BHP Group is in talks to sell its global oil and gas business to Woodside Petroleum Ltd., the companies said on Aug. 16.

The sale of BHP’s oil and gas assets to Australia’s Woodside, which analysts say could fetch anywhere between $10 billion and $17 billion, would create a new international “super independent” with a long-term focus on LNG but exposure in the medium term to high-margin, deepwater oil, according to Wood Mackenzie research director Andrew Harwood.

“An exit from its petroleum business has been long rumored for BHP,” Harwood said in an emailed statement, “and as it faces rising pressure from the energy transition, it would seem that the mining conglomerate has determined now to be the optimum moment to achieve maximum value.” 

Speculation of the deal was first reported in late July following a report by Bloomberg News that BHP had initiated a strategic review of its petroleum business.

BHP confirmed the strategic review in a release on Aug. 16 adding: “A number of options are being evaluated. One option is a potential merger of the Petroleum business with Woodside Petroleum Ltd. and a distribution of Woodside shares to BHP shareholders.”

“We confirm that we have been in discussions with Woodside,” the company continued. “While discussions between the parties are currently progressing, no agreement has been reached on any such transaction.”

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Headquartered in Melbourne, BHP is an Anglo-Australian miner that has owned oil and gas assets since the 1960s. The company began its retreat from oil and gas in 2018 with the sale of its U.S. shale assets in two separate agreements. The largest of the transactions was the $10.5 billion cash purchase by BP Plc of BHP’s positions in the Permian Basin, Eagle Ford Shale and Haynesville Shale.

Today, BHP’s petroleum business includes conventional oil and gas operations centered in the U.S. Gulf of Mexico, Australia, Trinidad and Tobago, and Algeria. The company also has exploration, development and production activities in Mexico, deepwater Trinidad and Tobago, Western Gulf of Mexico, Eastern Canada and Barbados.

Wood Mackenzie’s Harwood noted that BHP’s oil operations in the Gulf of Mexico complements Woodside’s deepwater capabilities and add a new core focus area to Woodside’s existing portfolio. 

“Strong cash flow from BHP’s GoM assets over the next decade will provide steady shareholder returns while supporting planned investment across the wider business in LNG growth and new energy opportunities,” he said.

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