The Anglo-Australian mining giant Bhp has announced the merger of its oil and natural gas operations with the Australian group Woodside. The transaction, worth several billion, marks Bhp’s withdrawal from the liquid fossil fuel industry while Woodside becomes one of the world’s 10 largest producers of liquefied natural gas. The merger was carried out on paper against paper: Woodside will issue new shares to Bhp shareholders and following the agreement, its current shareholders will hold 52% of the new entity resulting from the merger, while the shareholders of the Anglo-Australian group will have 48%.
Bhp Petroleum’s business, with assets in the Gulf of Mexico, Australia and the Caribbean island state of Trinidad and Tobago, is worth $ 15.4 billion; to diversify its portfolio, Bhp will invest $ 5.7 billion in the development of the Jansen potash mine in Canada.
“The merger of our oil operations with Woodside will create an organization with the scale, capacity and experience to meet the global demand for key oil and gas resources the world will need during the energy transition” , Bhp CEO Mike Henry points out in a note.
The group also gave the green light to a $ 5.7 billion investment in the Jansen Stage 1 potash project in Canada. “This is an important milestone for Bhp and an investment in a new commodity that we believe will create shareholder value for generations,” noted Henry. It is expected to produce 4.35 million tons of potassium per year starting in 2027.
In closing fiscal year 2021, the group announced a record dividend of $ 2 per share, bringing total shareholder returns to more than $ 15 billion for the year. . “Our 2021 results testify to the hard work and commitment of our staff throughout Bhp”, notes CEO Henry, indicating that “operational performance and capital discipline, together with high commodity prices, have supported our strong financial results. ” “This allowed us to make a total economic contribution of $ 40.9 billion for the year which includes investments in the community, payments to local suppliers and taxes, royalties and payments to governments,” he concludes.