Beginning of The End of Fossil-Fuel Era - World’s 2nd Largest Mining Company Cutting Ties with the Oil and Gas Sector

One of the BHP's  Petroleum Sites

BHP, a world-leading resources company that extract and process minerals, oil & gas, has announced that it is considering selling its petroleum business in order to cut ties with the oil and gas sector. This move from the company is result of its shareholders' pressure for reducing its carbon footprint.

Australia-based BHP is the World's second largest mining companies, in terms of revenue (in US billion dollars) as ranked by Statista in 2021. 

Last year in September, BHP pledged to slash its overall carbon emissions by 30% over the next decade and achieve net zero by 2050. As a result, shareholders have reportedly been pressuring the company to reduce their involvement in the hydrocarbon sector (natural gas, oil, and coal) in favour of renewable energy.

On an average, BHP produces approximately 300,000 barrels of oil equivalent (boe) per day from its operated and non-operated assets around the world, according to the company's fact sheet.

In 2020, the group also said it planned to sell its stake in two coking coal mines. This would reduce the size of its coal operation, bringing the company closer to achieving the Paris climate targets.

On 17 August, BHP said that it is entering into a merger deal with Woodside Petroleum, its biggest rival. By selling its fossil fuel division, BHP would be losing out on over US$ 12.9 billion (approx). As part of this merger plan, Woodside and BHP have agreed an option for BHP to sell its 26.5% interest in the Scarborough Joint Venture to Woodside and its 50% interest in the Thebe and Jupiter joint ventures to Woodside if the Scarborough Joint Venture takes a final investment decision FID by 15 December 2021.

With the combination of two high quality asset portfolios of Woodside and BHP -- , the proposed merger would create the largest energy company listed on Australia's primary securities exchange - ASX, with a global top 10 position in the LNG industry by production.

BHP’s underlying profit rose by 42% to $17.08 billion 2021. Despite this they are considering selling their petroleum business.

Further to this, global rating agency S&P Global has warned BHP that the miner’s decision to sell its oil and gas business could threaten its credit rating, since it will leave the group even more reliant on iron ore.

Via - euronews.green

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