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03/9/2021
08:22 | la forge: WATODAY.COM
BHP workers returning to offshore oil rig after Hurricane Ida
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By Nick Toscano
September 3, 2021 — 1.01pm
Australian mining giant BHP has started flying staff back out to its Shenzi offshore platform in the United States’ Gulf of Mexico after the deadly Hurricane Ida tore through the oilfields and forced a days-long evacuation.
Oil producers including BHP, Shell, Exxon and Chevron have been assessing the damage left by Ida’s ferocious 240-kilometre-an-hour winds, which knocked out more than 90 per cent of the Gulf of Mexico’s oil and gas production.
Gulf of Mexico oil and gas producers are assessing the damage left by Hurricane Ida and returning staff to platforms.
BHP said its initial assessments had identified no damage to its Shenzi platform, and it had started running the first flights back to the offshore operations.
However, a spokeswoman said it was too soon to say when oil production would resume.
“As far as production restart, timing is still to be determined, and contingent on midstream/downstream factors,” she said.
Ida made landfall on August 29 at Port Fourchon, where BHP’s shorebase was located. Storms caused extensive damage to the port that services about 90 per cent of the Gulf of Mexico’s deepwater oil and natural gas wells.
BHP said it had temporarily relocated its base from Port Fourchon to Galveston and was in the process of setting up operations there.
The remnants of Hurricane Ida have hammered the US east coast with tornado damage, rain and surging rivers. The flooding has killed at least 46 people in their homes and cars.
Benchmark crude oil prices rallied ahead of the hurricane as oil well shut-ins across the gulf curtailed supply. However, prices have since been under pressure amid analyst concerns that power outages and flooding at Louisiana’s oil refineries could lead to a slower restart and a longer slump in demand.
Commonwealth Bank commodities analyst Vivek Dhar said markets were leaning towards a quicker recovery in US oil production than US refining activity.
“That bodes negatively for oil prices,” he said.
In the US, BHP operates the Shenzi field and has non-operating interests in the Atlantis and Mad Dog fields.
The company last month announced it would exit oil and gas entirely, with a landmark deal to sell its global petroleum division to Australia’s top producer Woodside, partly to free up its ability to spend more on “future-facing” commodities such as copper and nickel that will be increasingly needed to make electric batteries and clean-energy infrastructure.
As global warming concerns drive the investment community further away from carbon-intensive fossil fuels, BHP chief executive Mike Henry noted that the Woodside deal would also give BHP shareholders the choice to “manage their own decisions” about whether they wanted to retain or remove their exposure to oil.
“Bringing the BHP and Woodside assets together will provide choice for BHP shareholders, unlock synergies in how these assets are managed and allow capital to be deployed to the highest-quality opportunities,”; Mr Henry said.
The combined entity would be owned 52 per cent by Woodside shareholders and 48 per cent by BHP shareholders. The tie-up will be put to Woodside shareholders for a vote in the June half of 2022.
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20/8/2021
07:43 | loganair: "Woodside is one of the worst-performing companies within the energy sector globally post-COVID; the company doesn't yet have a strong mandate to enter a deal of such questionable value and this could further drag on Woodside's shares," said Jamie Hannah, deputy head of investments at Van Eck Australia, a shareholder in both companies.
It raised concerns about the strategic sense of expanding in oil and taking on ageing gas assets with big decommissioning costs.
Analysts and two BHP investors said Woodside got the BHP assets relatively cheaply.
"I'd much rather have just hung on to them and harvested the capital because demonstrably the returns from the growth parts of those projects are much higher than Jansen," said a Sydney-based fund manager, referring to the $5.7 billion Jansen potash project BHP approved on Tuesday.
Tribeca Investment Partners CEO Ben Cleary, a BHP shareholder, said what BHP lost with the discount on its petroleum assets would be offset by a higher valuation multiple for no longer holding oil and gas.
