America
14.0% 7.0% 4.6% 13.7% 9.0% 2.9% 42.3% 6.6%
Source: BP 2007 Statistical Review.
Notes: One tonne of oil equivalent equals approximately 7.33 barrels of oil equivalent, 8. 68 tonnes of LNG, 6.29 thousand cubic metres of NG, 1.5 tonnes of hard coal, 3 tonnes of lignite and 12 Megawatt hours of electricity. The primary energy values of both nuclear and hydroelectric power generation have been derived by calculating the equivalent amount of fossil fuel required to generate the same volume of electricity in a thermal power station, assuming a conversion efficiency of 38% (the average for OECD thermal power generation).
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As is oil consumption growth
Global oil consumption 2000 - 2007
(kbpd)
30,000 25,000 20,000 15,000 10,000 5,000 0
2000 2001 2002 2003 2004 2005 2006
Growth in consumption 2000 - 2007
(kbpd)
Rest of Asia Pacific India China Africa Middle East Europe & Euresia S & Central America North America
5.4% 36.3% 4.2% 16.2% 9.1% 2.6% 18.3% 7.9%
Source: BP 2007 Statistical Review.
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By 2006, spare oil production capacity virtually eliminated
Global oil production and capacity
(mmbpd)
100 90 80 70 60 50 40 30 20 10 0
Global capacity Global production
1966 1971 1976 1981 1986 1991 1996 2001 2006
Source: International Energy Agency (IEA), DOE, Goldman Sachs Commodities Research.
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Rapid escalation in investment, but driving costs rather than capacity
IOC Capital Investment
Upstream Worldwide
US$bn
450 400 350 300 250 200 150 100 50 0
$160 $170 $217 $276 $401
2002 2003 2004 2005 2006
Source: JS Herold
Upstream Cost Inflation
Cost Index (year 1999 = 100)
180 160 140 120 100 80
Rapid Inflation
1999 2000 2001 2002 2003 2004 2005 2006
Source: EIA
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Oil price fundamentals strong – fuelled by higher costs
Marginal costs and long dated oil prices
(US$/bbl)
100 90 80 70 60 50 40 30 20 10 0
Oil price Marginal cost
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: Nymex and Goldman Sachs Equity Research.
Notes: Marginal cost is defined as the average of the highest quartile cost producers. Oil price is Nymex Crude Oil price JMCXCLPI
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What price oil?
EIA Long term price forecasts
(US$/b)
120 100 80 60 40 20 0
2008
High Reference Low
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
Source: Bloomberg, Global Insight.
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Capital strength and technical capability combine to deliver value growth through discovery
Finding and development costs (three year average)
(US$/boe)
Capital strength
Strong cash flow
Strong balance sheet
Risk management
Global portfolio view
Long-term view
45 40 35 30 25 20 15 10 5 0
FY05 FY06 FY07 BHPB FY07
BHPB Anadarko Apache Devon Hess Murphy Noble Talisman Woodside
Technical capability
Geoscience skills
Seismic expertise
Technology platform
Access to drilling expertise
Licence access
Source: BHP Billiton.
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Size and investment performance have a strong link in the oil and gas sector
Oil and gas sector weighted average return on capital employed 2005 - 2007
(% Weighted average ROCE)
25 20 15 10 5 0
Super majors Large O&G Independents Small independents
Source: JS Herold
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Strong fit in BHP Billiton’s asset portfolio
BHP Billiton knows this business as well as any of its minerals businesses
Oil is a natural resource commodity with real attractions
Petroleum in BHP Billiton – a symbiotic relationship
Petroleum is a high quality upstream business, ideally positioned to deliver unique value
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An E&P player with the power and reach of a super-major
Market capitalisation
(US$ bn April 2007)
Exxon Mobil Royal Dutch BHP Billiton BP Total Chevron ENI Conocophillips Statoilhydro BG Group Occidental Encana Imperial Oil Devon Energy Suncor Energy Repsol YPF Apache Canada Natural Woodside Husky Energy Marathon XTO Energy EOG Resources Anadarko PTT Hess Chesapeake Petro-Canada OMV AG Canadian Oil Talisman Nexen Murphy Oil Corp
(1)
0 50 100 150 200 250
Integrated E&P
Source: Bloomberg,
Note: Exxon Mobil US$452bn
Credibility and stature that Petroleum could not secure in its own right
Represented in 27 countries
A unique offer to major resource holder governments, NOC’s and other potential partners
The corporate stature and financial strength of an oil super-major
A strong track record in building and operating major resource projects
Our domicile is of lower political sensitivity
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Petroleum stands alone for consistent returns
EBIT Margin(a) (%)
70 60 50 40 30 20 10 0
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007
Notes: a) FY2005, FY2006 and FY2007 are shown on the basis of Underlying EBIT. Prior periods are calculated under UKGAAP. All periods exclude revenue and EBIT from third party trading activities.
