Woodside wins backing to buy BHP oil, gas amid climate backlash

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(Bloomberg) — Woodside Petroleum Ltd. almost certainly won investor approval to boost global oil and gas production by adding BHP Group assets while also facing a rebuke on its climate accounting.

Almost all votes cast before an annual general meeting Thursday backed the acquisition, valued at about $23 billion by BHP last month, of operations and development sites, including in the U.S. Gulf of Mexico and the Caribbean. Woodside plans to release final voting totals after the gathering.

“The merger is an opportunity for Woodside to increase its contribution to the world’s growing energy needs and build the scale, resilience and diversity to thrive through the energy transition,” Chief Executive Officer Meg O’Neill said in a speech to the Perth meeting.

However, the producer faced a backlash for its climate report. The inaugural plan, which is being put to a non-binding vote, had received criticism for its emissions reductions plans, especially for failing to do enough to address Scope 3 emissions generated by customers’ use of its fuels.

“A significant proportion of shareholders who have already voted on this item have not supported the report,” Chairman Richard Goyder said Thursday. “The Board stands by the quality of both the Climate Report and Woodside’s overall climate strategy.”

BHP, the world’s largest miner, is shedding its oil and gas portfolio under a strategy shift that’s aimed at focusing on materials with greater exposure to clean energy and population growth, including potash and battery metals. Adding the BHP assets will potentially see Woodside become one of the world’s five biggest liquefied natural gas producers and boost its oil output, but also its emissions.

Woodside has set out targets to cut Scope 1 and 2 emissions by 15% by 2025 and 30% by 2030 before reducing them to zero by 2050, according to the Climate Plan 2021 report. It also said it would invest $5 billion by 2030 in new energy products such as hydrogen to reduce the far larger scope 3 emissions.

“Woodside’s approach has two key elements – reducing our net equity Scope 1 and 2 greenhouse gas emissions, and investing in the products and services that our customers need as they too reduce their emissions,” Chief Executive Officer Meg O’Neill said at Thursday’s AGM.

Woodside’s Scope 1 and 2 emissions from equity in its projects were 3.2 million tons of carbon-dioxide equivalent in 2021, according to its climate report. Scope 3 emissions were almost 12 times more, at 37.2 million tons.

The company’s shares fell as much as 3.8% in Sydney trading. They have rallied about 33% over the past year on the back of high oil and natural gas prices.