BHP which is a UK- Australian resources firm is in talks for merger of its oil and gas business with Woodside Petroleum an Australian Oil major. With most of BHP’s Oil and Gas assets mainly located in Gulf of Mexico and Australia, the firm has already given way to the potential for the company to merge with Woodside. The move comes amid BHP looking to reduce its green house gas emissions and to make its assets align with less Carbon Dioxide intensive sectors.
BHP said in a statement recently that the company had initiated a strategic review of the company’s petroleum business into order to do a reassessment of its position and long-term strategy. The company also said that one option was to merge with Woodside.
If the deal gets completed, it will create Australia’s biggest upstream producer with a total capacity of 550,000 b/d.
The talks come at a time when Crude Oil prices are taking a hit due to declining demand because of the delta variant of the Coronavirus. Various countries including China have initiated lockdown measures which have created various logistical constraints regarding Oil imports.
As per ChemAnalyst, “If the deal moves forward, it will surely help both the companies as it would be easier to face demand decline with the synergy arising out of the merger.”