BHP to merge oil and gas assets with Australia's Woodside
Mining giant BHP announced Tuesday it will merge its oil and
gas assets with Australia's Woodside, in a multibillion-dollar deal that sees
BHP exit the liquid fossil fuel business.
The Anglo-Australian firm said the agreement would see
Woodside issue new shares to BHP shareholders as it becomes a global top 10 LNG
producer.
Woodside's existing shareholders would retain a 52 percent
stake in the newly expanded Woodside, while BHP shareholders would own 48
percent.
"Bringing the BHP and Woodside assets together will
provide choice for BHP shareholders, unlock synergies in how these assets are
managed and allow capital to be deployed to the highest quality
opportunities," BHP chief executive Mike Henry said.
"The merger will also enable the skills, talent and
technology of both organisations to build a resilient future as the world's
needs evolve."
BHP's petroleum business is worth US$15.4 billion, the
company said, with oil and gas assets in the Gulf of Mexico, Australia,
Trinidad and Tobago.
"Merging Woodside with BHP's oil and gas business
delivers a stronger balance sheet, increased cash flow and enduring financial
strength to fund planned developments in the near term and new energy sources
into the future," said Woodside CEO and managing director Meg O'Neill.
The deal remains subject to approval from investors and
regulators.
It comes just a year after BHP signalled a transition away
from the intensely polluting thermal coal market as it aims to reach net-zero
emissions by 2050.
BHP also announced in June that it had reached a deal to
sell its stake in the vast Colombian coal mine Cerrejon -- one of Latin
America's largest mines -- to project partner Glencore.
O'Neill said Woodside would continue reducing carbon
emissions from the company's newly combined portfolio as the firm strives to
achieve the same 2050 target as BHP.
Separately, BHP said it would invest US$5.7 billion to
develop the Jansen potash mine in Canada as it diversifies its portfolio.
The company said the investment in potash, which is used to
make fertiliser, would provide "increased leverage to key global
mega-trends including rising population, changing diets, decarbonisation and
improving environmental stewardship".
BHP also announced US$17 billion in underlying profits in
the 12 months to June 30, up 88 percent from the previous year, on the back of
high iron ore and copper prices.
Shareholders will receive a record final dividend of US$2 a
share, the company said in its annual earning report.
Comments
Post a Comment