Woodside and BHP have confirmed the merger of the company’s oil and gas portfolios and in doing so, signed off on phase one of the Scarborough gas project offshore Western Australia.
Acquiring the entire share capital of BHP Petroleum International, Woodside will issue new shares to be distributed to BHP shareholders.
The expanded Woodside will be 52 per cent-owned by its existing shareholders and 48 per cent by existing BHP shareholders.
The merger is expected to create a global top 10 independent energy company in terms of production and forms the largest energy company listed on the ASX.
Woodside chief executive officer Meg O’Neill said the merger would assist the organisations in their low-emission transition.
“The combination will deliver the increased scale, diversity and resilience to better navigate the energy transition,” she said.
“We will have the balance sheet, cash flow and financial strength to help fund planned developments in the near-term, invest in future energy opportunities and return value to our shareholders through the cycle.
“Our emissions reduction targets will apply to the combined portfolio, supporting our aspiration to be net-zero by 2050 and our strategy to supply lower-carbon energy to our customers across the globe.”
BHP chief executive officer Mike Henry said consolidating the companies’ assets would make for a more streamlined operation.
“Merging our petroleum business with Woodside creates a large, more resilient company, better able to navigate the energy transition and grow value while doing so,” he said.
“Through the merger we will provide value and choice for BHP shareholders and unlock synergies in how these assets are managed.”
With the merger confirmed, Woodside and BHP have signed off on phase one of the $US12 billion ($16.5 billion) Scarborough upstream project in the North Carnarvon Basin.
The Scarborough field will comprise 13 subsea walls, a semi-submersible floating production unit and a 430-kilometre subsea export pipeline connected to the Woodside-operated Pluto liquefied natural gas (LNG) facility in Karratha, WA.
Field development will be completed in two phases, with eight wells drilled in phase one.
Woodside and BHP will aim to produce eight million tonnes of LNG per annum from the facility, with first cargo expected in 2026.