President Australia, BHP Group
BHP: Geraldine Slattery, President Operations Petroleum, BHP | Oil & Money 2019 - Day 2 Luncheon
Geraldine Slattery, President Operations Petroleum, BHP Moderator: Noah Brenner, Bureau Chief, Houston, Energy Intelligence.
About Geraldine Slattery
Geraldine Slattery, President Australia for BHP, spoke at the Melbourne Mining Club on 5 December 2024, where she discussed the competitiveness of the Australian resources sector. She stated that "the industrial relations changes of the past two years will raise costs reduce productivity and take us backwards in our ability to compete globally." Slattery also noted that the sector had paid over $350 billion in company tax and royalties over the previous 10 years, which she described as "essentially the same as paying for 10 years of Medicare." She emphasized the need for a "relentless pursuit of a better future" and called for holding every policy up to assess its alignment with goals, focusing on workforce, technology, and a culture of competitiveness. In earlier shareholder Q&A sessions in 2023, Slattery expressed concerns about proposed "same job same pay" legislation, arguing it would capture many well-paid workers in the resources sector and make Australia less competitive. She also criticized market interventions such as royalty increases in Queensland, which she said called into question the stability of investment terms. In 2019, while President of Operations Petroleum, Slattery described petroleum as a "growth pillar" for BHP alongside copper, citing demand trajectories for oil and gas, while acknowledging that renewables would take a larger share of energy supply under any scenario.
Transcript (15 segments)
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Noah0:05
All right. Ladies and gentlemen, we are joined today by Geraldine Slattery, President, Operations, Petroleum for BHP. Geraldine, welcome.
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Geraldine Slattery0:14
Thank you, Noah. Glad to be here.
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Noah0:16
Well, now BHP is unique among the companies that are here in that you have investments in oil, gas, copper, iron. Where exactly does petroleum fit within the BHP portfolio?
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Geraldine Slattery0:28
So, let me start to answer that by saying just a couple of words about how BHP looks to grow value and returns, because it sort of puts petroleum, if you like, in its place. Our strategy is simple. We look to be in commodities with attractive demand trajectories and ability to generate rent. We like big assets that have growth potential and we seek to do those things that we have capabilities in. We're good at them. And so, when you put petroleum in that context, then not only are we an integral part of the portfolio, but in fact we're a growth pillar along with copper. And that's fundamentally because we believe in the demand trajectory, particularly for oil, and also for gas. And we think we've got the capabilities to generate returns from that.
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Noah1:19
And now, but there have been reports that BHP was actually considering getting out of the petroleum business. I mean, is the company truly committed to being in the oil business?
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Geraldine Slattery1:29
So, beyond maybe the fundamentals of the commodity attractiveness that I spoke about, the part of the value that we see in a diversified portfolio such as ours is that we're less exposed to the individual commodity cycles and so we're less exposed from a cash flow point of view. We see less volatility and that's not just a belief that shows up in performance. We're less exposed to market concentration and maybe particularly importantly as we think about the focus of this conference is that we're less exposed to end market disruptions in any one market and so that shows up for us particularly across our oil and gas portfolio as it does tend to operate somewhat counter cyclically with the other commodities. So I think we're here to stay and as long as we see the attraction in oil and gas commodities, I think you will find that's the case.
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Noah2:28
Now you did mention disruptions and we've certainly seen rising geopolitical risks globally, but specifically within the BHP petroleum portfolio, we have really seen a shift in the political climate in Mexico and their approach towards foreign investors there. Can you still build a long-term oil and gas business in Mexico?
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Geraldine Slattery2:50
So like perhaps many in this room, we were very attracted to Mexico because of the subsurface potential and the opening of the energy market there. I think at a fundamental level despite the change in rhetoric and administration, we've been very reassured with the continued support for the sanctity of contracts in Mexico. We see that the objectives of the administration are very tied to our own in terms of exploiting the resource for the benefit of not just the Mexican economy, but supporting improvements in socially and that's very much tied to how we like to operate as a company and so we're advancing our plans there. We do continue to look at growth opportunities and we're quite optimistic actually on how Mexico will play out over the long term.
