BHP Billiton Ltd., Australia’s biggest oil and gas producer, said it will increasingly consider acquisitions in petroleum to add to growth opportunities.

Acquisitions may help petroleum expand to as much as 30 percent of the company in terms of value, after the planned purchase of Rio Tinto Group, up from about 20 percent now, J. Michael Yeager, chief executive officer of BHP’s petroleum business, said today in Melbourne. Organic growth will still be the main driver of gains in oil and gas, he said.

BHP, also the world’s biggest mining company, is bolstering oil and gas in a bid to take advantage of record crude-oil prices and rising energy demand in emerging economies. Chief Executive Officer Marius Kloppers is also using the earnings potential of petroleum, BHP’s highest-margin business, to bolster his case for the $178 billion hostile bid for Rio Tinto.

“BHP may be tempted to accelerate the search for acquisitions because they’ve got so much cash,” said Ken West, who manages the equivalent of $2.8 billion as a partner at Melbourne-based Perennial Investment Partners Ltd. “Certainly in the current environment you would be paying a full price for known reserves of gas and oil.”

BHP’s $594 million purchase of a stake in the Genghis Khan oil project in the Gulf of Mexico in 2006 was the petroleum business’s first acquisition for 10 years, Yeager said. Acquisitions “will become a more and more important part of our business,” he said.

Money `No Limiter’

BHP fell A$1.07, or 2.3 percent, to A$45.78 in Sydney trading, lagging behind a 0.3 percent drop in the exchange’s benchmark index.

“Our board would love to see us bring forward opportunities and we’re working that analysis right now of what that would look like,” Yeager told reporters. “We’ve got more money than we can spend, so that’s not a limiter.”

The oil and gas business is a “strong fit” with BHP’s metals operations and unique among units for yielding consistent returns, Kloppers said last week in London.

“It’s the one business that, given the size of this market, our growth options are virtually unlimited,” Kloppers said.

BHP’s oil unit is the world’s 25th-largest publicly traded petroleum business in terms of reserves and production, Yeager said. It has about 1.4 billion barrels of oil equivalent in proven reserves, plus about 2.2 billion barrels of probable reserves and resources.

`In the Bag’

BHP’s oil and gas production is being boosted by the start- up of new projects in the U.S., Australia and Pakistan. Output averaged more than 400,000 barrels of oil equivalent last week, up from 378,000 barrels in April, and 318,000 barrels in the 2006 financial year, he said.

Forecast growth of at least 10 percent in oil and gas production in the year ending June 30, is “in the bag” based on performance in the first three quarters, and output in the fourth quarter will exceed earlier periods, Yeager said. Production should grow by at least 10 percent for another three or four years after that, he said.

Four new projects starting up this business year, including Stybarrow in Australia, Genghis Khan and Atlantis South in the Gulf of Mexico, and Zamzama in Pakistan, should add about 158,000 barrels a day to output, Yeager said. So far, they are adding 89,500 barrels a day, as two are yet to reach full output, he said.

Spending on oil and gas exploration, which will rise to $700 million this business year, may reach $1 billion a year in future years in line with BHP’s peers, Yeager said.

“The only thing we need is credible opportunities.”

Woodside’s “number one priority” is to expand its liquefied natural gas production business in the way it has expanded oil output in the Gulf of Mexico, to add to production after 2013, Yeager said. Nearer-term growth will come from the Neptune and Shenzi oil projects in the Gulf of Mexico, the North West Shelf venture’s LNG expansion and the Pyrenees and Kipper projects in Australia, he said.