Base Metals Petroleum Stainless Steel Materials BHP Billiton Iron Ore Aluminium D & SP Met Coal Manganese Energy coal
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Strong fit in BHP Billiton’s asset portfolio
BHP Billiton knows this business as well as any of its minerals businesses
Oil is a natural resource commodity with real attractions
Petroleum in BHP Billiton – a symbiotic relationship
Petroleum is a high quality upstream business, ideally positioned to deliver unique value
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Today’s agenda
Strong Fit in BHP Billiton’s Asset Portfolio
How we run BHP Billiton Petroleum
Driving Base Performance
Executing Growth Projects
Capturing Additional Opportunities
Delivering Results
Concluding Remarks
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Overview of BHP Billiton Petroleum
A significant oil and gas exploration and production business
Large and diverse portfolio of operating assets, development opportunities and exploration permits
Operations in six countries
Currently exploring in an additional four countries
Eight development projects currently in execution and numerous future projects in preparation
A key component of BHP Billiton for almost 40 years
Significance within BHP Billiton evident in the recent 1H FY08 financials
~20% of total underlying EBIT
~32% of total capital expenditure
~76% EBITDA margin (highest within BHP Billiton)
Petroleum competes for capital like any other part of BHP Billiton with similar financial criteria
Strong free cash flow even with record capital spending
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BHP Billiton Petroleum financial profile
Production(a) (mmboe) Revenue ex 3rd party products (US$m) Underlying EBIT (US$m) EBIT margin(b) (%) Exploration (US$m) Capital Expenditure (US$m) Reserve Replacement Ratio (%) EBIT ROCE (%)
1H08 60.5 3,112 1,972 63.2 295 1,153 NR 52
FY07 116.0 4,964 3,014 60.6 395 1,687 103 50
FY06 115.6 4,804 2,968 61.7 447 1,124 62 63
Notes:
a) Production from continuing operations.
b) EBIT margin excludes revenue and EBIT from third party trading activities.
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Global operational focus
E Canada Petroleum HQ Gulf of Mexico Colombia Trinidad The Falklands Exploration UK Algeria Pakistan Malaysia North West Shelf W Australia Bass Strait Producing and development
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Production diversified by asset and product type
Production for the quarter ending 31-Mar-2008(a)
Production by asset
(mmboe, total = 32.73)
Other 28% Algeria 6% UK 9% Atlantis 11% North West Shelf 20% Bass Strait 25% Shenzi & Genghis Khan 1%
Production by product
(mmboe, total = 32.73)
NGL 7% LNG 11% Natural Gas 33% Crude Oil Concentrate 49%
Notes: a) Other includes Stybarrow, Griffin, Minerva, Angostura, Mad Dog, West Cameron 76, Mustang, Genesis, Starlifter, Green Canyon 18/60 and Pakistan. Total barrels of oil equivalent (boe) conversions are based on 6000scf of natural gas equals 1 boe.
