BHP at Risk of Credit Rating Downgrade on Oil Business Sale

Melanie Burton
Tuesday, August 24, 2021
Credit: BHP

BHP Group is at risk of a two-notch downgrade that would provoke its lowest ever credit rating as the sale of its petroleum business raises the miner's dependence on its major business of iron ore, S&P Global said on Tuesday.

BHP has agreed to hive off its petroleum business to Woodside Petroleum Ltd in a nil-premium merger, in return for new Woodside shares which will go to BHP shareholders, who will own 48% of the enlarged group.

The sale will reduce BHP's portfolio diversity and will raise its dependency on a single asset, the agency noted.

S&P Global said it was placing 'A' long- and 'A-1' short-term ratings on BHP, as well as the 'A' issue rating on the group's senior unsecured notes on CreditWatch with negative implications.

That means BHP's rating could fall to BBB+, which would be its lowest since it was first rated in 1995.

 "The CreditWatch placement indicates that we could lower our ratings on BHP by up to two notches in the coming months, based on our updated review of the strength of the group's business risk profile, if the divestment of its petroleum assets takes place as proposed," it said in a note. 

(Reporting by Melanie Burton; Editing by Krishna Chandra Eluri and Jacqueline Wong)

Categories: Energy Mergers & Acquisitions Activity Production Australia/NZ

Related Stories

Brownfield Output Decline Accelerates, says IEA

Brownfield Output Decline Accelerates, says IEA

Hanwha Ocean Enlists ABB for Singapore’s First Floating LNG Terminal

Hanwha Ocean Enlists ABB for Singapore’s First Floating LNG Terminal

Aquaterra Energy Nets Subsea Analysis Contracts with INPEX off Indonesia

Aquaterra Energy Nets Subsea Analysis Contracts with INPEX off Indonesia

DOF Secures Moorings Hook-Up Job in Asia Pacific

DOF Secures Moorings Hook-Up Job in Asia Pacific

Saipem Wins FEED Contract For Abadi LNG Project FPSO Module In Indonesia

Saipem Wins FEED Contract For Abadi LNG Project FPSO Module In Indonesia

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

Pandion Energy Divests Interests in Three Norwegian Assets to Inpex

Pandion Energy Divests Interests in Three Norwegian Assets to Inpex

Santos and QatarEnergy Agree Mid-Term LNG Supply

Santos and QatarEnergy Agree Mid-Term LNG Supply

CNOOC Starts Production at Offshore Field in South China Sea

CNOOC Starts Production at Offshore Field in South China Sea

OMV Exits Ghasha Gas Project off UAE with Lukoil Stake Sale

Current News

Yinson Production Nets DNV Approval for New FPSO Hull Design

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Petronas to Leverage AI to Expedite Oil and Gas Exploration Activities

Brownfield Output Decline Accelerates, says IEA

PV Drilling Takes Ownership of Noble Corporation’s Stacked Jack-Up Rig

Hanwha Ocean Enlists ABB for Singapore’s First Floating LNG Terminal

Aquaterra Energy Nets Subsea Analysis Contracts with INPEX off Indonesia

POSH Set to Tow Nguya FLNG from China to Eni’s Congo Field

Chinese Contractor Secures Offshore Oil and Gas ‘Mega Deal’ from QatarEnergy

DOF Secures Moorings Hook-Up Job in Asia Pacific

photo

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com