Queries over BHP’s $20 billion shale gas play

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One of the world’s largest resource investment managers, BlackRock, has accused BHP Billiton of keeping its investors in the dark over its $19 billion move into shale gas.

BlackRock managing director Evy Hambro told a Melbourne audience yesterday investors were wary of BHP because of the lack of clarity it had provided about the move.

“They’ve now embarked on a relatively aggressive [push] into a commodity that no one knew they liked, and until they are able to educate investors as to the reasons why they have gone and done these transactions there are going to be some question marks around the use of that capital,” he said.

“When you start putting something on your stall that you’ve never told investors about, people are naturally a bit reserved, so when you are suddenly exposed to shale gas you want to know why.”

BHP spokesperson Fiona Martin told The Sydney Morning Herald BHP’s move into shale gas was consistent with the company’s strategy.

Late last week BHP chief executive Marius Kloppers tried to distance the company’s shale gas assets from Australia’s controversial coal seam gas industry.

He told the company’s annual general meeting in London shale fracturing happened deeper underground and therefore mitigated environmental risks.

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