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New UserBHP Billiton unveils demerger plans, to focus on iron ore, copper, coal, oil
20 Aug 2014
Anglo-Australian resources giant BHP Billiton announced plansTuesday, August 19,to demerge its business by creating an independent global metals and mining company based on a selection of its high-quality aluminum, coal, manganese, nickel and silver assets.
Once simplified, BHP Billiton will be almost exclusively focused on its exceptionally large, long-life iron ore, copper, coal, petroleum and potash basins, the company said.
Separating these businesses via a demerger has the potential to unlock shareholder value by significantly simplifying the BHP Billiton Group and creating two portfolios of complementary assets, it said.
With fewer assets and a greater upstream focus, the group will be able to reduce costs and more rapidly improve the productivity of its largest businesses.
Petroleum will concentrate on its high-quality assets in the US and Australia, including operated facilities such as Pyrenees and Macedon in Western Australia, Shenzi in the deepwater Gulf of Mexico and Angostura offshore Trinidad, as well as shale resources in the US, the company said.
BHP Billiton also retains its non-operated interests in Atlantis and Mad Dog in the Gulf of Mexico, and Bass Strait and the North West Shelf offshore Australia, while pursuing other high-value exploration and development opportunities, it added.
A final board decision on the demerger will be made after the company receives key government, tax, regulatory and other third-party approvals.
Once those approvals are in place, shareholders will be able to vote on the proposed demerger, the company said, adding that it expects the demerger to be completed in the first half of the 2015 calendar year.
BHP Billiton is Australia's biggest petroleum producer, posting better-than-expected output of 246 million barrels of oil equivalent in the year ended June 30, up 4% year on year, on the back of a 73% increase in liquids output from its onshore US shale operations.
The company has forecast its petroleum production would rise 5% to 255 million boe in the year to June 30, 2015, with high-margin liquids volumes expected to increase by 16 million boe.
Petroleum capital expenditure of around $5.6 billion is planned in the 2015 financial year, it said. The company posted a net profit of $13.83 billion for the full year, up 23.2% year on year. Revenue in the year came in at $67.21 billion, up 1.9% year on year.
Source: Platts