MELBOURNE, Jan 20 (Reuters) - BHP Billiton (L:BLT) increased its iron ore output by 1 percent in the December quarter from a year earlier, the small increase dented by a dam disaster at its Brazilian joint venture which forced BHP to cut its production forecast for the year to June 2016.
BHP's oil and gas output, which sets it apart from other big miners, fell 5 percent to 60.2 million barrels of oil equivalent (mmboe) as it cut production at its U.S. shale fields amid a collapse in oil prices to 12-year lows.
It maintained its full year petroleum output forecast, however, boosted by offshore production.
The world's biggest miner is reeling as oil prices have slumped further than expected at the same time as its other products, iron ore, copper and coal, have plunged to multi-year lows, which investors expect will force BHP to cut its long sacred dividend.
"We continue to cut costs and remain focused on safely improving our operational performance to enhance the resilience of our business," BHP Chief Executive Andrew Mackenzie said in a statement.
In a sign the company may cut its dividend as earnings slide, he said the company was focused on maintaining its investment grade credit rating.
"In this environment we are also committed to protecting our strong balance sheet so we have the financial flexibility to manage further volatility," Mackenzie said.
Iron ore output of 57 million tonnes produced in the December quarter fell short of a Goldman Sachs (N:GS) forecast of 59.3 million tonnes.
BHP said it now expects to produce 237 million tonnes in the full year to June 2016, down by 10 million tonnes from its earlier forecast, as Samarco in Brazil, its joint venture with Vale VALE5.SA has suspended production following a dam burst last November that killed 17 people.
Copper production fell 9 percent to 400,000 tonnes because of lower grades at the Escondida mine in Chile, but that beat Goldman Sachs' forecast of 377,000 tonnes.