BHp-Woodside deal highlights energy transition choices

摘要

Australian independent Woodside Petroleum’s decision to merge with the petroleum arm of Australian-UK resources giant BHP refects the stark choices faced by commodities frms in the energy transition, and the accelerating pace of consolidation that investor pressure to prepare for that transition is driving. The deal will see BHP exit the upstream oil and gas sector after 58 years, ensuring that investors see the full value of booming transition demand for its iron ore and copper, while the frm refocuses investment on new growth prospects in the fertiliser market. This boom has recently pushed BHP’s share price to new highs, while Woodside’s remains well below pre-Covid levels (see chart). Lacking such diversifcation options, Woodside will double down on oil and gas through the all-share deal, which will create a frm worth around A$40bn ($29bn), with Woodside shareholders owning 52pc and BHP investors 48pc. The scale of the merged company will put it among the top 10 global upstream independents, with a balance sheet to fnance future projects aimed at cutting its carbon intensity on the way to meeting a long-term net zero Scope 1 and 2 emissions target.