Energy Focus / BHP

BHP

BHP

Re-Positioning for a

Sustainable Future PRODUCTION: William Denstone

BHP is among the world-leading diversified resources companies, and more than 80,000 employees and contractors are implicated in the drive to extract and process minerals, oil and gas, primarily in Australia and the Americas. Strong financial results and a record dividend are positioning BHP remarkably strongly for the future, where it envisages that the renewable energy transition will be pivotal to sustainable mining. www.energy-focus.net / 3

INDUSTRY FOCUS: OIL & GAS

//

“Our purpose is to bring people and resources together to build a better world,” BHP, formerly BHP Billiton, sets out of a strategy which enables it to access the best capabilities, best commodities and best assets. “BHP is a diversified resources company.

We produce different types of commodities essential to modern life.”

Since 1851 BHP has been integral to developing and contributing to industry, communities and economies around the world, burgeoning from beginnings at a tin mine on the littleknown island of Billiton (Belitung) in Indonesia to become a world leader in the diversified resources industry.

By 2017 BHP’s market capitalisation placed it as the world’s largest mining company, and Melbourne’s third-largest company by revenue.

DIVERSE OPERATIONS Between Minerals Australia and Minerals Americas BHP’s capabilities span projects, operated and non-operated assets encompassing copper, iron ore, coal, nickel, zinc and potash. The Australian arm’s assets include Olympic Dam, one of the world’s largest deposits of copper, gold and uranium, as well as its significant iron ore and coal interests.

// WE PRODUCE DIFFERENT TYPES OF COMMODITIES ESSENTIAL TO MODERN LIFE //

Queensland Coal, for instance, comprises Australia’s largest producer while Western Australia Iron Ore boasts four processing hubs and five mines, connected by more than 1,000 kilometres of rail infrastructure and port facilities.

A world-leading producer of copper concentrate as well as zinc concentrate and thermal coal, Minerals Americas holds copper operations including the major Escondida mine in the Atacama Desert in northern Chile, the Spence and

Mike Henry

4 / www.energy-focus.net

BHP

Cerro Colorado duo forming its Pampa Norte operation and a large share in Antamina, a large, low-cost copper and zinc mine in north central Peru.

BHP has also owned oil and gas assets since the 1960s and a vast Petroleum unit covers conventional oil and gas operations including exploration, development and production activities. “Today, we have high-margin oil and gas assets located all around the world,” states the company.

“We do big things in the right places. Our heartlands are concentrated positions where we can build businesses greater than the sum of their parts,” BHP explains. “These have had some of the highest margins in BHP and helped to create impactful economic and social partnerships in local communities.”

High-margin conventional assets are located in the US Gulf of Mexico, Australia and Algeria, as well as appraisal and exploration options in Mexico, Deepwater Trinidad and Tobago, Western Gulf of Mexico and Barbados.

“Today, we hold nearly 3.2 billion barrels of oil equivalent in resource,” details Geraldine Slattery, President of Operations, Petroleum. “We continue to add to this resource base through exploration or acquisition, and we continue to unlock commercialisation through technology and strategic partnerships.”

SUSTAINABLE FUTURE “In oil and gas,” BHP cautions, “you must always have one eye on the future. We have the right strategy to succeed and petroleum is set up to thrive well into the future.” This unbending focus on the future bleeds through BHP’s entire approach and outlook, embodied by its firm commitment not just to driving global economic and improving standards of living, but also in leading the energy transition.

“We are proactively positioning for the future with a portfolio and capabilities that will enable us to grow

long-term value,” CEO Mike Henry informs. “We will sustainably supply the commodities needed by the world.”

This was most recently evidenced by the revelation in August that BHP’s Escondida and Spence operations in Chile had begun operating with renewable energies, the contracts with ENEL Generación Chile and Colbún being the largest signed by an unregulated client in the country.

“The entry into force of the first renewable energy contracts is a significant contribution to BHP’s global transition towards achieving zero emissions by 2050,” BHP commented. “It is an important milestone for the Escondida and Spence operations, which will be supplied with 100% renewable energy as from the middle of this decade.

“BHP’s transition towards the

// OUR PURPOSE IS TO BRING PEOPLE AND RESOURCES TOGETHER TO BUILD A BETTER WORLD // use of renewable energy builds on the water strategy that it has been developing since 2006 – when its first desalination plant was commissioned - and which today allows Escondida to operate with 100% desalinated water. The use of renewable energy and desalinated water are part of BHP’s global strategy to develop more sustainable mining.”

