BHP plotting oil and gas exit with Woodside Petroleum merger talks

BHP is engaging in talks with Australia’s Woodside Petroleum over a potential merger of its US$13 billion-valued petroleum business.

The potential transaction between BHP and Woodside would mark the world’s biggest mining group’s exit from the oil and gas industry, as it faces growing shareholder pressure to reduce carbon emissions in line with the goals of the Paris climate agreement.

BHP said on Monday that a merger with Woodside was one of a number of options being considered as part of a strategic review of its petroleum business.

It added that any agreement to combine its oil and gas assets in Australia, North America and Africa with Woodside could result in a distribution of the Perth-based energy group’s shares to BHP shareholders.

“While discussions between the parties are currently progressing, no agreement has been reached on any such transaction,” said BHP. “A further announcement will be made as and when appropriate.”

London and Sydney-listed BHP has also put its last remaining thermal coal mine up for sale as it looks to focus on greener commodities under chief executive Mike Henry. About 12% of the company’s revenues are currently generated by fossil fuels.