According to The Australian Financial Review today, BHP Billiton is backing away from its $US30 billion foray into US unconventional gas, taking a $US2.8 billion write-down on its US onshore business.
BHP Billiton investors have accused the giant of overpaying for assets at the peak of the cycle after it took a $US2.8 billion write-down on its US onshore shale gas business.
The resources giant on Wednesday also raised doubts about its commitment to swing its US onshore oil and gas division into cash flow positive territory this financial year, saying it required an average crude oil price of $US60 and national benchmark gas price of $3, well above current prices.
The pull-back in unconventional gas is a clear indication that BHP will focus growth on conventional oil and gas, where BHP chief executive Andrew Mackenzie has spent much of his career.
BHP has repeatedly slashed capital spend for the division over the past year, with the oil price collapse rendering many of its wells unprofitable.
BHP's shale gas-focused Hawkville field – acquired as part of the miner's $US15 billion acquisition of Petrohawk Energy – accounts for most of the $US2.8 billion writedown.
The rest of the write-down is to be taken on goodwill over the Petrohawk acquisition, made in 2011 to take BHP deeper into US shale.
According to The Australian Financial Review today, another major miner, Rio Tinto, has cut its full year iron ore shipments target on weather woes in the first half to 340 million tonnes, from its previous guidance of "approaching" 350 million tonnes.
"Heavy inland rains reduced truck utilisation, resulting in lost production at the mines and impacting the ability to rail planned tonnes," Rio said.
Subscribe to our English Newsletter