"Long term the deal makes sense. I think BHP looks more attractive for a wider audience," said Matt Haupt, portfolio manager at Wilson Asset Management, a BHP shareholder.
Analysts were upbeat about the long term for Woodside, saying the deal would give it more growth options, beyond its $12 billion Scarborough gas project and Pluto LNG expansion, funded by strong cash generation at BHP's debt-free assets.
"It's a logical deal between the parties," said Argo Investments portfolio manager Andy Forster. "I do think ultimately shareholders will vote for it."
Credit Suisse analyst Saul Kavonic said Woodside shareholders may be painted into a corner, noting that, as part of the deal, Woodside gave BHP an option to hand over its stake in the Scarborough project for $1 billion if Woodside makes a final investment decision on the project by 15 Dec.
Woodside would then be the sole owner of Scarborough and have to fund the project by itself, which it cannot afford.
"Shareholders may have little choice but to vote the merger through because otherwise it would pose a serious balance sheet overhang," Kavonic said.
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19/8/2021
14:58 | florenceorbis: BHP to merge petroleum assets with Woodside in $29bn deal
Oil & GasUpstreamOffshore
By NS Energy Staff Writer 18 Aug 2021
Upon closing of the merger, Woodside’s shareholders will own a 52% stake in the enlarged oil and gas company, which will have production assets in Australian waters, the US Gulf of Mexico, offshore Trinidad and Tobago, and Senegal
210817_AURORA_Tile
BHP and Woodside to merge their respective oil and gas businesses. (Credit: BHP)
BHP Group has signed a merger commitment deed with Woodside Petroleum to combine its oil and gas business with the latter to create a A$41bn ($29.8bn) energy company.
A sales and purchase agreement (SPA) in this regard is expected to be signed by the parties in October 2021.
The consideration will involve the distribution of Woodside’s shares to BHP. Post-merger, Woodside’s shareholders will have a stake of 52% in the enlarged company, while BHP’s shareholders will own the remaining 48% stake.
The combination is expected to create one of the top 10 energy companies in the world on the basis of production volumes.
The enlarged firm will have nearly 200 million barrels of oil equivalent (MMboe) production in 2021. Of this, 46% will be liquefied natural gas (LNG), 29% will be oil and condensate, and 25% will be domestic gas and liquids.
Its 2P reserves will be 2,023MMboe, while the 2C resources will be 8,356MMboe.
The enlarged entity will have production assets in Australian waters, the US Gulf of Mexico, offshore Trinidad and Tobago, and Senegal.
BHP has been reportedly planning an exit from oil and gas operations as part of its efforts to shift away from fossil fuels.
BHP CEO Mike Henry said: “The merger of our petroleum assets with Woodside will create an organisation with the scale, capability and expertise to meet global demand for key oil and gas resources the world will need over the energy transition.
“Bringing the BHP and Woodside assets together will provide choice for BHP shareholders, unlock synergies in how these assets are managed and allow capital to be deployed to the highest quality opportunities.
“The merger will also enable the skills, talent and technology of both organisations to build a resilient future as the world’s needs evolve.”
As part of their deal, Woodside and BHP have come up with a plan to target final investment decision (FID) for the Scarborough project in Australia by the year-end.
In this connection, BHP will have an option to sell its stake of 26.5% in the Scarborough joint venture (JV) to Woodside.
The company also agreed to divest its 50% stake in the Thebe and Jupiter joint ventures to Woodside, subject to the Scarborough JV reaching an FID by 15 December 2021.
Should the deals take place, then BHP will be entitled to a payment of $1bn and a contingent amount of $100m, which will be subject to an FID taken on the Thebe development in the future. The option is exercisable by the company in the second half of next year.
Woodside CEO and managing director Meg O’Neill said: “Merging Woodside with BHP’s oil and gas business delivers a stronger balance sheet, increased cash flow and enduring financial strength to fund planned developments in the near term and new energy sources into the future.
