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Shell, Blackstone consider joint bid for BHP’s US shale assets: Sky News
Posted on Monday, 12 March 2018 12:52
Royal Dutch Shell and private equity giant Blackstone are eyeing a USD 10.00 billion bid for BHP Billiton’s US shale assets, banking sources told Sky News.

According to the people with inside knowledge, the two have agreed to work together on an offer, which is only one of several proposals the UK-based miner is expecting to receive for the operations.

BHP decided to explore a sale of its US shale operations, located close to assets controlled by Shell and Anadarko Petroleum in the Permian Basin of west Texas and New Mexico, after coming under pressure from an activist investor, Sky News observed.

Hedge fund Elliott Management has called for a disposal of the assets in a bid to free up capital, recent media reports suggested, adding the company is expecting initial bids to be tabled by the end of June.

Last week, Reuters reported that BHP’s president of petroleum operations, Steve Pastor, noted the group would consider swapping certain onshore oil and gas operations with other offshore units as it looks to exit the US shale market.

If Shell and Blackstone’s proposed offer is successful, it would be the Anglo-Dutch oil giant’s largest since its GBP 35.00 billion takeover of BG Group in early 2016.

BHP has already indicated that, if a sales process fails to meet sufficient value, it will consider a stock market listing for the division as an alternative.

The report follows a Bloomberg article which cites Shell as suggesting oil is not going anywhere and there will be “at least one home still welcoming fossil fuels in the face of a growing threat from cleaner resources”.

BHP has over 60,000 employees and primarily operates in Australia and the US.

In the six months to 31st December 2017, the company generated underlying earnings before interest, taxes, depreciation and amortisation of USD 11.24 billion, a 14.0 per cent increase on USD 9.90 billion in the corresponding period of 2016.

According to Zephyr, the M&A database published by Bureau van Dijk, there have been 2,434 deals announced in the crude petroleum and natural gas extraction sector worldwide since the start of 2016.

Among the largest of these targets were India’s Reliance Industries, US-based Energy Transfer Partners and Oneok Partners and Canada’s ConocoPhillips's Western Canadian deep basin gas assets and Foster Creek Christina Lake partnership interest.

© Zephus Ltd