Australia's Woodside, BHP sign off on oil, gas portfolio merger

Australia's Woodside and BHP have signed off on their plan to merge BHP's oil and gas portfolio with Woodside and final investment decisions have been made on the Scarborough and Pluto Train 2 developments, showed exchange filings Nov. 22.

The two companies signed Nov. 22 a binding share sale agreement for the merger, which will create a global top 10 independent energy company by production and the largest on the Australian Securities Exchange.

"The combination will deliver the increased scale, diversity and resilience to better navigate the energy transition," Woodside CEO Meg O'Neill said.

Completion of the deal is targeted for the second quarter of 2022.

BHP and Woodside also approved the development of the Scarborough upstream project in Western Australia, which is to supply gas to an expanded Pluto LNG project.

"Scarborough will be amongst the lowest carbon incremental sources of LNG to world markets," BHP CEO Mike Henry said.

Scarborough is estimated to contain 11.1 trillion cubic feet of dry gas. In turn, Woodside made a final investment decision on the 5 million mt/year Pluto LNG train 2 project.

Woodside said the all-in cost of supply for LNG delivered to north Asia will be about A$5.8/MMBtu.

Pluto Train 2 is targeted to load its first LNG cargo in 2026. The train would add to Woodside's existing 4.9 million mt/year Pluto train.