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Resources merger will accelerate $16B offshore project

Woodside Energy workers
Woodside Energy workers

A multinational mining company and Australian oil and gas producer will join forces to fast-track a US$12 billion (A$16B) development.

BHP Group and Woodside Petroleum have agreed to merge their oil and gas operations. The binding share sale will create a “global top 10” independent energy company by production and the largest energy company currently listed on the Australian stock market.

“Merging our petroleum business with Woodside creates a large, more resilient company [that is] better able to navigate the energy transition and grow value while doing so,” BHP CEO Mike Henry said in a public statement. “Through the merger we will provide value and choice … and [also] unlock synergies in how these assets are managed.”

The deal is expected to reach financial close during the second quarter of calendar 2022. A smooth transition of ownership is expected to take place shortly.

BHP separately approved investing US$1.B (A$2.07B) in accelerating the Scarborough Upstream Project in the North Carnarvon Basin. BHP already owns 26.5 per cent of the development’s first phase, while Woodside holds the remaining 73.5 per cent stake and operates the project.

The project involves establishing a US$5.7B (A$7.9B) offshore gas field with associated pipeline infrastructure. It also requires a US$6.3B (A$8.7B) new Pluto LNG Train.

“The project will have a peak construction workforce of over 3000 and 600 operational jobs, including 230 jobs in the heart of Pilbara at Karratha with the first LNG cargo is expected in 2026,” Federal Resources and Water Minister Keith Pitt said in a public statement.

“This is a major vote of confidence in the sector and … despite the claims and protestations of activists there continues to be a bright future for our gas and oil industries.”

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