Stock markets have been calling for consolidation in the oil industry, only not for the companies they own. On Tuesday, Australia’s Woodside agreed to buy the petroleum assets of compatriot mining company BHP in return for shares. The deal illustrates the contradictions of the massive and ongoing restructuring of the global upstream oil and gas business.
Woodside’s shares are down 11 per cent and BHP’s down 17 per cent since then, and that is not all due to the slump in oil and metals prices. The poor reaction of the market comes despite the strategic logic of the deal for both parties.
BHP’s exit from oil has long been on the cards. BP bought its US shale assets in October 2018. Investors wanted a clearer story focused on its world-leading metals business, led by iron ore today but transitioning into commodities required for new energy systems and growing populations – copper, nickel and a new mine for the fertiliser ingredient potash in Canada.
Increasingly carbon-averse financiers prefer to avoid putting their money into petroleum. BHP is also trying to sell its thermal coal portfolio, although it will retain metallurgical coal, used for steelmaking.
BHP shareholders, who will hold about 48 per cent of the enlarged Woodside, can sell down over time if they wish.
BHP’s share price was hit by one idiosyncratic factor – plans to end its UK dual listing and retain only the Sydney listing. Analysts also felt it gave up the oil assets relatively cheaply. Although BHP could have sold piecemeal, Woodside is probably the only company that was interested in the whole package.
The Perth-based company will become a top-ten global independent oil and gas producer. Excluding the major integrated oil companies, it is already the world’s third-biggest exporter of liquefied natural gas, the fastest-growing form of fossil fuel, and will acquire a further one-sixth stake in the flagship North-West Shelf project in Western Australia from BHP.
The cash flow from the BHP assets will help underpin major investments, particularly the Scarborough LNG project in Western Australia, with a budget now raised to $12 billion. BHP, with 25 per cent, already partners Woodside in Scarborough.
LNG prices in Asia have reached record highs this year. Strong demand growth in China and a dearth of recent new production projects means the market is expected to stay tight to at least 2023.
But that does not mean Woodside is seen to have got a bargain. The deal muddies its story. It was a company clearly focused on LNG and Australia, with its only major international project a significant offshore oilfield development in Senegal. It now picks up mature gasfields in Australia’s Bass Strait, with sizeable liabilities for decommissioning, along with admittedly high-quality oilfields in the US Gulf of Mexico and a scattering of other assets in Trinidad and Algeria.
Investors may be nervous about the hefty expenditure planned on Scarborough. Newly appointed Woodside chief executive Meg O’Neill has a strong operational background, much-needed as Australian LNG projects have an inglorious history of massive cost overruns. But, in general, shareholders have appreciated zero-premium combinations that bring synergies and cost savings.
This is the second recent big transaction in the Australian petroleum industry. At the beginning of August, Oil Search and Santos agreed to merge, creating what was briefly the biggest Australian oil company and one of the world’s top 20 listed petroleum businesses. Again, both are strong in LNG, in Australia and Papua New Guinea.
This pattern is somewhat similar to that of the Canadian oil patch. Foreign companies have exited and sold their assets to domestic companies, which have themselves combined – most recently, Cenovus with Husky Energy in January to form the country’s third-biggest producer. The major international companies are shy of continuing involvement in Alberta’s high-carbon oil sands.
The process so far resembles shuffling fossil fuel assets into “bad banks”, which nevertheless can remain highly profitable. Meanwhile, European oil companies such as Shell and Total have tried to shed higher-carbon and high-cost fields, and steadily boosted reinvestment into renewables and other more climate-friendly projects such as electric vehicle charging, hydrogen and carbon capture.
They need buyers for their unloved legacy oil and gasfields. The bloodbath in the mid-cap exploration and production stocks over the past decade and the reduced appetite of and for Chinese purchasers has made this difficult.
While the majors have leaned heavily on private equity-backed vehicles such as Harbour Energy and Neptune Energy, which have made a splash in the North Sea, they may welcome the emergence of counterparties such as Woodside.
The truth is that whatever investors’ opinion of them, existing oil and gasfields at current prices yield excellent cash flows. There is also appetite for new LNG, if produced with minimised greenhouse gas emissions.
The political balance in major western fossil-fuel exporting countries – Australia, Canada, the US and Norway – still remains broadly supportive of extraction. Its effect on jobs in key constituencies and government budgets is too big to close it down. So, there will be buyers for assets, if not at the prices the current owners hope for.
Despite the tepid market reaction, the strategic and climate logic of the Woodside-BHP deal is clear for them. Under current pressures, it is not clear what either company could realistically do much differently.
A newly greenwashed miner and a profitable petroleum “bad bank” are typical offspring of the confused transition in fossil fuel investment.