“The proven capabilities of both Woodside and BHP will deliver long-term value for shareholders through our geographically diverse and balanced portfolio of tier 1 operating assets and low-cost and low-carbon growth opportunities.”;
The merger, which is expected to be closed in Q2 2022, will be subject to confirmatory due diligence, negotiation and signing of transaction documents, and shareholder, regulatory, and other preceding conditions.
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18/8/2021
16:51 | arja: loganair ,
It is not what I saw as shown hereunder . a bit long - sorry .
It was a series of announcements from BHP on Tuesday with a lot of naughts and a historic, company-changing restructure that will see a long-term boost to the value of the company’s share price.
BHP will pay shareholders a $US2 a share final dividend, sell its oil and gas business to Woodside, start the huge Jansen potash project in Canada as a replacement and end dual listing of the company in London and bring the vastly changed company back under its Australian listing.
The company will sell its oil and gas business to Woodside in a $US17 billion deal (see separate story on that deal and the Jansen go-ahead).
The final dividend is more than three times the 65 cents a share paid for 2019-20 and shareholders can thank booming iron ore and copper prices for that boost, along with an assist from its about to be sold oil and gas business.
The record final dividend takes BHP’s returns to shareholder to more than $US15 billion for the full year to June 30 – that more than $A20 billion.
BHP reported a profit from operations for the year of a record $US25.9 billion, up 80% and underling earnings before interest, tax, depreciation and amortisation of $US37.4 billion.
That was a record gross profit margin of 64% on total revenues for the year of $US60.817 billion.
The attributable profit of $US11.3 billion was not an accurate indication of the bottom line for the company. That’s because that figure includes an exceptional loss of $US5.8 billion predominantly related to the impairments of the potash and energy coal assets, and the current year impact of the Samarco dam failure).
Underlying attributable profit for the year was $US17.1 billion, up 88% from the Covid hit 2019-20 year (especially the June, 2020 half year).
In yesterday’s statement the company said its strategy is to deliver long-term value and returns through the cycle.
“We aim to do this through owning a portfolio of world class assets with exposure to highly attractive commodities which benefit from the mega-trends playing out in the world around us, by operating them exceptionally well, by maintaining a disciplined approach to capital allocation and through being industry leaders in sustainability and the creation of social value.
“As the world continues to evolve, BHP is positioning itself to benefit from the mega-trends and through sustainability leadership,” the company said in the statement.
Besides the Woodside deal, the Jansen go ahead, the higher profit and record dividend, the ending of the dual listing with London is a major development.
BHP says the move will “unify our corporate structure under BHP’s existing Australian parent company to realise simplification and enhanced strategic flexibility benefits.”
That will end 20 years as a dual listed company (along with Rio Tinto). The structure was put in place when BHP merged with the London-based South African focused Billiton.
Shareholders in the Plc company listed in London will be taken onto the Australian register and their shares will be quoted here in Australian dollars. They will get Australian shares on a one for one basis.
Many UK institutions won’t like that because of the currency changes – the London shares are quoted in sterling. London holders will whine in moan through the likes of the Financial Times, and other UK media.
The company had net debt at of just $US4.1 billion, compared to $US12.0 billion at June 2020.
“In light of our announcement to pursue a merger of our Petroleum business with Woodside, we will be reviewing our net debt target and will provide an update with our interim results for the 2022 financial year in February 2022,” BHP said.
Some analysts took t
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16/8/2021
07:53 | loganair: BHP Holding Talks With Woodside on Deal to Exit Oil and Gas:
Plans by BHP to exit oil and gas come as global energy supermajors grapple with pressure from investors and governments over climate action, in some cases by shrinking core production and adding renewable energy assets. BHP, the world’s biggest mining company, generates the bulk of its profits from iron ore and copper.
Though BHP has said it expects oil and gas demand to remain strong for at least another decade, and recently announced $800 million of investments in growth options, the company is wary of becoming stuck with assets that’ll become more difficult to exit as the world attempts to curb consumption of fossil fuels.
