BHP nears oil, gas exit over climate scrutiny

BHP nears oil, gas exit over climate scrutiny

Bloomberg

BHP Group is in talks over a potential merger of its oil and gas unit with Woodside Petroleum Ltd to accelerate a retreat from fossil fuels amid increasing pressure to curb emissions. Options being discussed include a distribution of Woodside shares to BHP holders to allow the Australian energy firm to add operations spanning Australia to the Gulf of Mexico, the companies said in separate statements. BHP’s unit could be valued at more than $15 billion, a person familiar with the details said last month.

The petroleum division “simply no longer fits within BHP’s portfolio or future-facing strategy,” said Saul Kavonic, an analyst at Credit Suisse Group AG. Having missed opportunities to sell thermal coal assets at higher prices, “BHP should know it’s better to exit petroleum sooner rather than later,” he said. BHP, which generates the bulk of profits from iron ore and copper, is reviewing its portfolio as energy supermajors grapple with global pressure from investors and governments over climate action, in some cases by shrinking core production and adding renewable energy assets. Chief Executive Officer Mike Henry has already signaled plans to focus the world’s biggest miner on materials tied to renewable energy and electrification. Woodside declined as