Robin Mills is chief executive of Qamar Energy and author of The Myth of the Oil Crisis
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
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UAE currency: the story behind the money in your pockets
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
KILLING OF QASSEM SULEIMANI
Mohammed bin Zayed Majlis
Mohammed bin Zayed Majlis
COMPANY PROFILE
Name: Lamsa
Founder: Badr Ward
Launched: 2014
Employees: 60
Based: Abu Dhabi
Sector: EdTech
Funding to date: $15 million
FIXTURES
New Zealand v France, second Test
Saturday, 12.35pm (UAE)
Auckland, New Zealand
South Africa v Wales
Sunday, 12.40am (UAE), San Juan, Argentina
EPL's youngest
- Ethan Nwaneri (Arsenal)
15 years, 181 days old
- Max Dowman (Arsenal)
15 years, 235 days old
- Jeremy Monga (Leicester)
15 years, 271 days old
- Harvey Elliott (Fulham)
16 years, 30 days old
- Matthew Briggs (Fulham)
16 years, 68 days old
The years Ramadan fell in May
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Race 3
Produced: Salman Khan Films and Tips Films
Director: Remo D’Souza
Cast: Salman Khan, Anil Kapoor, Jacqueline Fernandez, Bobby Deol, Daisy Shah, Saqib Salem
Rating: 2.5 stars
Zayed Sustainability Prize
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Killing of Qassem Suleimani
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The five pillars of Islam
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UAE currency: the story behind the money in your pockets
Zayed Sustainability Prize
If you go:
Getting there:
Flying to Guyana requires first reaching New York with either Emirates or Etihad, then connecting with JetBlue or Caribbean Air at JFK airport. Prices start from around Dh7,000.
Getting around:
Wildlife Worldwide offers a range of Guyana itineraries, such as its small group tour, the 15-day ‘Ultimate Guyana Nature Experience’ which features Georgetown, the Iwokrama Rainforest (one of the world’s four remaining pristine tropical rainforests left in the world), the Amerindian village of Surama and the Rupununi Savannah, known for its giant anteaters and river otters; wildlifeworldwide.com
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Killing of Qassem Suleimani
The years Ramadan fell in May
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The BIO
Favourite piece of music: Verdi’s Requiem. It’s awe-inspiring.
Biggest inspiration: My father, as I grew up in a house where music was constantly played on a wind-up gramophone. I had amazing music teachers in primary and secondary school who inspired me to take my music further. They encouraged me to take up music as a profession and I follow in their footsteps, encouraging others to do the same.
Favourite book: Ian McEwan’s Atonement – the ending alone knocked me for six.
Favourite holiday destination: Italy - music and opera is so much part of the life there. I love it.
Results:
2.15pm: Handicap (PA) Dh60,000 1,200m.
Winner: AZ Dhabyan, Adam McLean (jockey), Saleha Al Ghurair (trainer).
2.45pm: Maiden (PA) Dh60,000 1,200m.
Winner: Ashton Tourettes, Sam Hitchcott, Ibrahim Aseel.
3.15pm: Conditions (PA) Dh60,000 2,000m.
Winner: Hareer Al Reef, Gerald Avranche, Abdallah Al Hammadi.
3.45pm: Maiden (PA) Dh60,000 1,700m.
Winner: Kenz Al Reef, Gerald Avranche, Abdallah Al Hammadi.
4.15pm: Sheikh Ahmed bin Rashid Al Maktoum Cup (TB) Dh 200,000 1,700m.
Winner: Mystique Moon, Sam Hitchcott, Doug Watson.
4.45pm: The Crown Prince Of Sharjah Cup Prestige (PA) Dh200,000 1,200m.
Winner: ES Ajeeb, Sam Hitchcott, Ibrahim Aseel.
War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
Titanium Escrow profile
Started: December 2016
Founder: Ibrahim Kamalmaz
Based: UAE
Sector: Finance / legal
Size: 3 employees, pre-revenue
Stage: Early stage
Investors: Founder's friends and Family
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Killing of Qassem Suleimani
Mohammed bin Zayed Majlis
Mohammed bin Zayed Majlis
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
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Profile Periscope Media
Founder: Smeetha Ghosh, one co-founder (anonymous)
Launch year: 2020
Employees: four – plans to add another 10 by July 2021
Financing stage: $250,000 bootstrap funding, approaching VC firms this year
Investors: Co-founders
Killing of Qassem Suleimani
Zayed Sustainability Prize
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
The specs
Engine: 3.9-litre twin-turbo V8
Power: 620hp from 5,750-7,500rpm
Torque: 760Nm from 3,000-5,750rpm
Transmission: Eight-speed dual-clutch auto
On sale: Now
Price: From Dh1.05 million ($286,000)
Profile box
Company name: baraka
Started: July 2020
Founders: Feras Jalbout and Kunal Taneja
Based: Dubai and Bahrain
Sector: FinTech
Initial investment: $150,000
Current staff: 12
Stage: Pre-seed capital raising of $1 million
Investors: Class 5 Global, FJ Labs, IMO Ventures, The Community Fund, VentureSouq, Fox Ventures, Dr Abdulla Elyas (private investment)
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