BHP sold the majority of its shale unit to BP in 2018 for about $10.5 billion, and is advancing plans to exit its final thermal coal mine and some metallurgical coal operations. Those divestments would leave the company with only a handful of fossil fuels assets, a collection of mines in Queensland that supply coal to steelmakers.
Last month, Bloomberg News reported BHP was considering plans to quit oil and gas and that the business was estimated to be worth $15 billion or more. Woodside and BHP are in advanced talks over a deal worth about A$20 billion ($14.7 billion), the Australian Financial Review reported on Sunday, citing people familiar with the matter.
The world's biggest miner also said it had begun a strategic review of its oil and gas business — made up of assets in Australia, the Gulf of Mexico, Trinidad and Tobago, and Algeria - that analysts value at between $10 billion and $17 billion.
Analysts at Bernstein have estimated that the BHP division could be valued at around 13 billion US dollars (£9.4 billion).
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27/7/2021
09:11 | waldron: BHP seals nickel supply deal with Tesla for EV batteries
MiningNickel
By Andrew Fawthrop 22 Jul 2021
Tesla will receive supplies from BHP's Nickel West operation in Western Australia, with the pair further agreeing to improve supply chain sustainability
BHP Nickel West 2
BHP's Nickel West operation in Kalgoorlie, Western Australia (Credit: BHP)
BHP has agreed to supply nickel products to US car manufacturer Tesla from its Nickel West facility in Western Australia.
Tesla requires nickel for the batteries used in its electric vehicles (EVs), and owner Elon Musk has previously called on miners to produce more of the metal amid rising demand, and to do so in a sustainable way.
“Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally-sensitive way,” Musk said on an earnings call last year.
BHP said in addition to the supply agreement the pair will “collaborate on ways to make the battery supply chain more sustainable” – including a focus on raw material traceability using blockchain and reducing emissions across their respective operations through renewable energy paired with battery storage.
The terms of the deal between BHP and Tesla were not disclosed, but analysts at Benchmark Mineral Intelligence estimate the contract to be worth up to 18,000 tonnes of nickel annually, starting in 2022.
BHP’s chief commercial officer Vandita Pant said: “Demand for nickel in batteries is estimated to grow by over 500% over the next decade, in large part to support the world’s rising demand for electric vehicles.
“We are delighted to sign this agreement with Tesla, and to collaborate with them on ways to make the battery supply chain more sustainable through our shared focus on technology and innovation.”
Tesla seeking alternative sources of nickel amid surging demand
As electrification spurs demand for critical minerals around the world, there is growing concern about the strength of Chinese influence over supply chains.
This is the case in Indonesia, the world’s top nickel-producing region, where there are further concerns about the emissions associated with mineral extraction.
The US government recently introduced new policies to strengthen domestic supply chains for critical minerals used in batteries, like nickel and lithium, as it seeks to reduce its reliance on overseas imports and circumvent China’s influence in the market.
California-based Tesla is also seeking to secure non-Chinese-controlled sources for its battery ingredients, and has reportedly agreed two other supply arrangements – with Vale and Prony Resources – for the nickel that will be used in its batteries.
Production at BHP’s Nickel West project is among the “lowest-carbon-intensity nickel in the world”, according to Edgar Basto, the company’s president for Australia minerals.
He added: “The investments we have made in our assets and our pursuit of commodities like nickel will help support global decarbonisation and position us to generate long-term value for our business.”
BHP had considered selling Nickel West just a few years ago, but has since positioned the facility as a supplier to global battery manufacturers. It is nearing completion of a nickel sulphate plant at the Kwinana refinery which will have an annual production capacity of around 100,000 tonnes.
NSENERGY
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22/7/2021
13:21 | kipper999: BHP dividend to jump 150% predicts broker
Dividends will be the focus in BHP PLC’s (LON:BHP) annual result statement on 16 August, with broker Berenberg expecting a bumper payout from the mining titan.
