BP’s blockbuster $10.5bn deal for a portfolio of shale oil assets from BHP Billiton was not only its biggest acquisition in almost 20 years, it signalled the company’s big comeback into the US following the deadly Deepwater Horizon disaster of 2010. So confident has the UK energy major been about its recovery that it had initially expressed interest for the Australian miner’s entire US portfolio, including deepwater assets in the Gulf of Mexico, two people familiar with the deal said. This part did not come to fruition.
But the ambition of top executives alone is a marked difference from the cautious investment approach that has categorised BP since the explosion at its Macondo well, with clean-up and penalty costs so far tallying about $66.5bn before tax. “I can’t remember when it has looked this good,” Bob Dudley, chief executive, told analysts after reporting quarterly results in July, referring to the growth opportunities he saw for BP over the coming decade.
The BHP assets give BP a much stronger position in the US shale industry, helping it to catch up with rivals who had invested heavily onshore when it was focused on paying out damages and compensation for the spill.