Woodside Petroleum will merge with BHP’s oil and gas business. Credit: BHP.

The Australian Competition and Consumer Commission (ACCC) has approved Woodside Petroleum’s $28bn merger with BHP subsidiary BHP Petroleum International.

According to the deal signed in November 2021, BHP Petroleum will be merged with Woodside Petroleum to create a global, top-ten independent oil and gas producer.

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According to Australia’s competition regulator, the transaction would not adversely impact the competition in the country’s gas market.

In addition to supplying domestic natural gas in Western Australia, Woodside and BHP Petroleum export liquefied natural gas (LNG), liquefied petroleum gas (LPG), condensate, and oil from Australia.

ACCC chair Rod Sims said the regulator examined the proposed transaction, which would see the integration of two of the four largest domestic natural gas suppliers in Western Australia.

In the review, ACCC focused on Western Australia’s natural gas supply as this is where Woodside and BHP Petroleum overlap in the country.

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The review concluded that the customers of Woodside and BHP Petroleum are either in areas where the two firms do not overlap, or are offshore.

Sims added: “Woodside’s share of domestic gas after the acquisition will be approximately 20%.

“In Western Australia, gas exporters are required to reserve the equivalent of 15% of their export production for the domestic market, ensuring that domestic gas will continue to be available from Woodside and BHP Petroleum’s export assets, and from a range of other competitors.”

The merger is planned for completion in the second quarter of 2022.