BHP abandons Browse

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From the AFR:

BHP Billiton has exited the Woodside Petroleum-led Browse liquefied natural gas venture, inking an expensive $US1.63 billion deal to sell its stake to Chinese oil giant PetroChina and further shaking up the troubled venture.

The deal is the third major overhaul in ownership stakes this year in Browse LNG, which is struggling to reach a final investment decision on the $40 billion project at James Price Point by June 2013 as required under its rights to hold onto the offshore gas fields.

Earlier this year Chevron also exited Browse LNG, divesting its stake to existing partner Royal Dutch Shell as part of a $US2 billion-plus asset swap, while Woodside sold part of its holding to the Japanese trading houses Mitsui and Mitsubishi for $US2 billion.

BHP is selling an 8.33 per cent stake in the East Browse joint venture, where most of the Browse gas is found, and a 20 per cent interest in the West Browse venture, equating to a total holding in the combined venture of 11-13 per cent.

This looks like a strategic stake for PetroChina. The project looks more unlikely by the day, at least for this cycle. With the Chinese building their stake, there’s hope for the future.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.