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

China Rolls Out 17MW Floating Wind Turbine Prototype

China Rolls Out 17MW Floating Wind Turbine Prototype

SBM Offshore’s Jaguar FPSO Enters Drydock in Singapore (Video)

SBM Offshore’s Jaguar FPSO Enters Drydock in Singapore (Video)

EnQuest Picks Up Offshore Oil and Gas Block in Brunei

EnQuest Picks Up Offshore Oil and Gas Block in Brunei

CNOOC Finds Oil and Gas in South China Sea

CNOOC Finds Oil and Gas in South China Sea

Valeura Makes Progress with Multi-Well Drilling Campaign in Gulf of Thailand

Valeura Makes Progress with Multi-Well Drilling Campaign in Gulf of Thailand

CNOOC Starts Production at Offshore Field in South China Sea

CNOOC Starts Production at Offshore Field in South China Sea

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

OMV Exits Ghasha Gas Project off UAE with Lukoil Stake Sale

OMV Exits Ghasha Gas Project off UAE with Lukoil Stake Sale

Indonesia's Medco Starts Production at Natuna Sea Fields

CNOOC Puts Into Production New Oil Field in South China Sea

Current News

Pandion Energy Divests Interests in Three Norwegian Assets to Inpex

China Starts Production at Major Oil Field in Bohai Sea

Dutch Contractor Completes Malaysia’s Largest 'Rig-to-Reef' Decom Project

China Rolls Out 17MW Floating Wind Turbine Prototype

SBM Offshore’s Jaguar FPSO Enters Drydock in Singapore (Video)

EnQuest Picks Up Offshore Oil and Gas Block in Brunei

CNOOC Finds Oil and Gas in South China Sea

Seatrium Makes First Turnkey FPSO Delivery to Petrobras

KBR-SOCAR Joint Venture Secures Work for BP in Azerbaijan

Baker Hughes, Petronas Team Up for Asia-Pacific Energy Resilience

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