BHP reshaping portfolio
Mining News Pro - Diversified giant BHP is adjusting its asset portfolio in order to take advantage of the changing market dynamics, CEO Mike Henry told investors at the company’s annual general meeting.
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“Global trends such as the electrification of transport, decarbonisation of power, population growth and rising standards of living are expected to drive demand for copper, nickel and potash - future facing commodities; even as growth in demand for iron-ore, metallurgical coal and oil and gas slows.

“And, we are actively managing our portfolio to protect and grow value. This includes creating more options in future facing commodities for long-term growth and tending to our current portfolio to maximise the value of our assets,” Henry said.

He added that through BHP’s rigorous approach to capital allocation, the company would create and secure more options through innovation, exploration, early stage entry and well-timed acquisitions of attractive resources and assets.

“We have already made some progress here, adding copper and nickel options to our portfolio earlier in the year, and we are progressing towards a final investment decision on our potash project in Canada next year.

“In terms of our existing portfolio, we recently announced steps to optimise our coal portfolio through focusing on high-quality hard coking coal and divesting our other coal operations.

“And, as part of our balanced approach to investing in petroleum, we recently grew our working interest in Shenzi but we also shared our intent to divest from more mature, later life assets, including our non-operated interest in the Bass Strait joint venture.”

BHP last week struck a 505-million membership interest purchase and sale agreement with Hess Corporation to acquire an additional 28% working interest in Shenzi, a six-lease development in the deepwater Gulf of Mexico.

The acquisition would bring BHP’s working interest to 72% and immediately add approximately 11 000 barrels of oil equivalent per day of production.

“As we shape our portfolio for the future, it is incredibly important that we deliver exceptional safety, operational and financial performance.

“In the face of market uncertainty and slowing rates of growth in commodity demand, a greater proportion of value growth will come from an unrelenting focus on being great at what we do,” Henry said on Wednesday.

“We remain committed to the capital discipline we have demonstrated in recent years and will further build upon our technical and operational capability.”