BHP BILLITON WELL POSITIONED TO WEATHER DOWNTURN, ANALYSTS SAY.

MELBOURNE, Jan 2 Asia Pulse - Over-supply and Middle East tensions have left commodity prices not far above record lows going into 2003, but resource giant BHP Billiton (ASX:BHP), with its diverse portfolio, is well positioned to weather the downturn.

Analysts also believe BHP Billiton will benefit this year from its strong petroleum interests as oil prices rise.

And unlike some of its competitors, it has the flexibility to ramp up production quickly if the climate for commodities overall changes.

With benefits from the A$57 billion (US$31.96 billion), June 2001 merger between Australia's BHP and Billiton plc still filtering through, analysts are confident BHP Billiton will strengthen through consolidation and cost cutting during 2003.

The multinational company is still on track to make the US$270 million of merger synergies forecast by the end of the 2002/03 financial year.

Also to come is another US$500 million in cost savings expected over a three year period from June 2001.

"They've delivered US$220 million (in merger synergies) already so they're pretty much 80 per cent of the way there," UBS Warburg research director Glyn Lawcock said.