The contract with ENEL Generación Chile replaces a coalbased supply contract, which was

www.energy-focus.net / 5

INDUSTRY FOCUS: OIL & GAS

// THE USE OF RENEWABLE ENERGY AND DESALINATED WATER ARE PART OF BHP’S GLOBAL STRATEGY TO DEVELOP MORE SUSTAINABLE MINING // terminated early in order to accelerate the transition to cleaner sources.

The replacement of fossil-fuel based contracts with those based on 100% renewable energy will displace more than three million tonnes of CO2 per year from 2022, the equivalent of the annual emissions of around 700,000 combustion-engine cars.

It is added to the estimated

6 / www.energy-focus.net

1.7 million tonnes of CO2 to be supplanted between 2021 and 2025 at BHP’s Queensland Coal mines, following a renewable power purchasing agreement to meet half of its electricity needs across its from low-emissions sources, including solar and wind.

“This is an important step forward in BHP’s transition to more sustainable energy use across our portfolio, and a first for our Australian operations,” BHP’s President Minerals Australia, Edgar Basto, said. “It is a prime example of prudent business decisions going hand-in-hand with social value, strengthening our business and benefitting the community.”

RECORD RETURNS “The future is clear, and it’s happening now,” BHP abridges, at what looks to be the dawn of a momentous new era for this monolith

of global resources. “At BHP we’re focussed on the resources the world needs to grow and decarbonise sustainably. A resources mix for today, and for the future.”

The desire to build a better world and pursue new opportunities is staunchly backed by the recent announcement of record returns, with a final dividend of US$2 per share bringing total shareholder returns to more than US$15 billion for the year.

Alongside strong financial results and a record dividend, BHP also announced major reorganisation of its portfolio and corporate structure, positioning it even more strongly to grow value through producing the commodities the world needs for economic growth and decarbonisation. Among the headlines were investment of US$5.7 billion in the Jansen Stage 1 project

BHP

in Canada, a new high-margin business in the world’s best potash basin opening up a new future growth front for BHP. A further striking revelation was the intended creation of a global top 10 independent energy company through a merger of BHP’s petroleum business with Woodside. This would streamline BHP’s corporate structure to a single primary listing on the

// BHP’S PRODUCTS ARE ESSENTIAL TO GLOBAL ECONOMIC GROWTH, IMPROVED LIVING STANDARDS AND THE ENERGY TRANSITION //

Australian Securities Exchange, lending BHP a simpler and more agile aspect for the historic times ahead.

“BHP is in a strong position to manage its future in a time of rapid change,” underlined BHP Chair, Ken MacKenzie. “Jansen Stage 1 will give BHP exposure to a commodity with a strong demand outlook and decades of potential growth. The agreement to pursue a merger of BHP’s Petroleum business with Woodside will maximise the value of our oil and gas assets through increased operating scale and synergies, with a more diversified product portfolio to support the energy transition.

“Now is the right time to unify BHP’s corporate structure. BHP will be simpler and more efficient, with greater flexibility to shape our portfolio for the future.”

“BHP’s products are essential to global economic growth, improved

living standards and the energy transition,” put forth Mike Henry in concluding. “The world will need more copper and nickel for electrification, renewable power and electric vehicles, iron ore and highquality metallurgical coal to produce the steel for infrastructure, including that required for decarbonisation, and the potash required for sustainable global food production.

“We are actively positioning BHP to meet the world’s needs and to continue to sustainably generate value for our shareholders, employees, and business partners, as well as for our host communities and governments.”

WWW.BHP.COM

www.energy-focus.net / 7

Published by CMB Media Group Chris Bolderstone – General Manager E. chris@cmb-media.co.uk Rouen House, Rouen Rd, Norwich NR1 1RB T. +44 (0) 1603 855 161 E. info@cmb-media.co.uk www.cmb-media.co.uk CMB Media Group does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/ or in advertisements included in this magazine do not necessarily represent those of the publisher.

Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved.

No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. © CMB Media Group Ltd 2020

THE BUSINESS MAGAZINE FOR ENERGY LEADERS

www.energy-focus.net

September 2021

Dogger Bank to Supply 5% of UK Electricity Demand Exclusive interview with Steve Wilson, SSE Renewables Project Director

ALSO IN THIS ISSUE:

Finergreen / BP / TotalEnergies / Vestas

AS FEAT UR ED IN

ENERGY FOCUS

SEPT EMBER 2021