BHP exits oil exploration in the Philippines

With the goal of “simplification and a sharper strategic focus” under new management, mining heavyweight BHP Billiton (ASX: BHP) has ditched plans to drill for oil and gas in the Philippines. The news comes just weeks after the miner exited most of its Indian petroleum assets.

Like others in the industry, including BHP’s primary competitor Rio Tinto (ASX: RIO), BHP has been focused on scrapping non-core assets in an effort to reduce costs and increase shareholder returns. For instance, the company currently has what is estimated to be $5 billion worth of non-core petroleum assets up for sale.

After having determined that the exploration program in the Philippines was “not a strategic fit”, Deutsche Bank resources analyst Paul Young believes that BHP will focus on larger prospects in the Gulf of Mexico and off northern Brazil that could potentially “move the needle” for the company. He said, “It’s more about focusing on the higher probability prospects or most prospective targets.”

Whilst BHP was set to partner Otto Energy (ASX: OEL) to drill a deep-water well in the Palawan Basin, the junior explorer’s shares plunged 29% yesterday following the news.

Foolish takeaway

The outlook for the miners is certainly more appealing now than it was a few months ago with demand for commodities in China remaining strong, however, there are still enormous risks and volatility facing the sector. As such, for investors looking for a safer company to add to their portfolio, the miners might not be the way to go.

A better investment

If you’re looking for some stock ideas to add to your portfolio today, 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.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!