BHP could offload $5 billion in petroleum operations

After meeting with sell-side analysts in London, BHP Billiton’s (ASX: BHP) chief executive Andrew Mackenzie has suggested that the company is looking to simplify its oil and gas portfolio, and could offload up to US$5 billion worth of its interests in the sector.

Shareholders have been applying significant pressure to resources companies, including BHP, Rio Tinto (ASX: RIO) and Fortescue (ASX: FMG) to drastically reduce their costs and, in turn, increase shareholder returns.

Such a move to divest from a number of petroleum operations would allow the miner to do just that, whilst also giving it scope to improve productivity amongst its other core operations, including iron ore, copper and coal.

Whilst NSW coal and Cerrejon have been highlighted as the ‘core’ energy coal assets, there are also a number that may not be considered core, but which could attract bids worth up to US$5 billion combined.

Foolish takeaway

Although there have certainly been positive signs for resources companies recently, with commodity prices remaining resilient, there are still enormous risks facing the sector. As such, investors may be better off looking elsewhere for investment ideas.

For instance, look no further than our #1 dividend-paying stock. Discover The Motley Fool's favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

5 ASX Stocks for Building Wealth After 50

I just read that Warren Buffett, the world’s best investor, made over 99% of his massive fortune after his 50th birthday.

It just goes to show you… it’s never too late to start securing your financial future.

And Motley Fool Chief Investment Advisor Scott Phillips just released a brand-new report that reveals five of our favourite ASX stocks for building wealth after 50.

– Each company boasts strong growth prospects over the next 3 to 5 years…

– Most importantly each pays a generous dividend, fully franked.

Simply click here to find out how you can claim your FREE copy of “5 ASX Stocks for Building Wealth After 50.”

See the stocks now