BHP says oil will stay an 'attractive' commodity for decades to come
BHP believes oil will remain an attractive commodity for "several decades" to come despite the swing to electric vehicles, and has vowed to continue its oil and copper exploration.
The global resources giant is also keen to add more nickel sulphide resources to its portfolio, chief financial officer, Peter Beaven suggested at an investor presentation on Wednesday.
BHP has a wide range of businesses, including iron ore, oil, metallurgical coal, copper, thermal coal and nickel. Assessing what kind of prospects these commodities had, it found that iron ore, copper, nickel and met coal - a key ingredient in steel-making - all had a sound future, but energy coal assets were "challenged".
Whilst BHP still produces energy or thermal coal, its international rival Rio Tinto has dumped its coal assets in recent years. Rio's Chairman Simon Thompson told shareholders this month that coal was "not essential to human progress".
BHP stressed in its investor presentation on Wednesday that its business risks associated with carbon-exposed commodities such as oil and coal were "offset by upside to copper and nickel".
Just last week BHP reaffirmed its commitment to nickel, an important ingredient in electric vehicle batteries, when it confirmed it would keep its Nickel West operations in Western Australia. The business's future had been the subject of much speculation in recent years.
Copper is another key ingredient in electric batteries used in electric vehicles and stationary power storage, and BHP has made no secret of its hopes to expand its copper portfolio. An average family-size electric vehicle requires about four times as much copper as its petrol engine counterpart.
In the field of petroleum, BHP has conventional oil and gas operations off the Australian coast, in the US Gulf of Mexico and in Trinidad and Tobago.
"Our portfolio is in great shape today," Mr Beaven said. "Through a series of well-timed divestments and the demerger of South32, we have simplified our business to create a focussed portfolio of attractive commodities and high quality assets."
"We have generated $US12 billion ($17.4 billion) of productivity gains since 2015. But we know we can still generate a lot more value from our existing assets," he said.
And there were "great new opportunities" coming up, he said. "So we need more options in the commodities that we think will be most attractive in the long run."
Shares in BHP were down half a per cent at $37.74 by midmorning in Sydney.