BHP to ramp up US shale rigs despite divestment calls

BHP said Wednesday it would double the number of onshore US shale rigs, despite a major shareholder pushing for the commodities giant to divest its American oil and gas assets.

The Anglo-Australian firm said in an annual operational review ending June 30 that it increased the rig count to five during the April-June quarter, with plans to boost that to 10 in the 2018 financial year.

The ramp up came even as BHP said it would sell-off non-core shale assets in Hawkville, Texas, in the September quarter.

New York-based Elliott Advisors, a significant shareholder in the company, is pushing for BHP to restructure the business, including spinning off its US oil and gas operations and dissolving its costly dual stock market listing.

The world's biggest miner rejected Elliott's proposal in April, while Canberra has warned that removing BHP from the Australian Stock Exchange was not in the national interest.

Apart from iron ore and energy coal, annual production for BHP's other assets -- petroleum, copper and metallurgical coal -- all fell, pushing shares down 1.67 percent to Aus$24.68 in Sydney Wednesday.

Total iron ore production for the 2017 financial year rose four percent to 231 million metric tons after record output from its Western Australia operations.

The lift also came during a period where prices for the metal surged following a slump from a supply glut and softening Chinese demand.

Copper output eased 16 percent for the year to 1,326 kilotonnes, hurt by a strike in Chile at the world's largest copper mine Escondida, with the industrial action also costing BHP US$546 million in costs.

But copper production was "expected to rebound strongly in the 2018 financial year", BHP chief executive Andrew Mackenzie said, on the back of a new water project and an extension programme at Escondida.

Rio Tinto, the world's second-largest miner, said Tuesday in its second-quarter production report that shipments and production for iron ore, its main commodity, slipped slightly for the period owing to "adverse weather conditions".

source: AFP