BHP's big shale gas push

11 April 2012

London-listed mining giant BHP Billiton today set out plans to spend over $4 billion (£2.5 billion) developing shale gas, best known for the environmentally controversial fracking method used to extract it.

Hydraulic fracturing, or fracking, involves pumping liquid and sand at high pressure through shale to crack rock formations, releasing trapped gas.

It has been linked by some in the United States to potential water contamination and was blamed for earth tremors in Lancashire near where fracking was taking place.

BHP has already spent almost $17 billion on two major shale gas acquisitions this year, buying Petrohawk Energy in August and Chesapeake Energy's interest in an Arkansas field in February. But today Michael Yeager, head of petroleum at the resources giant, said BHP would spend about $4.5 billion developing shale gas in the US next year, hitting $5 billion-$6 billion a year by 2015 and $6 billion-$7 billion a year by 2020.

That's about $1 billion a year more than the BHP's previous estimates.

The miner told investors it was "taking a prudent approach to address concerns relating to seismic activity".

It has plugged two water injection wells in Arkansas as a precautionary measure even though it claimed, "reviews by scientists have been inconclusive as earthquake swarms were recorded decades prior to shale industry activity".

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