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Our core strategy and competitive advantages
The core strategy
Large, long-life upstream assets with multiple options – that we operate
Target organic growth opportunities through exploration which are material to BHP Billiton
Balanced portfolio of proven hydrocarbon basins and significant frontier opportunities
Functional organizational model to achieve top quartile performance
Our competitive advantages
Balance sheet strength of a super major, with the energy of a start-up
Able to compete technically with super majors in chosen locations
Industry leading geoscience imaging technology in deepwater subsalt
Trusted and dynamic partner
Speed of decisions versus competitors
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The functional organization
Very simple organizational model – worldwide functional accountability
Management focus on the parts of the business which are critical to success
Exploration
Safety
Opportunity inventory
Resource adds
Seismic and data quality
Finding costs
CRT
Development
Safety
Concept optimization
Project / drilling execution
Cost and schedule
Commission and start-up
Start up
Production
Safety
Post-start up execution
Daily production
Lowest-cost operations
Reserve recovery
Additional opportunities
Sales mtr
Marketing
Safety
Market prices
Gas market development
Gas project sponsorship
Global Support Functions
(Planning, HSEC, Human Resources, Finance, Legal, External Affairs and Information Technology)
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Management team in place to execute
J. Michael Yeager Chief Executive Petroleum
Stephen O’Rourke President Exploration
Nigel Smith President Development
Timothy Cutt President Production
Renee Klimczak President Gas Marketing
Alex Green Marketing Director Crude Marketing
Zlatko Todorcevski Chief Financial Officer
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Benefits of the worldwide functional organization
Clear accountability and organizational alignment – clear focus of management
Promotes functional excellence in all disciplines
Worldwide ranking ensures quality and materiality
Highly leveragable model targeting lowest costs
Career development without relocation for many jobs
Puts our best skills on each opportunity – swarm a problem
Rapid knowledge transfer
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The strategy has already delivered early results
Significant improvements in safety performance – 3 LTIs YTD (9 mos) vs 20 in FY06
Average daily production for Apr-08 was 378 kboed vs. 318 kboed FY06
Strong base performance – cost focus and reliability
Currently ramping up recent developments –primarily oil
Rejuvenated exploration growth opportunities
Two key discoveries
Recent success capturing key acreage positions
Focusing on people – 299 hired in the last 12 months
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Key messages
BHP Billiton Petroleum is a significant oil and gas exploration and production business and a key component of BHP Billiton
The core strategy is clear and simple
Significant organization change has occurred over the last 12-18 months
An experienced management team is implementing the strategy
The business has real competitive advantages
The strategy has already delivered early results
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Today’s agenda
Strong Fit in BHP Billiton’s Asset Portfolio
How we run BHP Billiton Petroleum
Driving Base Performance
Executing Growth Projects
Capturing Additional Opportunities
Delivering Results
Concluding Remarks
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Driving Base performance
“Base” is production and operations that are on-stream today
Driving the Base performance of our existing operations is a key operational goal
In-Country management responsibility, supported by the global functional organization
Goal is to mitigate natural production decline
Expected average natural decline of 6-9% per annum
Target to reduce natural decline to 2-3% per annum through new wells, new compression and new opportunities
Our goal is to extract maximum value from all production over the field life
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Base producing areas
Bass Strait
After almost 40 years, achieved record winter gas sales
Algeria
BHP Billiton operations stable and highly profitable
United Kingdom
Long-life assets – training ground for deepwater operations worldwide
Trinidad
Significant improvement in uptime performance
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Production growth areas
Gulf of Mexico
100 kbpd (net) new production expected by end FY09
North West Shelf
5th LNG train to start-up in late CY08
Western Australia
Stybarrow new project volumes of 40 kbpd (net)
Pakistan
Recently expanded production by ~50%
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Key strategic objectives that drive Base performance
Safety: Focus on continuously improving 1st quartile industry safety performance
Reliability: Maximize daily volume through world class reliability management
Cost: Strengthen current 1st quartile unit cost performance
Volumes: Start-up new operated projects
Prices: Obtain market pricing for all commodities
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Safety – substantially improved our safety performance, and now solidly top quartile in the industry
Achieved ~72% reduction in Total Recordable Incident Frequency Rate (TRIFR) between 2HCY05 and 1QCY08
Delivered improvements despite significant ramp-up in drilling and construction activities
Key differentiators
Operating discipline – 1,200 improvements taken
Common standards and operating systems
Key management roles that focus on safety and reliability
Good safety = Good business
Total Recordable Incident Frequency Rate (TRIFR)
(Per million hours)
5.0 4.0 3.0 2.0 1.0 0.0
OGP Top Quartile (CY06)
2H CY05 CY06 CY07 1Q CY08
Lost Time Incident Frequency Rate (LTIFR)
(Per million hours)
2.0 1.5 1.0 0.5 0.0
OGP Top Quartile (CY06)
2H CY05 CY06 CY07 1Q CY08
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Reliability – significantly improving our uptime performance
Uptime measured against 100, 100, 100
Track and monitor both scheduled and unscheduled downtime
Significant improvement in performance 3QFY08: 93.5% vs 1QFY07: 89.0%
1% improved uptime = ~1.5 mmboe (~4 kboed)
Key initiatives
All downtime is tracked
Global standards frameworks for facility integrity and maintenance
After safety and environment, primary role of operating management
Notes: a) Excludes Atlantis as it is currently in ramp-up stage.
Production efficiency(a)
(Uptime)
100% 0%
89.0% 93.6% 92.0% 94.6% 91.6% 94.0% 93.5%
1QFY07 2QFY07 3QFY07 4QFY07 1QFY08 2QFY08 3QFY08
Stybarrow field
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Cost – unit cost structure is highly competitive among peers
Cost focus is on unit cost per barrel oil equivalent
Unit operating costs holding steady ~US$5.00/boe
Rising to ~US$6.00/boe over next 4 years
Unit DD&A at ~US$6.00/boe worldwide
Forecast to rise as major projects come on-line
Both unit operating costs and unit DD&A are highly competitive vs. peers
Peer group includes: Anadarko, Apache, Devon, Hess, Murphy, Noble, Talisman, and Woodside.
