BHP has plenty of big calls to make on its Australian oil and gas exposure. And a new country chief will soon be touching down to help progress a plan.
The resources giant’s Australian boss of petroleum, Graham Salmond, has departed Perth for Texas, taking up a new role as North American and Caribbean vice-president.
Replacing Mr Salmond in the WA capital on July 1 will be Shiva McMahon, a vice-president of finance for BHP Petroleum, who only joined BHP in Texas last year and will arrive at a delicate time for the company.
The Iranian-born Ms McMahon will no doubt be tasked with feeding intelligence to BHP’s petroleum chief Geraldine Slattery on three major Australian projects where it faces big calls: the Bass Strait, North West Shelf and Scarborough. First up on the east coast is the Bass Strait, where it is a 50 per cent partner with oil giant ExxonMobil. Both majors appear far from certain on their next move.
Exxon opened a sale in September 2019 of its Bass Strait interests and then abandoned the process a year later while BHP has indicated it will sell its 50 per cent stake as it seeks to refresh its petroleum division.
Looming in the background is a $2bn-plus clean-up crackdown by the national environmental regulator, which would appear a major handbrake on any process to sanction a selldown and may limit the appetite of linked suitors, such as Beach Energy to any deal.
The North West Shelf also remains a puzzle given six producers all own a one-sixth stake and have differing views over its value as the ageing LNG plant moves into a tolling model.
US major Chevron wants to sell out, but achieving a deal has been slow going and the logical acquirer, operator Woodside Petroleum, is out of the race given it holds pre-emptive rights on any transaction.
Still, BHP’s appetite to remain in a venture that’s reliant on third-party gas appears out of step with its preference for higher returning assets.
It is also integral to the future of Woodside Petroleum’s $16bn Scarborough gas development offshore Western Australia with commercial talks on gas agreements between the venture partners still ongoing.
Woodside has rejected a clamour among some investors for gas from Scarborough to be fed through the North West Shelf and instead wants it to prop up a Pluto LNG plant expansion.
Ms McMahon spent the bulk of her career at BP including a stint with finance oversight of BP’s interest in Atlantic LNG in Trinidad and Tobago.
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