The world’s largest mining company leaves the oil and gas business behind
BHP Group announced its plans to sell the oil and gas business in what could be regarded as the largest deal in the industry this year. The company has begun talks over a possible merger with Australia’s Woodside as part of a strategic review of its petroleum business, and analysts already estimate the deal could be worth at least $15 billion. Moreover, the shift from petroleum could be a positive move from an environmental, social and governance perspective and accelerate its transition towards copper, nickel, and potash. Upon the possible deal, BHP shareholders would receive Woodside stock.
The company’s decision comes during a time when mining companies face pressure to reduce their exposure to fossil fuels and align with the goals of the Paris Climate Agreement. Also, BHP put its last remaining thermal coal mine up for sale, as it looks to focus on greener commodities. Approximately 12% of the company’s revenues are from fossil fuels.
BHP is due to announce annual results today and is set to approve spending between $5.3 billion - $5.7 billion to bring a Canadian potash mine into production.
Upon the possible all-stock deal talks, GHP Group stock price jumped more than 9%.
Sources: cnbc.com, ft.com
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