BHP, a major resource company, recently announced a new plan for portfolio review and organizational restructuring against the backdrop of strong performance. The reorganization plan announced by the company is as follows. (Photo is an image. Quoted from the official website of BHP)
BHP has set economic growth and decarbonization as pillars of its restructuring. Therefore, the entire company has shown its willingness to work as one to create further value by producing the commodities that the world demands.
As a concrete initiative, Canada's Jansen Stage 1 related project has approved an investment of US $ 5.7 billion in the project. The plan is to produce 4.35 million tonnes of potash annually, with initial production targeting 2027 and increasing production over two years. Janssen Stage 1 is expected to be one of the most sustainable potash mines in the world at low cost, with a low carbon footprint and low water consumption.
It will create 3,500 jobs at the peak of Janssen Stage 1 construction, 600 jobs for ongoing operations, and provide opportunities for locals and indigenous peoples. From the beginning, Janssen's employees balance the gender ratio, with 20% of the team being indigenous. BHP has signed "(business) opportunity contracts" with six indigenous communities around the site, which is said to be the first in the potash industry.
Meanwhile, BHP has proposed merging its oil assets with Woodside to launch a global independent energy company, which includes the world's leading oil and gas region from the North West Shelf to the Gulf of Mexico.
BHP’ CEO Mike Henry commented, "The merger of BHP's oil business with Woodside will create an independent energy company that is among the top 10 companies in the world, which will unleash synergies and increase the value of BHP's shareholders and more options. An integrated business will be more resilient and will continue to provide value through the energy transition. " BHP shareholders own a 48% stake in the joint venture.
High returns from a series of brownfield and undeveloped area projects in some of the world's best oil and gas basins will allow the merged new company to enjoy growth opportunities. This includes BHP's recent commitment of over US $ 800 million to develop the Shenzi North project and keep the Trion project going. Regulatory and other approvals are required to establish the merger, which is expected to be completed in the second quarter of 2022.
BHP is currently a dual-listed company with two parent companies, both of which are listed (BHP Group Limited in Australia and BHP Group in the United Kingdom). BHP has adopted a single corporate structure under BHP Ltd and is proposing a primary listing on the Australian Stock Exchange (ASX). Under a unified corporate structure, BHP Ltd's stock will be listed on the Australian, London and Johannesburg stock exchanges and will be treated as an American Depositary Receipt (ADR) program on the New York Stock Exchange.
After the final approval by the board of directors, BHP shareholders are scheduled to vote on unification at the shareholders' meeting scheduled for the first half of 2022.
Jiro Arihara
Global Commodity Watcher