Recent production numbers were in line with estimates, said the broker, as were the forecasts for next year.
Berenberg believes BHP has significant capacity to pay excess dividends, given strong FCF generation thanks to high commodity prices.
It has estimated a dividend payment of US$3.05 (US$1.20), or 94% of underlying earnings, to give a yield of about 10% at 2,2406p.
“We believe this is achievable given our forecast US$4.5bn reduction in net debt over FY21 to US$7.5bn, which remains well below the US$12- 17bn guidance range.”
One other thing to watch for is an investment decision for potash project Jansen, which the company has said is on track for a go or no-go decision within the next two months.
But with 2,700p target is Berenberg’s view.
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21/7/2021
08:06 | ariane: THE MOTELY FOOL AUSTRALIA
BHP (ASX:BHP) share price climbing as miner considers selling oil assets
Many industry experts now believe peak oil may be reached sooner than expected.
Bernd Struben❯
Published July 21, 11:13am AEST
The BHP Group Ltd (ASX: BHP) share price is climbing, up 2% in morning trade.
BHP’s share price gain comes as the wider S&P/ASX 200 Index (ASX: XJO) is also climbing strongly, up more than 1%.
But the company may be getting an added lift after news broke that it’s reportedly considering pulling the plug on its oil and gas ventures.
Amongst the largest companies on the ASX 200, the mining and resource giant has been pumping oil and gas from the ground for more than 50 years.
But with rising environmental, social and corporate governance (ESG) concerns among global investors and the long-term outlook for oil demand cloudy, BHP may be ready to turn off the crude taps…for a price.
Why BHP may sell its oil and gas assets
These days, the profits from BHP’s petroleum segment only account for about 6% of its total profits, according to RBC Capital Markets’ forecast.
Iron ore makes up the lion’s share of profits, some 72%. Copper makes up most of the rest at 21%, with coal providing a slender 1% of profits.
Quoting people familiar with the matter who asked not to be identified, Bloomberg reports, “The world’s biggest miner is reviewing its petroleum business and considering options including a trade sale… BHP wants to exit while it can still get a good price for the assets, aiming to repeat a 2018 sale of its shale business to BP Plc for $10.4 billion”.
The petroleum segement is expected to earn more than US$2 billion (AU$2.7 billion) this year.
According to RBC Capital Markets analyst Tyler Broda (quoted by Bloomberg):
BHP is an outlier in the mining sector for its petroleum business and this is often cited in our investors discussions as a point of detraction. With rising ESG pressures facing the industry, but also as this business potentially enters into a re-investment phase, we can see why management might be contemplating an exit.
Broda values BHP’s petroleum business at some US$14.3 billion.
Peak oil may be here sooner than expected
BHP may be getting on the front foot with its reported petroleum asset sale plans.
A new reported from BloombergNEF, its energy data and analysis firm, states that, “Demand for gasoline and diesel to fuel cars and trucks will peak in 2027 – four years earlier than expected – as more fuel-efficient autos and increasing adoption of electric vehicles curb global consumption.”
According to the report:
Policy makers are driving the automotive market toward low-carbon options and improved fuel efficiency. Automakers and large fleet operators are also, in turn, aiming for long-term decarbonization. Fuel producers with exposure to markets like the US or Europe are poised to see sales of diesel and gasoline decline significantly from current levels over the next decade.
If oil demand is close to peaking, then BHP’s share price may benefit longer term from the company’s reported plans to get out of the oil and gas game.
BHP share price snap shot
Over the past 12 months BHP’s share price is up 29%, outpacing the 19% gains posted by the ASX 200 over that same time.
Year-to-date the BHP share price has gained 18%.
BHP pays a 4.1% dividend yield, fully franked.
