BHP Shale Asset Divesture

Commenting on BHP Billiton's plans to divest its U.S shale unit, Jon Weintraub, research analyst at Wood Mackenzie, said: "BHP's announced divesture of its onshore U.S. business is a pretty momentous step-change in its corporate strategy and marks the culmination of its push to be a major shale player.  We expect to see all options being considered with a substantial amount of interest from multiple pools of buyers." 

BHP has significant exposure to some of the most active plays in the US Lower 48 including the Permian, Eagle Ford and the Haynesville. "Private Equity firms, U.S. independents, Majors, NOCs will all want a seat at the table during negotiations," Weintraub added.

This announcement comes hot on the heals of AP Moller Maersk's exit from the E&P business through its sale of Maersk Oil to Total for US$7.5 billion and follows on from Freeport McMoRan's exit of its petroleum operations to Anadarko for US$2 billion in late 2016.

"We have also seen increasing signs that the conglomerate business model is fundamentally flawed," said Weintraub. "Investors are pushing companies to focus on core competencies and divest assets of marginal value."