Woodside says BHP interest 'possible' after Shell sell-off

9th November 2010, Comments 0 comments

Australia's Woodside Petroleum on Tuesday said it could be in the sights of mining giant BHP Billiton following Royal Dutch Shell's sale of a 3.3-billion-US-dollar stake that sent its shares diving.

Shell said the 78.34 million shares, one-third of its holding in Woodside, was sold to equity investors as part of a wider bid to raise capital.

The announcement, made in London late Monday, sent Woodside's shares tumbling 6.26 percent to 42.99 dollars on the Sydney stock exchange.

Woodside's chairman Michael Chaney said "it is possible" BHP Billiton would now be interested in entering the fray, especially given it had "run the ruler" over Woodside in the past.

"It is natural that they'd be doing so again," Chaney told a business lunch in Perth.

BHP, which has earlier this month had its 38.6-billion-US-dollar bid for Canada's Potash Corp. of Saskatchewan Inc. rejected by regulators, declined to comment on the Woodside speculation, Dow Jones Newswires reported.

But Chaney played down the prospect of Woodside being taken over in the near term.

"We don't see this as a destabilising situation at all in the sense of making a takeover more likely," he told reporters.

Chaney said he'd been informed of the sale "just before the market closed" on Monday and he understood Shell had "huge financial commitments" it needed to meet by selling off indirect investments.

Woodside is Australia's second-biggest oil and gas company and has announced an ambitious push into the lucrative LNG sector.

Its Pluto LNG project, off Australia's northwest coast, is estimated to hold 4.1 trillion cubic feet of dry gas, with another major project slated at the Browse gas field, further north.

Analysts say Woodside is likely to attract interest from state-owned enterprises in countries such as China as well as large energy companies.

"I suspect there will be interest at least to look at it, and see what actions progress from there," said Deutsche Bank oil and gas analyst John Hirjee.

LNG is produced by cooling natural gas into liquid form so that it can be stored and transported easily. It is popular partly because it is more clean-burning than other fossil resources.

-- Dow Jones Newswires contributed to this story --

© 2010 AFP

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