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09/7/2021
09:00 | loganair: Broker Berenberg has upgraded mining giant BHP (BHP) as despite impending volatility, strong free cashflow should drive bumper dividends.
Analyst Richard Hatch upgraded his recommendation from ‘hold’ to ‘buy’ and increased the target price from £22 to £27 on the stock, which closed down 1.5%, or 34p, at £21.68 on Thursday on a difficult day for the FTSE 100.
Hatch predicted a ‘fairly volatile summer for mining equities’ due to a slowdown in Chinese steel production that could hit iron ore demand. However, he said iron ore prices ‘remain fairly tight’.
‘BHP has near-term dividend momentum, with iron ore offering the potential to surprise to the upside,’ he said.
‘This underpins a c.12% dividend yield for both financial year 2021 and 2022, with scope for more returns as strong free cashflow moves net debt below the target range.’
He added that BHP is lower risk than peer Anglo American (AAL) and ‘for investors seeking a high-quality yield play…we believe that BHP has attractive near and medium-term momentum’
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03/2/2021
14:35 | gibbs1: nsenergy
BHP signs renewable power purchase agreement to reduce emissions from nickel refinery
MiningPowerNickel
By James Murray 02 Feb 2021
The world’s biggest miner said the PPA will supply up to 50% of the electricity needs for its Nickel West Kwinana Refinery's in Western Australia
BHP nickel refinery
The agreement, which will last 10 years, will help BHP reduce emissions from electricity use at the refinery by up to 50% by 2024 (Credit: BHP)
BHP has signed a renewable power purchase agreement (PPA) to reduce emissions from its Nickel West Kwinana Refinery in Western Australia.
The world’s biggest miner said the PPA will supply up to 50% of the refinery’s electricity needs from Risen Energy’s 132-megawatt (MW) Merredin Solar Farm – the largest of its kind in Western Australia.
The agreement, which will last 10 years, will help BHP reduce emissions from electricity use at the refinery by up to 50% by 2024 and effectively displace an estimated 364,000 tonnes of CO2 over the life of the contract.
Nickel refinery PPA is first renewable energy PPA signed by BHP in Western Australia
This is the first renewable energy PPA signed by BHP in Western Australia and follows similar agreements covering its operations in Queensland in 2020 and in Chile in 2019.
BHP Nickel West asset president Eddy Haegel said: “This contract will further increase the sustainability of the nickel produced by Nickel West. It will reduce the refinery’s electricity emissions by 50 per cent, diversify our energy supply, and reduce the refinery’s electricity bill.
“Nickel is a future-facing commodity that is essential to creating the high performing lithium-ion batteries used in battery electric vehicles (BEV). Consequently, the demand for nickel and especially the nickel produced by Nickel West is set to grow dramatically.”
Haegel claims the sustainable production of nickel is also “essential to meet this future demand” as the customers purchasing BEVs “want to know that the inputs to the manufacturing of these vehicles are also sustainable”.
“Nickel West is already one of the most sustainable nickel producers in the world but has committed to significantly reduce CO2 emissions further,” he added.
“This contract, combined with our high-quality nickel deposits, and our integrated value chain further improves our position as one of the lowest carbon nickel miners in the world.”
Renewable PPA to contribute to BHP’s 2030 emissions target
BHP said the PPA will also contribute to its medium-term, science-based target to reduce scope 1 and 2 emissions by 30% by 2030.
The miner made the announcement in September last year following increased pressure on fossil fuel companies to operate in a more sustainable, environmentally-friendly manner.
Reacting to BHP’s PPA agreement with Risen Energy, Bill Johnston, Western Australian minister for mines, petroleum and energy, said: “Congratulations to everyone at BHP Nickel West for taking this important step forward to reduce their operation’s carbon footprint.
“BHP’s Kwinana nickel refinery is a key contributor to Western Australia’s future battery industry and is helping global efforts to decarbonise.
“The McGowan government is supportive of mining and resources companies that embrace clean energy solutions.”
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