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Bids value BHP's US shale assets at $9bn
Multinational mining, metals and petroleum firm BHP Billiton has received the first round of bids for its US shale portfolio, valuing the unit at between $7bn and $9bn, according to sources who spoke to Bloomberg.
Bids are understood to have been made by Royal Dutch Shell, allied with equity firm Blackstone Group, Chevron and an unnamed private equity group, and BP acting alone according to the same sources.
Australia based commodities giant BHP expects to receive upwards of $10bn for the entire unit after bidding continued to a second round, or upward of $13bn if the company sells the assets piecemeal.
Parties such as Apollo Global Management are understood to have bid separately for individual packages of the shale real estate.
Speaking to Bloomberg Peter O'Connor, a Sydney-based analyst at Shaw and Partners Ltd., said: "It's serious people that are contesting, people with the balance sheets and industry experience. They won't pay too much - but they won't pay too little, because they want the assets."
BHP's Permian Basin assets appear to be of particular interest as Shell's upstream director Andy Brown said in February that the company were interested as drilling in the area can cost explorers as little as $15 a barrel.
The Permian properties were previously held by BP until the firm was forced to sell assets in order to raise cash for expenses tied to its oil spill in the Gulf of Mexico.
BHP first indicated its intention to sell the assets last summer following activist investor Elliott Management Corp admitting that its investments in shale, and other factors, had wiped out $40bn in shareholder value.
As of 1633 BST, BHP Billiton's shares were up 1.95% at 1,770.20p.