BP buys BHP's US onshore oil and gas assets
July 27, 2018
BHP has sold its US onshore oil and gas assets to British oil giant BP for $10.5 billion (€9.03 billion), the two companies announced on Friday, meaning a huge loss for the world's largest mining company.
The Anglo-Australian firm spent $20 billion in 2011 to acquire the assets, but the sector later experienced a fall in prices, hammering profits. As a result, BHP had announced last year that it would withdraw from the shale sector.
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"We are pleased that we have agreed to sell all of our shale assets in two simple transactions that provide certainty for shareholders and our employees," said BHP chief executive Andrew Mackenzie.
"The sale of our onshore US assets is consistent with our long-term plan to continue to simplify and strengthen our portfolio to generate shareholder value and returns for decades to come."
'World class' business
With its net debt currently towards the lower end of its target range of $10-15 billion, the money raised is set to be returned to shareholders, either through dividends or share buybacks. Shares in the miner rose by over 2 percent on Friday following the announcement of the sale for more than analysts had expected.
The move follows a push last year by New York-based Elliott Advisors, a significant shareholder in the company, for BHP to restructure the business, including spinning off its US oil and gas operations.
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Meanwhile, BHP's sale was BP's biggest purchase in almost 20 years, and gives the British company access to major oil regions in New Mexico and Texas.
Despite the shale operations proving to be a poor investment for BHP, BP chief executive Bob Dudley called the businesses "world class" with rising oil prices boasting their prospects. "This is a transformational acquisition...a major step in delivering our upstream strategy and a world-class addition to BP's distinctive portfolio," he said in a statement.
sri/aos (AFP, dpa)