What’s Going on with BHP Group?
Today, August 16, BHP Group (BHP), headquartered in Melbourne, Australia, issued a brief response to press speculation concerning the global mining company’s petroleum business. The recent speculation is centered around whether or not the firm might sell its $15 billion-valued petroleum business. As of 09:50 am EDT today, BHP stock was trading at $75.26 a share, representing a 3.29% decline in value.
What Does This Mean for BHP?
“BHP confirms that we have initiated a strategic review of our Petroleum business to re-assess its position and long-term strategic fit in the BHP portfolio. A number of options are being evaluated,” according to BHP’s official response to the speculation.
The resources company, which is the planet’s largest mining firm, is in discussions with Australia’s Woodside Petroleum regarding the acquisition of BHP’s petroleum business. Other options as far as potential buyers go also appear to be on the table, or possibly in the works. If BHP offloads its petroleum business, it would then be able to focus more on its mining business.
While discussions between BHP and Woodside Petroleum “are currently progressing, no agreement has been reached on any such transaction.” The distribution of Woodside shares to BHP shareholders is one possibility if a merger of BHP’s petroleum business with Woodside Petroleum eventually does go through.
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BHP is a leading global diversified miner supplying iron ore, copper, oil, gas, and metallurgical. A 2001 dual-listed merger of BHP Limited (now BHP Ltd.) and Billiton PLC (now BHP PLC) created the present-day BHP. Shareholders in each company have equivalent economic and voting rights in BHP as a whole. Major assets include Pilbara iron ore, Queensland coking coal, Escondida copper and conventional petroleum assets, principally in Australia and the Gulf of Mexico. Onshore U.S. oil and gas assets were sold in 2018.
