Perth-based energy giant Woodside has confirmed it is in discussions with Australian miner BHP, with the two companies assessing a potential merger estimated to be worth $20 billion.
Following months of market speculation, BHP said it was considering the future of its global petroleum division, which comprises oil and gas assets across Australia, the Americas and North Africa. One option, the company said, was a potential merger of the petroleum business with Woodside Energy and a distribution of Woodside shares to BHP shareholders.
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“Woodside notes recent speculation regarding a potential transaction between Woodside and BHP Petroleum,” the company said in a statement on Monday.
“Woodside continuously reviews the composition of its asset portfolio and opportunities to create and deliver value for shareholders.
“Woodside is engaged in discussions with BHP regarding a potential merger involving BHP’s entire petroleum business through a distribution of Woodside shares to BHP shareholders.
“These discussions are ongoing. Woodside will continue to update the market in accordance with its continuous disclosure obligations.
The Sydney Morning Herald said industry insiders were anticipating a deal with Woodside to be made public within days when the two companies face investors to report their full-year profit results.
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“A deal with Woodside would mark the most significant shake-up in years for BHP, the world’s biggest mining company, whose portfolio is dominated by iron ore, copper and metallurgical coal,” the report stated.
“If BHP chooses to sell its petroleum business, it would also mark a major acceleration of chief executive Mike Henry’s retreat from planet-heating fossil fuels as he pursues plans to divest its last thermal coal mine and increase exposure to so-called ‘future-facing’ commodities copper and nickel that will be increasingly required to power the clean energy age.”
