BHP and Woodside have agreed to merge petroleum assets, creating a global energy giant and giving the miner an exit from fossil fuels.
Mining behemoth BHP has agreed to merge its petroleum assets with oil and gas giant Woodside, creating a global energy colossus.
The confirmation comes after weeks of speculation BHP was planning to get out of the petroleum business as part of an exit from fossil fuels.
It had already announced its retreat from thermal coal.
On Tuesday, as BHP released its full-year results, the companies confirmed their epic tie-up would go ahead, subject to shareholder, regulatory and other approvals.
If given the nod, it will create the biggest ASX-listed energy company with a global top 10 ranking in the LNG industry in terms of production volumes.
It would be owned 52 per cent by existing Woodside shareholders and 48 per cent by existing BHP investors.
Woodside said its enlarged version would have greater scale and diversity of geographies, products and end markets, and benefit from estimated cost “synergies” of more than $US400m ($A549m) per year.
A key plan is to make a final investment decision on Woodside’s long-awaited Scarborough project this calendar year, with the company’s chief executive Meg O’Neill saying the proposed merger de-risked the planned development.
BHP chief executive Mike Henry said the union would “provide choice for BHP shareholders” and bolster “the skills, talent and technology of both organisations to build a resilient future as the world’s needs evolve”.
Anticipating the announcement, environmentalists gathered outside BHP’s Perth headquarters to protest.
Anthony Collins, a campaigner with climate change activists 350 Perth, said the aim of the demonstration was to “show BHP that simply dumping their fossil fuel projects at the feet of Woodside is not going to cut it”.
“Rather than take responsibility for the highly polluting petroleum business sites BHP has built, this is a cynical attempt to simply walk away,” he said.
“Ultimately, Woodside is acting as BHP’s ‘useful idiot’; taking on a burden that BHP has decided is too toxic to touch.”
Originally published as BHP agrees to merge petroleum assets with Woodside, creating an epic energy company
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