BP Swooping In On BHP Shale Assets

By Glenn Dyer | More Articles by Glenn Dyer

According to weekend media reports BHP is on the verge of getting rid of its costly US shale gas and oil headache with global major, BP emerging as the front runner to buy the unwanted assets in one go.

According to reports from Bloomberg and Reuters BP will pay just over $US10 billion, or more than $US13 billion for BHP Billiton’s onshore oil and gas operations in the US.

A deal hasn’t been finalised and it could be weeks before an agreement is reached, the person said. According to Reuters, BP has offered to pay more than $US10 billion ($A13.45 billion).

BHP will be under pressure to make a statement to the ASX today to clarify progress on the sale which local analysts expected would be revealed with the 2017-18 financial results in August.

BHP releases its 4th quarter and full production and sales data next week on July 18 and that could be an opportunity to spell out details.

BHP received initial offers about two months ago from BP, Chevron and Royal Dutch Shell, among others companies, according to the reports at the weekend.

BHP announced plans to sell the business about a year ago under pressure from activist investor Elliott Management.

The assets up for sale include about 800,000 net acres in four US shale basins, including the Permian Basin in Texas, now one of the most productive oilfields in the world.

Bloomberg says BP is among the few oil majors that lack a substantial presence in the Permian, where Exxon Mobil and others have aggressively expanded through acquisitions.

The US move has cost the company dearly – around $A20 billion in asset impairments over the last few years, especially from mid 2014 when oil prices plunged.

BHP shares rose 0.8% on Friday to $A33.15, but were down 2.2% over the week.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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