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BHP Approves $1.5 Bln CapEx For Phase 1 Of Scarborough Project

BHP (BHP.AX,BLT.L,BBL,BHP) announced Monday that it has approved $1.5 billion in capital expenditure for development of the Scarborough upstream project located in the North Carnarvon Basin, Western Australia.

The decision comes along with BHP's share sale agreement with Woodside Petroleum Ltd to merge their respective oil and gas portfolios.

The company noted that final investment decisions have also been made by Woodside and the Scarborough Joint Venture.

A $150 million payment is payable to BHP Petroleum (North West Shelf) Pty Ltd by Woodside upon the financial investment decision or FID of the Scarborough project pursuant to the 2016 divestment of BHP's 25 percent Scarborough Joint Venture interest to Woodside.

The approved capital expenditure represents BHP's 26.5 percent participating interest in Phase 1 of the upstream development. Woodside holds the remaining 73.5 percent interest and is the operator of the project.

On completion of the proposed merger, BHP shareholders will benefit from exposure to the fully integrated value chain of both the upstream project and the downstream Pluto LNG processing facilities due to their approximate 48 percent shareholding in Woodside.

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