Billiton's boss chases credibility -

BHP Billiton Ltd's new petroleum boss is seeking to "regain credibility" for the mining giant's energy business, but has started his new job by delivering bad news.
Group president of energy Mike Yeager told investors that the beleaguered Atlantis South Development in the Gulf Of Mexico is unlikely to start production until late in the first half of 2007.
BHP Billiton's forecast of flat petroleum production for its 2007 fiscal year made in July was based on Atlantis, which has had its costs blow out by at least 30 per cent, producing first oil in the first quarter of 2007.
"We'll have very little impact from Atlantis in our fiscal year 2007," Mr Yeager said.
The news is likely to prompt downgrades to market estimates for production levels and earnings.
But he added that the miner is using the extra time from weather delays and technical difficulties to "drill a few more wells" and achieve a more rapid build-up in production.
Mr Yeager, who joined BHP Billiton in April after a career with Mobil and ExxonMobil, said that while in some ways BHP Billiton's energy operations are credible, there are other ways in which it needs to improve.
"We're going to try to do our very best to regain our credibility and show you where we're going to be putting our attention," he said.
"When it comes though to saying that we've got a solid record of predicting our volumes and delivering those ... we recognise we need to have a better, more predictable story there.
"We've got some tough things to deal with ... We accept those challenges and clearly feel like we're getting on top of them every day."
But in the meantime, BHP Billiton did confirm that petroleum production in the first quarter of fiscal 2007 will likely be similar to the last quarter of 2006, when it produced an average 336,000 barrels of oil equivalent a day.
Mr Yeager also said that BHP Billiton is still feeling market cost pressures, but is working to offset them.
"We do have cost pressure - it is there every day and it is in every form," he said.
The new energy boss is overseeing a streamlining of BHP Billiton's energy business, shifting away from being geographically based to worldwide management, and trying to focus on efficiencies.
"Our goal is to have 100 per cent of our wells producing at 100 per cent their maximum rate, 100 per cent of the time," Mr Yeager said.
"Full-year 2007 actual uptime to date is 94 per cent excluding planned shutdowns."
He also said he is eyeing a cut in the annual natural decline in resources to five per cent, from the current eight to 10 per cent through targeted exploration and development.
Exploration activity in places including the Gulf Of Mexico, Australia, Trinidad, Algeria, Colombia, South Africa and Namibia was detailed, and Mr Yeager said there are confidential bids under evaluation in a number of additional countries.
There were few surprises at BHP Billiton's other Gulf of Mexico projects, the 50,000 barrels of oil a day Neptune project still expected to post first production in the last quarter of calendar year 2007.
Shenzi, expected to eventually produce 100,000 barrels of oil a day, is also still expecting first production in the middle of calendar year 2009.
BHP Billiton shares finished down 27 cents or almost one per cent at $27.18.