Woodside in merger talks for BHP’s global petroleum portfolio

Woodside Petroleum Ltd., Perth, has confirmed it is in discussions with BHP Group Ltd. regarding a potential merger involving BHP’s entire petroleum business through a distribution of Woodside shares to BHP shareholders.

Such a merger would result in BHP exiting liquid fossil fuels altogether while Woodside would gain a major foothold in the Americas (including the Gulf of Mexico and Trinidad/Tobago) as well as expand its extensive portfolio of petroleum assets off Western Australia where BHP has significant interests on the North West Shelf. Woodside also would gain a 50% interest in Bass Strait fields.

Analysts suggest that BHP’s petroleum portfolio could be worth about $13 billion (Aus.). They point out that petroleum no longer fits easily within BHP’s portfolio and that the miner has been under a lot of pressure to reduce its exposure to fossil fuels to align with goals of the Paris climate agreement. It has already exited from thermal coal.

BHP said that a merger with Woodside is one of a number of options the company is considering as part of a strategic review of its petroleum assets.

Both companies said that discussions between them were progressing, but that no agreement has been reached on any transaction. They added that a further announcement would be made ‘when appropriate’.