JavaScript is disabled in your web browser or browser is too old to support JavaScript. Today almost all web pages contain JavaScript, a scripting programming language that runs on visitor's web browser. It makes web pages functional for specific purposes and if disabled for some reason, the content or the functionality of the web page can be limited or unavailable.

Thursday, March 20, 2025

BHP merges with Australian company

by

Curtis Williams
1310 days ago
20210817
BHP Headquarters, Invaders Bay.

BHP Headquarters, Invaders Bay.

Cur­tis Williams

cur­tis.williams@guardian.co.tt

In a ma­jor move that could have im­pli­ca­tions for T&T, Aus­tralian out­fits Wood­side Pe­tro­le­um Ltd (“Wood­side”) and BHP Group (“BHP”) have en­tered in­to a merg­er that will com­bine their re­spec­tive oil and gas port­fo­lios by an all-stock merg­er to cre­ate a glob­al top 10 in­de­pen­dent en­er­gy com­pa­ny by pro­duc­tion.

BHP has be­come a ma­jor play­er in T&T's oil and gas in­dus­try with it be­ing the op­er­a­tor in T&T's largest deep-wa­ter ex­plo­ration cam­paign.

BHP is al­so the on­ly com­pa­ny to have made a ma­jor oil dis­cov­ery in the last 20 years in T&T when it found the An­gos­tu­ra field and An­gos­tu­ra play in shal­low wa­ters off To­co.

In a me­dia re­lease the two Aus­tralian out­fits said up­on com­ple­tion of the trans­ac­tion, BHP’s oil and gas busi­ness would merge with Wood­side, and Wood­side would is­sue new shares to be dis­trib­uted to BHP share­hold­ers.

The ex­pand­ed Wood­side would be owned 52 per cent by ex­ist­ing Wood­side share­hold­ers and 48 per cent by ex­ist­ing BHP share­hold­ers. The Trans­ac­tion is sub­ject to con­fir­ma­to­ry due dili­gence, ne­go­ti­a­tion and ex­e­cu­tion of full form trans­ac­tion doc­u­ments, and sat­is­fac­tion of con­di­tions prece­dent in­clud­ing share­hold­er, reg­u­la­to­ry and oth­er ap­provals.

With the com­bi­na­tion of two as­set port­fo­lios, the pro­posed merg­er would cre­ate the largest en­er­gy com­pa­ny list­ed on the Aus­tralian Stock Ex­change (ASX), with a glob­al top 10 po­si­tion in the LNG in­dus­try by pro­duc­tion.

"The com­bined com­pa­ny will have a high mar­gin oil port­fo­lio, long life LNG as­sets and the fi­nan­cial re­silience to help sup­ply the en­er­gy need­ed for glob­al growth and de­vel­op­ment over the en­er­gy tran­si­tion" the re­lease not­ed.

Ac­cord­ing to the com­pa­nies the com­bi­na­tion of Wood­side and BHP’s oil and gas busi­ness is ex­pect­ed to de­liv­er sub­stan­tial val­ue cre­ation for both sets of share­hold­ers from across a range of ar­eas, in­clud­ing greater scale and di­ver­si­ty of ge­o­gra­phies, prod­ucts and end mar­kets through an at­trac­tive and long-life con­ven­tion­al port­fo­lio. Re­silient, high mar­gin op­er­at­ing cash flows to fund share­hold­er re­turns and busi­ness evo­lu­tion to sup­port the en­er­gy tran­si­tion.

Re­ports are that the move was made as BHP was un­der pres­sure to re­duce its car­bon foot­print by share­hold­ers con­cerned by glob­al warm­ing.

It is an­oth­er sign that oil and gas com­pa­nies are be­ing forced to move away from hy­dro­car­bons and shows that T&T's main source of for­eign ex­change re­mains un­der sig­nif­i­cant threat.

BHP is al­so cru­cial to T&T's nat­ur­al gas pro­duc­tion with its deep-wa­ter dis­cov­er­ies, Ca­lyp­so, and Le Clerc cru­cial to this coun­try's nat­ur­al gas pro­duc­tion post 2025.

The Aus­tralian com­pa­nies said they had shared val­ues and a fo­cus on sus­tain­able op­er­a­tions, car­bon man­age­ment and ESG lead­er­ship

"Es­ti­mat­ed syn­er­gies of more than US$400 mil­lion (100 per cent ba­sis, pre-tax) per an­num from op­ti­mis­ing cor­po­rate process­es and sys­tems, lever­ag­ing com­bined ca­pa­bil­i­ties and im­prov­ing cap­i­tal ef­fi­cien­cy on fu­ture growth projects and ex­plo­ration." the re­lease read.

Wood­side CEO and Man­ag­ing Di­rec­tor Meg O’Neill said, “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.

The proven ca­pa­bil­i­ties of both Wood­side and BHP will de­liv­er long-term val­ue for share­hold­ers through our ge­o­graph­i­cal­ly di­verse and bal­anced port­fo­lio of tier 1 op­er­at­ing as­sets and low-cost and low-car­bon growth op­por­tu­ni­ties."

BHP CEO Mike Hen­ry added, “The merg­er of our pe­tro­le­um as­sets with Wood­side will cre­ate an or­gan­i­sa­tion with the scale, ca­pa­bil­i­ty and ex­per­tise to meet glob­al de­mand for key oil and gas re­sources the world will need over the en­er­gy tran­si­tion."

On a pro­for­ma ba­sis, the com­bined busi­ness will con­sist of:

High qual­i­ty con­ven­tion­al as­set base pro­duc­ing around 200 MM­boe (FY21 net pro­duc­tion)

Di­ver­si­fied pro­duc­tion mix of 46% LNG, 29% oil and con­den­sate and 25% do­mes­tic gas and liq­uids (FY21 net pro­duc­tion)

Wide ge­o­graph­ic reach with pro­duc­tion from West­ern Aus­tralia, east coast Aus­tralia, US Gulf of Mex­i­co, and Trinidad and To­ba­go with ap­prox­i­mate­ly 94% of pro­duc­tion (FY21 net pro­duc­tion) from OECD na­tions

2P re­serves of over 2 bil­lion boe com­pris­ing 59% gas, and 41% liq­uids.

Re­silient op­er­at­ing cash flows to fund share­hold­er re­turns and busi­ness evo­lu­tion to sup­port the en­er­gy tran­si­tion

Longer term em­bed­ded op­tions in­clude the Wildling (US), Tri­on (Mex­i­co), Ca­lyp­so (Trinidad and To­ba­go) and Browse (Aus­tralia) projects.


Related articles

Sponsored

Weather

PORT OF SPAIN WEATHER

Sponsored