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An Australian mining giant is getting out of the U.S. oil business. The exit by BHP Billiton will hit Houston, home to the company’s shale oil operations.
BHP's CEO Andrew Mackenzie announced the move in an earnings call on Tuesday.
“We have classified our onshore U.S. as ‘non-core,'” he said, adding that the company will be "patient" as it considers how to sell off its oil holdings, much of them located across Texas.
“There is a definite risk to their entire Houston-based business,” says Jeff Quigley, Director of Energy Markets at Houston firm Stratas Advisors.
Research from the Houston Business-Journal shows the company has about 1,600 employees at its Galleria headquarters. It's not clear what will happen to those people (BHP didn't respond to a question on the matter), but Quigley says even if the company slowly leaves the oil business, the employment implications will be "huge."
More broadly, he says the move shows how diversified companies that aren’t focused on oil, or at least their investors, are fed up with low prices.
“I think it does indicate that the big guys see opportunities elsewhere,” he says.
Analysts say other companies might be most excited about getting their hands on BHP's acreage in West Texas.