Source: BHP Billiton, John S. Herold, Inc. and annual reports.
Cash operating costs
(US$/boe)
25 20 15 10 5 0
Peers
2005 2006 2007 1H08
DD&A
(US$/boe)
25 20 15 10 5 0
Peers
2005 2006 2007 1H08
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Volumes – start up four new projects in FY08
Incremental capacity – BHP Billiton’s attributable share
(boed)
88,550
158,147
Total capacity
89,500
8,422 Current net production
21,175
40,000
Stybarrow
Genghis Khan
Zamzama
Atlantis South
Total
% Working Interest 50.0% 44.0% 38.5% 44.0%
Gross capacity 80,000 bpd 55,000 bpd 150 mmcfd 200,000 bpd 180 mmcfd 335,000 bpd 330 mmcfd
Net capacity 40,000 bpd 21,175 bpd 50 mmcfd 77,000 bpd 69 mmcfd 138,175 bpd 119 mmcfd
Current On plateau Drilling On plateau Drilling 89,500 boed
Note: Total barrels of oil equivalent (boe) conversions are based on 6000scf of natural gas equals 1 boe.
Net capacity and production is after applicable royalty
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Stybarrow (50% WI, BHP Billiton operated)
Performance highlights
FPSO and subsea wells
Brought on-stream in November approximately two months ahead of schedule
Achieved sustained production at design capacity of 80 kbpd (gross)
Record-setting single well flow rates of approximately 32 kbpd
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Genghis Khan (44% WI, BHP Billiton operated)
Performance highlights
Subsea wells tied back to Marco Polo platform
Design capacity of 55 kbpd (gross)
Brought on-stream in October, bringing Shenzi production forward by ~ 2 years
Two wells completed
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Zamzama Phase II (38.5 % WI, BHP Billiton operated)
Performance highlights
Plant expansion started up Feb 2008
Gas plant expansion design capacity 150 mmcfd (gross)
Currently optimizing production systems
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Atlantis (44% WI, non-operated)
Performance highlights
Semi-submersible platform with deepwater subsea wells
Brought on-stream in October (crude) through December (natural gas)
Design capacity for 200 kbpd; 180 mmcfd (gross)
6 wells currently producing at 100 kbpd (gross), 2 additional wells planned on-stream by end of FY08
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Prices – obtain market pricing
Global Crude and Gas Marketing organizations
Measure product sales vs. available production for sale daily
Goal is to capture maximum daily price, or as close as we can
Full price exposure is our corporate position
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Pricing environment is strong
Crude prices
100 kbpd (net) GoM new production in progress
40 kbpd (net) Western Australia new production on-stream
Excellent fiscal regimes – captures full upside
Gas sold regionally, supported by clean fuel initiatives and growing economies
Shorter duration contracts and price reopeners, price structure evolving
New gas volumes coming on-stream – NWS domestic gas, Kipper, Turrum, Angostura and Macedon
LNG market has completely reversed in last 3 years due to a shift in demand-supply fundamentals and crude price linkages
LNG is a sellers market today with competing buyers
Recent Asian LNG contracts are at or close to crude parity
Most LNG production has price re-openers and new sales capture new contract pricing
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By 2012, ~60% of gas and LNG production will have price reopener mechanisms available
Gas and LNG contracts pricing structure
100% 80% 60% 40% 20% 0%
FY2008 FY2009 FY2010 FY2011 FY2012
Contracts with NO Reopener
Contracts with reopener (a)
Contracts to expire within 4yrs
Short term sales (0-4yrs)
Notes:
a) Includes pricing structures closely linked to uncapped market indices
Most current long-term LNG contracts contain regular price reopeners
Old LNG contracts were negotiated at lower prevailing crude prices
LNG contract reopeners are leading to large price increases – tied to crude
Also our new, large volume LNG contracts capture current crude price terms
