BHP Billiton's disappearing exploration budget

BHP Billiton's 2013 exploration budget will include no greenfield spending outside of copper and 2014 capital and exploration expenditure will decline to roughly $18 billion, according to CEO Andrew Mackenzie who presented in Barcelona Tuesday.

Mackenzie is calling the exploration budget "optimized," and claims that BHP "can now sustainably reduce [its] exploration budget without affecting plans" as a result of ample resource in the company's major basins.

"You will recognise my passion for our productivity agenda and this extends to our development projects. We must challenge ourselves to increase returns from new investment, in the same way that we need to squeeze returns from our installed infrastructure."

"By reducing our annual spend and increasing internal competition for capital, we expect to maximise returns from incremental investment, while delivering a substantial increase in the Group’s free cash flow."

 Source: BHP Billiton