Although BHP chief executive Mike Henry has previously flagged the company intended to retain and potentially expand its oil and gas interests to meet the world’s ongoing energy needs,the company is said to be reassessing its options,while analysts say it makes sense that BHP may be contemplating an exit.
“BHP’s commitment to its petroleum division remains increasingly unclear to us,” Credit Suisse analyst Saul Kavonic said. “We think it is ripe for either divestment or a thorough revamp.”
Some of BHP’s biggest oil and gas interests in Australia include its stake in the North West Shelf project off the coast of WA,its 50 per cent holding in ExxonMobil’s oil and gas fields in Bass Strait,and a 25 per cent interest in Woodside’s Scarborough project off WA.
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Woodside,the nation’s largest independent oil and gas company,would be the top candidate to buy BHP’s Australian division,Mr Kavonic said,adding that he believes the division could fetch a price tag of between $US3 billion ($4.1 billion) to $US4 billion ($5.4 billion).
Woodside’s bidding position may be at an advantage due to its asset knowledge and pre-emptive rights concerning two WA joint-venture partnerships with BHP,and a limited buyer pool following a regulatory crackdown to ensure new asset owners are able to meet significant offshore decommissioning liabilities.
Morgan Stanley said BHP’s global petroleum division,which also spanned the US Gulf of Mexico,was forecast to earn more than $US2 billion this year,and could be worth more than $US15 billion.