Significant revenue upside from old and new contracts
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Key messages
Driving the Base performance of our existing operations – to extract maximum value from all production – is a key operational goal
Safety improvements have been realized – continue improvements to maintain top quartile safety performance
Excellent uptime performance and year-on-year improvement – focus on 100,100,100
Maintain competitive industry cost position – continuous improvement initiatives are a daily focus
Excellent performance achieved in new project start-ups
Gas and LNG contract reopeners, coupled with new volumes, provide significant revenue upside
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Today’s agenda
Strong Fit in BHP Billiton’s Asset Portfolio
How we run BHP Billiton Petroleum
Driving Base Performance
Executing Growth Projects
Capturing Additional Opportunities
Delivering Results
Concluding Remarks
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Petroleum projects are a key element of the BHP Billiton growth pipeline
WA Iron Ore Quantum 2 DRC Smelter CMSA Heap Leach 2 Olympic Dam Expansion 1 Angola & DRC Macedon CMSA Leach 1 Perseverance Deeps NWS Nth Rankin B WA Iron Ore RGP 4
RBM Thebe Cannington Life Ext Nimba Mad Dog West Boffa/Santou Refinery KNS Exp Cerrejon Opt Exp Angostura Gas Maruwai Stage 2 Atlantis North NWS Angel Kipper
CMSA Pyro Expansion Corridor Sands 2 SA Mn Ore Exp Goonyella Expansions Gabon Peak Downs Exp Ekati WA Iron Ore RGP 5 Neptune Klipstruit NWS T5
Puma Olympic Dam Expansion 2 Wards Well Scarborough WA Iron Ore Quantum 1 Shenzi Nth Samarco 4 Neptune Nth Antamina Exp Turrum Neptune Shenzi Newcastle Third Port
Blackwater UG NWS WFGH Olympic Damn Expansion 3 Caroona Kennedy Browse LNG Resolution Canadian Potash Daunia Bakhuis Navajo Sth Worsley E&G GEMCO Samarco Zamzama Phase 2
Hallmark CW Africa Exploration Knotty Head Maya Nickel Corridor Sands 1 Saraji Eastern Indonesian Facility Red Hill UG Escondida 3rd Conc Guinea Alumina NWS CWLH Mt Arthur Coal UG Maruwai Stage 1 Cliffs Alumar Douglas-Middelburg Pyrenees
2013 2010 2008
Future Options Feasibility Execution
As at 2 May 2008
Proposed capital expenditure
< $500m $501m-$2bn $2bn+
CSG
Aluminium Energy Coal Met Coal
Base Metals Iron Ore Petroleum
D&SP Manganese SSM
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Beyond Stybarrow, Genghis Khan, Zamzama, and Atlantis – 8 projects in execution
OIL GAS LNG
UK
Petroleum HQ Algeria Pakistan
Trinidad
Gulf of Mexico Neptune (35%)
50 kbpd / 50mmcfd deepwater development
HU&C completed; 6 wells drilled & completed
Hull remediation in progress
Start-up anticipated 2Q CY08
Shenzi (44%)
100 kbpd / 50mmcfd deepwater development
Fabrication in progress; 2 wells drilled & completed
Start-up anticipated mid CY09
Altantis North (44%)
1-3 well subsea tie back to Atlantis South
Start-up anticipated 2H CY09
North West Shelf Train V (16.67%)
4.2 mtpa LNG processing train
Under construction
Start-up anticipated late CY08
Angel (16.67%)
800mmcfd / 50 kbpd condensate development
Topsides installed
Start-up anticipated end CY08
North Rankin B (16.67%)
2.5 bcfd gas facility
Sanctioned Mar-08
Start-up anticipated CY12
Note: All production rates are gross production basis
Bass Strait Kipper (32.5%)
80mmcfd / 10 kbpd condensate development
Subsea contracts executed
Start-up anticipated CY11
W Australia Pyrenees (71.43%)
96 kbpd / 60mmcfd FPSO development
FPSO conversion underway
Start-up anticipated 1H CY10
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Neptune (35% WI, BHP Billiton operated)
Project overview
Tension leg platform and subsea wells
4,250ft water depth
50 kbpd and 50mmcfd capacity (gross)
HU&C completed; 6 wells drilled & completed
Hull remediation in progress
Start-up 2Q CY08
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Projects such as Neptune are large scale
Neptune development relative to Empire State Building
Neptune TLP and seafloor piping layout
4th deepest TLP in the world
