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MarketScreener Homepage  >  Equities  >  Australian Stock Exchange  >  BHP Group    BHP   AU000000BHP4

BHP GROUP

(BHP)
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BP aims to sell more U.S. crude to Asia, boost LNG supplies in early 2020s

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09/06/2019 | 04:10am EDT
FILE PHOTO: The BP logo is pictured on a pump at a petrol station on the outskirts of Mexico City, Mexico

SINGAPORE (Reuters) - Oil major BP plans to sell more U.S. crude to Asia as its shale oil production grows, seeking to capitalise on growth in the world's key demand region.

The strategy, outlined in a Reuters interview with company executives, follows BP's move to acquire giant miner BHP's assets in the United States' prolific Permian shale basin last year, expected to give its portfolio a boost in light-sweet crude production.

"This (Asia) is a key growth region" for energy demand, said Sharon Weintraub, BP's chief executive officer of supply and trading for the eastern hemisphere. She didn't specify BP's growth targets for Asia sales.

"We recently bought BHP's assets in our U.S. business so we have a greater amount of Permian crude coming to market over the next few years in terms of our equity portfolio," Weintraub said.

Zoe Anderson, head of analytics at the supply and trading, eastern hemisphere business, said, "The idea is, yes, we want to send (U.S. crude) supply here (Asia)."

BP has been actively shipping U.S. crude to Asia, having sold cargoes to Japan, Australia, Thailand and Vietnam as it jostles for business in the world's fastest-growing market with other giant producers and traders like Occidental, Trafigura, Royal Dutch Shell, Exxon Mobil Corp, Chevron and Aramco Trading Co.

BP ships a variety of light crudes to Asia, such as West Texas Intermediate (WTI) Midland and Eagle Ford, and medium-sour grades Mars and Thunder Horse.

More U.S. crude is being processed by refineries across Asia. It's replacing falling regional low-sulphur crude production, and some of the world's top crude oil importers, like South Korea and India, are expanding imports this year to replace sanctions-hit Iranian oil.

Sanctions on Venezuela, as well as Iran, have kept crude supplies in Asia snug, supporting Brent at $60 a barrel. But new supplies of refined products, liquefied natural gas (LNG) and petrochemicals have hit the market just as trade tensions between the United States and China dent demand, weighing on prices this year.

"With a lack of confidence affecting things like trade flows that's going to extend downside risks in the short run till we see some resolution, which is still unclear when that's going to happen," Weintraub said.

BP is also expecting new LNG supplies from Indonesia, Africa and the United States to come online in early next decade, Weintraub said, a period where some analysts expect the market to tighten.

These supplies include BP's share of production in the Greater Tortue development offshore Senegal and Mauritania, Venture Global's Calcasieu Pass project in the United States, and Indonesia's Tangguh phase 3 expansion.

"LNG is a cyclical market and it happens to be on the weaker side today, and we do expect demand to potentially right-size itself," Weintraub said.

Longer term, Asia also features in BP's plans to cope with a gradual global shift away from oil and into cleaner energy sources.

BP said last month it would build a network of electric-vehicle charging hubs in China with Didi Chuxing, the country's biggest ride-hailing company, in a bet on the world's largest market for such cars.

(Reporting by Florence Tan and Gavin Maguire; Editing by Kenneth Maxwell)

By Florence Tan

Stocks mentioned in the article
ChangeLast1st jan.
AMP LIMITED -1.72% 1.425 End-of-day quote.-25.59%
BHP GROUP 0.08% 37.95 End-of-day quote.-2.49%
BP PLC 2.47% 306.65 Delayed Quote.-36.55%
CHEVRON CORPORATION 0.82% 87.2 Delayed Quote.-28.23%
DOW JONES AFRICA TITANS 50 INDEX 1.01% 487.25 Delayed Quote.-11.60%
EXXON MOBIL CORPORATION 0.87% 43.85 Delayed Quote.-37.70%
JUST GROUP PLC 1.91% 45.86 Delayed Quote.-43.04%
LETS HOLDINGS GROUP CO., LTD. 0.85% 10.63 End-of-day quote.75.99%
LINE CORPORATION -0.19% 5380 End-of-day quote.0.56%
LONDON BRENT OIL 2.35% 45.32 Delayed Quote.-33.56%
LOOK HOLDINGS INCORPORATED -0.44% 675 End-of-day quote.-46.09%
MIDLAND HOLDINGS LIMITED 1.37% 0.74 End-of-day quote.-34.51%
NEXT PLC 2.25% 5626 Delayed Quote.-21.60%
ROYAL DUTCH SHELL PLC 1.01% 13.442 Delayed Quote.-49.14%
S&P AFRICA 40 INDEX 2.14% 163.45 Delayed Quote.-7.63%
SAUDI ARABIAN OIL COMPANY 0.15% 33.05 End-of-day quote.-6.24%
SHIFT, INC. 1.64% 11800 End-of-day quote.47.87%
THE EASTERN COMPANY 1.84% 17.7 Delayed Quote.-43.07%
THE GLOBAL LTD. -2.48% 197 End-of-day quote.-58.17%
WILL GROUP, INC. 0.89% 569 End-of-day quote.-54.55%
WORLD CO., LTD. -1.38% 1285 End-of-day quote.-52.25%
WTI 1.98% 42.26 Delayed Quote.-33.77%
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Financials (USD)
Sales 2020 42 939 M - -
Net income 2020 8 519 M - -
Net Debt 2020 11 876 M - -
P/E ratio 2020 22,7x
Yield 2020 3,25%
Capitalization 180 B 130 B -
EV / Sales 2020 4,48x
EV / Sales 2021 4,71x
Nbr of Employees 28 926
Free-Float 58,2%
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Technical analysis trends BHP GROUP
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Mean consensus OUTPERFORM
Number of Analysts 15
Average target price 26,44 $
Last Close Price 37,95 $
Spread / Highest target -17,1%
Spread / Average Target -30,3%
Spread / Lowest Target -49,4%
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NameTitle
Mike Henry CEO & Non-Independent Executive Director
John Kenneth Norman MacKenzie Chairman
Peter Beaven Chief Financial Officer
Rag Udd CTO & VP-Technology Global Transformation
Malcolm William Broomhead Independent Non-Executive Director
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