Australian LNG firm Woodside is in talks to buy oil and gas business from compatriot mining giant BHP.
“Woodside is engaged in discussions with BHP regarding a potential merger involving
BHP’s entire petroleum business through a distribution of Woodside shares to BHP shareholder,” the firm said on Monday.
The confirmation follows several media reports about a possible deal between the two firms as BHP looks to exit the oil and gas business.
However, Woodside said the talks were ongoing and it would “continue to update the market .”
One of the options
In a separate statement, BHP said it “regularly reviews its portfolio of assets in order to seek opportunities to maximise long-term shareholder value.”
“BHP confirms that we have initiated a strategic review of our petroleum business to re-assess its position and long-term strategic fit in the BHP portfolio,” the firm said.
Moreover, BHP said one of the options includes a potential merger of the petroleum business with Woodside and a distribution of Woodside shares to BHP shareholders.
“We confirm that we have been in discussions with Woodside. While discussions between the parties are currently progressing, no agreement has been reached on any such transaction,” BHP said.
LNG assests
BHP has owned oil and gas assets since the 1960s. The firm has conventional assets located in the US Gulf of Mexico, Australia, Trinidad and Tobago, and Algeria.
In addition, BHP has appraisal and exploration options in Mexico, Trinidad and Tobago, Western Gulf of Mexico, Eastern Canada and Barbados, according to its website.
Also, the firm has a stake in Woodside’s Scarborough project and the Nort West Shelf LNG project.
According to Reuters, analysts value BHP’s oil and gas business at between $10 billion and $17 billion.