Neptune development relative to Manhattan
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Shenzi (44% WI, BHP Billiton operated)
Project overview
TLP and subsea wells
4,300ft water depth – 2nd deepest TLP in the world
100 kbpd and 50mmcfd capacity (gross)
Fabrication in progress; 2 wells drilled & completed
Start-up mid CY09
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Pyrenees (71.43% WI, BHP Billiton operated)
Project overview
FPSO and subsea wells
96 kbpd capacity (gross)
FPSO conversion underway
Start-up 1H CY10
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Progression of BHP Billiton’s project experience
2006 Mustang Fixed Platform
1996 Liverpool Bay Fixed Platform
2004 Angostura Fixed Platform
1995 Cossack Pioneer FPSO
1999 Buffalo FPSO
1989 Challis* FPSO
1986 Jabiru* Venture FPSO
2000 Keith Subsea Tieback
1993 Bruce Fixed Platform
1994 Griffin FPSO
2010 Pyrenees FPSO
1999 Laminaria Northern Endeavor FPSO
2001 Typhoon Mini TLP
1998 Boris Subsea Tieback
1998 Genesis Classic Spar
2008 Stybarrow FPSO
2007 Neptune TLP
2009 Shenzi TLP
2004 Mad Dog Truss Spar
2007 Atlantis Semi FPS
2003 C.R. Luigs DP Drillship
38 feet (12 m)
95 feet (29 m)
197 feet (60 m)
250 feet (76 m)
255 feet (78 m)
328 feet (100 m)
400 feet (122 m)
400 feet (122 m)
400 feet (122 m)
426 feet (130 m)
820 feet (250 m)
1,263 feet (385 m)
2,100 feet (640 m)
2,400 feet (732 m)
2,600 feet (792 m)
2,707 feet (825 m)
4,250 feet (1,296 m)
4,300 feet (1,311 m)
4,500 feet (1,372 m)
7,040 feet (2,146 m)
Chincok 3 8,830 feet (2.691 m)
Phase 1
Offshore shelf experience as an Operator
Phase 2
Deepwater experience as a Partner
Phase 3
Deepwater experience as a Partner & Operator
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Leading edge tension leg platform experience
TLPs – Sanctioned, Installed, Operating or Decommissioned
3,000-foot water depth
4,000-foot water depth
Source: Offshore Magazine / Mustang Engineering – 2007
Deepwater Solutions & Records for Concept Selection
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Industry leading deepwater drilling performance
GoM deepwater exploration and appraisal wells
(Days per 1000 ft drilled, Jan-2000 to Dec-2007)
8 7 6 5 4 3 2 1 0
23 wells 68 wells 17 wells 26 wells 44 wells 39 wells 26 wells 8 wells 8 wells 13 wells
BHP Billiton Kerr McGee Unocal Anadarko Shell BP Chevron Conoco Exxon Hess
Best BHP Billiton development well at 1.49 days/1000 ft (Shenzi B1-2)
Source: BHP Billiton review of operated exploration and appraisal well scout tickets. Reported days from Spud to total depth.
Note: Drilling comparison does not include geological side tracks
On average, it takes BHP Billiton less time to reach total depth than our competitors
Time = Cost
Consistently reach target depth
Committed rigs on contract to execute deepwater program
“DD1” through June 2012
“Luigs” through Sept 2013
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Ahead – Inventory of future projects under design and evaluation
OIL GAS LNG
UK
Petroleum HQ Algeria Pakistan
Gulf of Mexico
Mad Dog West (23.9%)
Subsea tie-back
Puma (29.8%)
Subsea tie-back
Shenzi N (44%)
Subsea tie-back
Neptune N (35%)
Subsea tie-back
Knotty Head (25%)
Deepwater development
Trinidad
Angostura Gas (45%)
Gas field development
W Australia Macedon (71.43%)
Subsea wells and gas plant
Thebe (100%)
LNG development
Scarborough (50%)
LNG development
Browse LNG (10.5%)
LNG development
North West Shelf NWS CWLH (16.67%)
Replacement of FPSO and associated subsea facilities
NWS WFGH (16.67%)
Gas field development
Bass Strait Turrum (50%)
Gas field development
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Significant resource position to support long term growth
Attributable Reserves and Resources
(mmboe, as at 30-Jun-2007)
3,500 3,000 2,500 2,000 1,500 1,000 500 0
Probable Reserves plus 2C Contingent Resources 2,241 mmboe
Proved Reserves 1,353 mmboe
Onshore
Offshore
Deepwater
LNG
Africa
Europe
Americas
Asia
Australia
Gas
Liquids
Type Region Product Product
Source: BHP Billiton 2007 Annual Report.
