Shareholders overwhelmingly support the merger of Woodside and BHP’s petroleum assets

Woodside has won support from shareholders for its $57bn merger with BHP’s petroleum assets after a marathon meeting that was dominated by questions around ESG.

Richard Goyder, chairman of Woodside Petroleum.

Woodside Petroleum’s $57bn merger with BHP's petroleum assets was enthusiastically waved through by shareholders at the former’s annual meeting on Thursday, at a marathon event dominated by scores of questions on governance and climate issues.

Chairman Richard Goyder and chief executive Meg O’Neill patiently worked their way through more than 100 questions asked across the 10 resolutions being considered, with few of the queries straying from the themes of carbon emissions, corporate governance or social licence to operate.

Mr Goyder’s patience appeared to briefly run out when he was accused by Greenpeace Australia chief executive David Ritter of “seeking to gaslight the United Nations’’, with Mr Goyder shutting down Mr Ritter’s microphone and moving on to other speakers.

However at the end of the three and half-hour meeting, the chairman thanked those who had asked a multitude of questions, many calling into question the basis for the company’s ongoing business operations in a carbon-constrained world.

“We know that different people have different agendas, but it was done in a way that was respectful and I think we all appreciate that that's the best way of doing these things,’’ Mr Goyder said.

The main business of the meeting — to vote on the merger of Woodside with BHP’s energy assets — was not considered until about two hours into the meeting, with the vote itself proving decisive, with 98.66 per cent of votes cast in favour.

The company’s remuneration report was also overwhelmingly supported, as was a resolution to change the new entity’s name to Woodside Energy Group, while a non-binding vote on the company’s climate report copped a 48.9 per cent protest vote against it.

Mr Goyder, in his address to the meeting, stressed the importance of natural gas to assist with the decarbonisation goals of developing countries in Asia, “which typically are fast-growing and often coal-dependent’’.

It is fair to say this argument did little to salve the concerns of the many shareholders who stood to ask questions on everything from the company’s plans to protect sacred sites at its $US12bn Scarborough offshore gas project in Western Australia to its tree planting offset plans, with the overwhelming weight of questions around the company’s alignment to net zero goals.

Mr Goyder said early in the piece that he believed there was common ground between the protesters outside the annual meeting, which was held in Perth, and the company itself, on the transition to a lower carbon world, there was just a difference of opinion on how to get there.

“We’re happy to listen to any seriously well thought-through views,’’ Mr Goyder said.

“I’m very much of a view that people with different views need to be around the table and engaged with so that we can find a way forward.

“If I can indulge myself for one minute, I don’t think the views of the protesters outside the meeting today and ours are that different. We all want a lower carbon world and we want to deal with climate change. The only debate is how best we do that.’’

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In response to a question, he added that he was always more than happy to respond to queries from genuine shareholders, however he did not consider that people who bought one share and held it briefly in order to gain the right to speak at the annual meeting fit the definition of a “real shareholder’’.

“I think anyone who knows me would know that my entire business career has been about creating value for all stakeholders, including shareholders, and I’ve spent an inordinate amount of my time talking to and listening to shareholders,’’ he said.

“We welcome the views of all shareholders. Any comments I might have made three years ago would have been to the tune of, people who come to meetings like this, represent with one share, which today would cost $30, who sell it tomorrow, who actually aren’t a real shareholder and who promote their activist views and use this as a lobbying position rather than genuine engagement with the board on the future direction of the company.

“I welcome any genuine engagement with Woodside, with us, with the management team on where we’re going, and I think our track record absolutely indicates that we’re up for that.’’

With the deal now signed off, BHP shareholders now stand to receive 0.1807 new Woodside shares for each BHP share held – or one new share for each 5.534 BHP shares — with the merged entity to end up 52 per cent Woodside and 48 per cent BHP on a shareholder basis.

BHP has promised to distribute the shares as a “special dividend”, meaning $US10bn worth of franking credits will attach to the share issue

Woodside Energy group expects to generate $US12bn in revenue per year and $US5bn in pre-tax earnings, with annual synergies of $US400m flowing from the tie-up.

The deal is expected to complete on June 1, when BHP shareholders will be issued their new shares.

Woodside shares closed 2.8 per cent lower at $29.89 on Thursday while BHP was off 1.7 per cent to $46.23.