Woodside investors approve merger with BHP upstream arm

Shareholders in Australian independent Woodside Petroleum have approved a merger with the petroleum arm of Australian resources firm BHP to create Australia's largest oil and gas producer.

The A$41bn ($28.7bn) all-share transaction is expected to be completed on 1 June. More than 98pc of the proxy and direct votes were in favour of Woodside merging with BHP's oil and gas operations to create a producer with an output of around 550,000 b/d of oil equivalent (boe/d).

BHP shareholders will receive Woodside shares rather than cash and existing Woodside shareholders will own 52pc of the enlarged company. BHP shareholders will own the remaining 48pc. BHP will focus on mining activities in iron ore, coking coal, copper, nickel and potash once the merger is complete.

Woodside earlier this week received its last outstanding regulatory condition for the merger when the National Offshore Petroleum Titles Administrator (Nopta) approved the merger. Nopta is Australia's regulator responsible for issuing exploration and upstream development permits for offshore areas overseen by the federal government.

When the merger was first unveiled in August, Woodside said the combined production of the merged company will be 46pc LNG, 29pc oil and condensate and 25pc domestic gas and liquids.

Production assets will combine interests in three LNG projects offshore Western Australia (WA), domestic gas in eastern Australia and oil projects in the US Gulf of Mexico, and Trinidad and Tobago. More than 59pc of the combined proven and probable reserves will be natural gas and 41pc liquids.

Woodside and BHP are also partners in the 16.3mn t/yr North West Shelf (NWS) LNG venture offshore WA, the country's biggest LNG plant, where they each own a 16.6pc stake. They are also partners in the 13 trillion ft³ (368bn m³) greater Scarborough fields in the Carnarvon basin offshore WA, which will provide feedstock gas for a second 5mn t/yr train at the 4.3mn t/yr Pluto LNG venture offshore and backfill for the NWS LNG project.

One of the first decisions of the enlarged group is a final investment decision on Mexico's deepwater Trion oil field from mid-2022, aiming to first complete studies under the current front-end engineering and design planning stage.

Woodside shareholders also voted on several other issues at the firm's annual meeting, with 48.97pc of shareholders voting against Woodside's climate plan.

"We acknowledge that the energy transition is a complex and ongoing process," Woodside chairman Richard Goyder said. "Our shareholders' views are important to us and will continue to inform our approach as it evolves."

By Kevin Morrison