BHP Billiton (NYSE:BHP) says it plans to spend about $4.5 billion on developing shale gas assets in 2012.
Earlier this year, BHP, the world's largest mining company, spent nearly $17 billion buying Petrohawk Energy and Chesapeake Energy with the aim of doubling petroleum production over the next five years.
“This is going to be a gamechanger around the world and for BHP Billiton not to be part of it would be irresponsible,” BHP petroleum chief executive Michael Yeager said in slides prepared for an investor presentation to allay concerns about the company’s push into shale gas.
BHP said it plans to spend around $5.5 billion a year by 2015, about a billion more than previous estimates, and around $6.5 billion a year in 2020 on U.S. shale.
Yeager told investors that BHP will ramp up drilling at the Eagle Ford, Haynesville and Fayettville assets formerly owned by Petrohawk and Chesapeake.
BHP's production is expected to increase from 600,000 barrels of oil a day by 2015 to 1 million bopd by 2020.
The company is hoping to capitalize from an increase in demand for US natural gas as buyers, driven by government efforts to reduce emissions, switch from coal to gas.