BP En Route to Acquire BHP US Oil and Gas Assets

After allegedly putting down a bid of over US$10 billion on Friday (July 6), BP (LSE:BP, NYSE:BP) is the front-runner to buy BHP Billiton’s (ASX:BHP, LSE:BLT, NYSE:BBL) US onshore shale oil and gas assets, according to Reuters.

While the exact terms of BP’s offer are still unknown, sources close to the situation said a deal could be reached in coming weeks, though also adding that an agreement isn’t certain. According to the report, other big-name oil competitors in the BHP bidding war include Chevron (NYSE:CVX) and Royal Dutch Shell (NYSE:RDS.A).

In August 2017, BHP announced it was looking to sell its oil and gas assets, which entail its Eagle Ford, Permian, Haynesville and Fayetteville basins. Elliott Management, a major hedge fund, had urged the company to sell the assets in light of declining natural gas prices.

The Permian, Eagle Ford and Haynesville basins were previously three of the US’ most productive oil and gas fields. In 2011, BHP acquired the previous owner of these basins, Petrohawk Energy, in a US$12 billion deal, gaining the assets in the process.

BP has been struggling to stay on top of the US shale competition for quite some time, following the Deepwater Horizon oil-spill disaster in 2010. The incident, which took place in the Gulf of Mexico, has left the company paying billions of dollars in damages and restitution since it happened.

Stocks in BHP grew 2.14 percent to AU$33.86 by the end of trading on the ASX on Monday (July 9). Meanwhile, as of 1:30 p.m. EST, BP was down 0.50 percent to GBX 576.22 on the LSE.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.