BHP Billiton expects U.S. shale business to become major cash flow generator

Global miner BHP Billiton said Wednesday that its U.S. shale oil business would be one of its major cash flow generators by 2020, contributing almost 3 billion U.S. dollars a year to the company by the end of the decade.

BHP Billiton plans to invest about 4 billion U.S. dollars a year in the U.S. shale business to increase its oil and gas production.

The company expects its total onshore U.S. production to reach 500,000 barrels of oil equivalent a day by 2017.

"In this scenario, Onshore U.S. is expected to be self-funding in the 2016 financial year before generating almost 3 billion U.S. dollars of free cash flow in the 2020 financial year," BHP Billiton's head of petroleum and potash Tim Cutt said in a statement.

"As a result, Onshore U.S. is well positioned to become another major cash flow generator for BHP Billiton."

Cutt said the company had identified a focus area in the Permian Basin of Texas, where it was pursuing a 100,000 barrel of oil equivalent a day development.

He said the company's oil and gas production guidance for the 2014 financial year remained unchanged at 250 million barrels of oil equivalent.