BHP Faces Music on Shale Spurring Belief Dividend Is Next
- Impairment to reduce value of unit to about $16 billion
- Producer spent $20 billion in 2011 to acquire U.S energy plays
BHP Billiton Ltd. said it expects to take a writedown of $4.9 billion on the value of its U.S. shale assets due to the tumble in oil prices. Its next safeguard against the commodities collapse may be to abandon its decade-old pledge to maintain or raise its dividend. The stock slumped to the lowest in 10 years in London.
The Melbourne-based producer, the biggest overseas investor in U.S. shale, is cutting capital expenditure and seeking other savings as it grapples with the slide in prices of metals and energy, and the costs of November’s deadly dam breach at its iron ore venture in Brazil. Iron ore, the company’s top earner, has slipped more than three-quarters since its 2011 peak, while oil this month plunged below $30 a barrel for the first time in 12 years.