PETROLEUM production at BHP Billiton’s projects around the world was down three per cent in the March quarter as the company reduced its US onshore rig numbers by 35% – from 26 to 17 rigs.

BHP Billiton chief executive Andrew Mackenzie said in the company’s quarterly operational review that the decision was made in response to current market conditions, adding that the group had a solid base from which to build.

“We continue to review our drilling and development program as we seek to maximise the value of our resource base,” he said.

“With higher oil prices expected over the medium term, we believe deferring development will create more value than producing today.”

Despite the fall in the quarter, petroleum production had risen 6% during the nine months of the 2014-2015 financial year to 192.5 million barrels of oil equivalent (MMboe), supported by a 76% increase in onshore US liquids volumes to 40.2 MMboe.

“This strong performance was underpinned by a doubling of liquids production from both the Black Hawk and Permian as we continue to realise significant improvements in shale drilling and completions efficiency,” BHP said.

“In our conventional business, strong uptime performance at Atlantis and Pyrenees was offset by natural field decline at North West Shelf and the impact of industrial action at Bass Strait.”

Despite this, the company’s petroleum production guidance remains unchanged at 225 MMboe, BHP Billiton said.

“The reduction in drilling activity will not impact 2015 production guidance and we are confident that shale liquids will rise by over 50% within the period,” the company said.

While the company plans to spend about US$600 million on exploration during the 2014-2015 financial year, none was spent during the March quarter.

BHP Billiton had spent US$393 million to date, with the company focusing on the Gulf of Mexico, Western Australia and Trinidad and Tobago, where a seismic acquisition program had been completed.