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Noah3:45
Well, and now the energy transition is the theme of this conference as well. It's really dominating the news cycle here in London obviously, with the protests as well as globally. Given that you do have a different portfolio, some of your peers are diversifying into, say, integrated power, renewables, how does BHP look at its portfolio through the lens of an energy transition?
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Geraldine Slattery4:10
So, I think we've long recognized that there are a number of demands globally. One is for affordable and reliable energy. I think we all probably recognize that and that supports our case in petroleum. And accepting that there's uncertainty in how energy demand will play out, we under any scenario see renewables taking a bigger portion of energy supply. Be it in stationary power, be it in electric vehicles. And so, from a portfolio perspective and a strategy perspective, copper, of course, and iron ore are fundamental building blocks of be it battery storage, be it offshore wind turbines, onshore wind turbines. And so, from a portfolio perspective, we have exposure to both the renewable side and the fossil fuel side, both from energy and indeed from materials. And so, that's how we look at it from a portfolio perspective. We also recognize though that we have a role to play in mitigating and limiting the effects of climate change. And so, some of the things that you see us doing is investing in low emissions technology, recognizing the role of carbon capture and storage, investing in technologies such as direct air capture, and very much wanting to be part of the solution and taking a leadership role in that.
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Noah5:45
Now, I'm sure that message resonates with many of the people that are here in this room. But as you know, London has been filled with climate protesters in the past few days. We came face to face with that yesterday. How do you think that message might resonate with them? And I mean really, is there a space in this increasingly polarized climate debate for that type of dialogue?
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Geraldine Slattery6:12
So, I think if we look forward into an ideal scenario, then we would be having a collective dialogue, as opposed to having one dialogue here and another dialogue outside on the street. And the reason I say that is because there is no one solution here. There's trade-offs between energy, the need for energy, the need to mitigate climate change, and it will take quite a diversity of positions and experiences. So, be it academia, be it industry, be it research bodies. And there's a whole heap of talent out there with a lot of ideas. And I think if we can bring those together and take a systemic approach that speaks to both objectives, then I'd like to think that's where we can get to. And I think our role in that is to create the forums and the transparency that allows that debate to come into the room.
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Noah7:12
Mhm. And now, you mentioned talent yesterday. Total CEO Patrick Pouyanné mentioned that he was concerned about the industry's ability to attract that next generation of talent that is needed. Some of those protesters out there have the types of skills that the oil and gas industry is looking for, whether it's in digital technologies or programming or any of the ways that the companies are trying to advance. I guess how do you convince people who might somewhat agree with those protesters out there, maybe more than somewhat agree, that a company like BHP is really the place to put their talents to work?
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Geraldine Slattery7:52
Yeah, I think Patrick raised a good point and you echo it here. If there's one area in our future that I'm thoughtful about, it is the ability of our industry to attract talent to be successful and competitive in the future. I think access to talent is a big part of that. I think some of the things that we are doing internally, we seek to be much more transparent in our commitment to whether it's climate change or sustainable energy and seeking to just be very open about where we are putting our investment. We are also advertising kind of more on some of the cool things we're doing around digital strategy, around how we use seismic technology, how we use automation. I don't know that traditionally this industry would have had a great record on being very front-footed on technology and I think that's something that the talents of today can play a big part in. And equally we've recognized that we need to be more inclusive in our organizations so that your work is something that you do, something you contribute as opposed to a place you come to. So technology enabling a more inclusive work environment you can work from anywhere and some of the other things we're doing, we've got a diversity target, gender targets that seek to recognize that there's a bigger talent pool out there than maybe we're accessing today. And so I think it's all of the above but it is something that I and others at BHP are thoughtful about and recognize that we can do more there.
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Noah9:34
Well, excellent. I think we're to wrap up there so everyone has time for dessert, but Geraldine, thank you very much for joining us.