BHP confirms talks with Woodside to sell its petroleum business

BHP Group Ltd. said it is considering the sale of its petroleum business, a move that would reduce its exposure to fossil fuels amid growing pressure from investors and governments for resources companies to cut emissions.

BHP, the world’s biggest mining company, said it is in talks with Woodside Petroleum Ltd. on a potential deal to combine BHP’s petroleum unit with the Australian oil-and-natural gas company. BHP is also assessing other options for the division as part of a strategic review, the company said, without elaborating.

Analysts estimate the petroleum business is worth at least $15 billion, and a deal is being explored while BHP separately hunts for a buyer for its thermal coal mining business.

Selling the petroleum business would lead to BHP focusing on mined commodities: iron ore, metallurgical coal, copper, nickel and potentially potash if it proceeds with a large Canadian project. Of these commodities, iron ore accounts for the largest share of BHP’s profits.