Total Resources 3,594 mmboe
Gas
Liquids
Angostura Bass Strait Browse NWS Gas Exmouth Zamzama Scarborough
Atlantis Algeria Bass Strait GoM Shenzi Pyrenees
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Key messages
Petroleum makes a significant contribution to BHP Billiton’s overall growth prospects
BHP Billiton Petroleum is executing leading-edge deepwater projects
The 8 projects currently in execution underpin our forecast volume growth of 10% CAGR to FY11
Deep inventory of future development options already identified
We have a sizeable resource base requiring future development
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Today’s agenda
Strong Fit in BHP Billiton’s Asset Portfolio
How we run BHP Billiton Petroleum
Driving Base Performance
Executing Growth Projects
Capturing Additional Opportunities
Delivering Results
Concluding Remarks
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Exploration strategy – capturing additional opportunities
Target opportunities that are material to BHP Billiton
Balance proven hydrocarbon plays with frontier exploration
Focus on opportunities that have the potential for multiple successes
Seeking Control and Operatorship
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Significant gains over the past 18 months
Rejuvenated growth opportunities
Acquired a number of key acreage positions
75% increase in exploration spending in FY08 to ~US$700m from US$395m in FY07 (net)
Forward exploration spend anticipated to be at or above FY08 level
Increased equity ownership from ~41% to ~55%
Increased percentage of portfolio that is Operated to ~66%
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Recent exploration successes
Thebe
Major gas discovery in Western Australia
100% BHP Billiton working interest
Mad Dog West
W2 Well Path
Original LKO
Post drill LKO
Major field extension in deepwater GoM
23.9% BHP Billiton working interest
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Key exploration and appraisal wells planned
Canadian Laurentian
1 well planned
Gulf of Mexico
8 wells planned
Colombia
2 wells planned
Malaysia
4 wells planned
NW Australia
6 wells planned
Falklands
2 wells planned
Exploration and appraisal wells
Material in size to BHP Billiton
Balance proven plays and frontier exploration
Opportunities with potential for multiple successes
Control and Operatorship
Gippsland
1 well planned
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Proven play:
W Australia (41 permits, 8.3-100% WI, 10 permits operated)
Exmouth
Thebe
Scarborough
Macedon
Browse
Approximately 9.2 million acres (gross), WD 170 to 2,500m
Two major discoveries – Thebe (100% WI), Scarborough (50% WI)
Running 3D seismic on all other operated acreage
Source: WSI Earth by ESRI, Includes data supplied by IHS Inc., its subsidiary and affiliated companies; Copyright (2008) all rights reserved.
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Proven play:
GoM (318 Blocks, 62% Avg WI, 222 blocks operated)
Miocene Play
Paleogene Play
1.72 million acres (gross) (excluding March 2008 lease sale), WD 10 to 7,600ft
Major BHP Billiton discoveries in Atwater Foldbelt Miocene play, now in development or production
Excellent acreage position in play extension in central Green Canyon area
Successful acreage capture in last two lease sales—successful bidder on 83 tracts (US$284m)
Preparing for active exploration program
Source: WSI Earth by ESRI, Includes data supplied by IHS Inc., its subsidiary and affiliated companies; Copyright (2008) all rights reserved.
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Proven play:
Malaysia (Sabah) (2 Blocks, 60% WI, operated)
Kikeh Development
Major Murphy discovery
Start-up 2007
120 kbpd capacity
Ubah-2 – Oct 2005 Shell discovery Wildcat and stepout wells
2.1 million acres (gross) – WD 1,600 to 2,800m
Extension of Deepwater Miocene fold belt play
New 3-D seismic acquisition during CY08
4 commitment wells
Expect to commence drilling operations in 2009
Source: WSI Earth by ESRI, Includes data supplied by IHS Inc., its subsidiary and affiliated companies; Copyright (2008) all rights reserved.
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Frontier exploration:
Colombia (2 blocks, 75% WI, operated)
2.3 million acres (gross) – WD 500 to 2,700m
Large tracts of frontier acreage with significant upside
New 3-D acquisition complete
No commitment wells – expect to be ready to drill in 2009
Source: WSI Earth by ESRI, Includes data supplied by IHS Inc., its subsidiary and affiliated companies; Copyright (2008) all rights reserved.
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Frontier exploration:
The Falklands (14 licenses, 51% WI, operated)
11 million acres (gross) – WD 200 to 2,000m
Frontier acreage covering prospective portion of two large sub-basins
Multiple leads with significant potential
Two commitment wells – expect to commence drilling in 2009 – 2010
Source: WSI Earth by ESRI, Includes data supplied by IHS Inc., its subsidiary and affiliated companies; Copyright (2008) all rights reserved.
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Key messages
The exploration strategy is clear and simple
We will target opportunities that are material to BHP Billiton
Recently acquired multiple key blocks with Operatorship
Exploration spend increased to approximately US$700m
Made key discoveries in GoM and Western Australia
Planning to drill 24 exploration and appraisal wells in the near term
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Today’s agenda
Strong Fit in BHP Billiton’s Asset Portfolio
How we run BHP Billiton Petroleum
Driving Base Performance
Executing Growth Projects
Capturing Additional Opportunities
Delivering Results
Concluding Remarks
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Forecast volume growth of ~10% CAGR to FY11, underpinned by projects in execution
BHP Billiton net production forecast
(mmboe/yr)
200 150 100 50 0
~10% CAGR
Gas
Liquids
FY07 FY08E FY09E FY10E FY11E
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BHP Billiton Petroleum – Delivering results
How we run BHP
Billiton Petroleum
Functional business model has been established
An experienced management team is in place and executing
The core strategy is clear and simple
Driving base
Top quartile industry safety performance performance
Achieved 93.5% production uptime in 3Q FY08
Low cost, high margin operations
Gas and LNG contract reopeners, coupled with new volumes, capture current prices Executing growth
Forecast volume growth of ~10% CAGR to FY11, underpinned by projects in execution projects
Deep inventory of development projects beyond those in execution
Greater than 100% reserve replacement expected in FY08
Capturing additional
Exploration portfolio has been rejuvenated with new acreage acquired opportunities
75% increase in exploration expenditure for FY08 to US$700m (net)
Increased working interest equity and Operatorship
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Today’s agenda
Strong Fit in BHP Billiton’s Asset Portfolio
How we run BHP Billiton Petroleum
Driving Base Performance
Executing Growth Projects
Capturing Additional Opportunities
Delivering Results
Concluding Remarks
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Concluding remarks on Petroleum
Petroleum fits strategically and BHP Billiton is a natural owner
Strong BHP Billiton technical and human capability
The business is delivering results – operating performance and growth
Attractive and visible growth profile
Substantially low risk operating geographies and high leverage to prices
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Our offer for Rio – Unlocking value
Combined entity will have a unique portfolio of tier 1 assets
Highly complementary large-scale, low-cost, long-life assets
Strengthened asset portfolio and superior future growth options
Unparalleled exposure to overlapping mineral basin positions and infrastructure
Optimisation of production efficiencies
Delivery of more volume, faster, to customers
Enhanced earnings through quantified synergies and benefits of combination
Broader stakeholders will benefit (customers, communities, employees)
A natural fit – common strategies, heritage, culture and values
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BHP Billiton’s 45% premium is a substantial value uplift, prior to the pro rata share of synergies
BHP Billiton / Rio Tinto Exchange Ratio(a)
3.8 for 1 3.6 for 1 3.4 for 1 3.2 for 1 3.0 for 1 2.8 for 1 2.6 for 1 2.4 for 1 2.2 for 1
12-Dec: BHP Billiton Investor Presentation
1-Feb: Chinalco purchase of 12% of Rio Tinto Plc
6-Feb: BHP Billiton HY Results and Rule 2.5 Announcement
26-Nov: Rio Tinto Investor Presentation
15-Jan: Day one of Rio Tinto Pilbara media visit
08-Nov: BHP Billiton confirms approach to Rio Tinto
06-Feb-2008 BHP
Billiton Offer
12-Nov-2007 BHP Billiton Proposal
12-Jul: Rio Tinto announces Alcan Offer
Pre approach fair value exchange ratio
12-Jul-2007 06-Sep-2007 01-Nov-2007 27-Dec-2007 21-Feb-2008 17-Apr-2008
Source: Datastream as at 5 May 2008
a) Exchange ratio assumes 100% BHP Billiton Ltd shares for each Rio Tinto Ltd share and BHP Billiton shares for each Rio Tinto plc share consisting of 80% BHP Billiton Plc shares and 20% BHP Billiton Ltd shares. 2.4 fair value exchange ratio represents average for period between Rio Tinto offer for Alcan (12-Jul-2007) and BHP Billiton approach to Rio Tinto Board (1-Nov-2007).
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Conclusion – Strength, stability and growth
BHP Billiton’s core strategy remains unchanged
BHP Billiton is focused on producing volumes from its low cost assets to take advantage of the strong market conditions
A combination of BHP Billiton and Rio Tinto can generate substantial additional value for shareholders – they are a natural fit
This combination unlocks a very material and unique pool of value:
More production, faster and lower cost; enhanced future growth options; traditional synergies
Quantifiable value; incremental EBITDA impact growing to estimated $3.7B
The terms of the Rio Tinto offer reflect a good deal for both companies’ shareholders
BHP Billiton on a standalone basis is an attractive business with a compelling growth profile
Transaction must be value accretive for all BHP shareholders
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