There was plenty to unpick with resources giant BHP’s (BHP) latest set of updates but in our view the ultimate upshot could be positive for the business.

Alongside robust first half results the company announced a plan to merge its oil and gas assets with Australia’s Woodside Petroleum, invest in the next phase of the Jansen potash project and to simplify its corporate structure.

The Woodside news ticks a big ESG box, positioning the company so it can benefit from the transition away from fossil fuels by supplying the metals required for renewables and electric vehicle infrastructure.

The fact this is a share-based transaction may disappoint some investors but they will have an option of selling their holdings in the new combined entity after Woodside merges with BHP’s petroleum arm, likely in 2022.

The investment in potash looks like it could be the first in a series of steps to bolster BHP’s exposure to what it describes as ‘future facing’ commodities with Jefferies expecting acquisitions in the medium-term.

The scrapping of the dual company structure which has existed in the two decades since the merger of BHP and Billiton in 2001 will effectively see all shareholders transferred to the Australian-based business with the main listing in Sydney and a secondary listing in London. This will see the company exit the FTSE 100 and put the stock outside the remit of some funds and fund managers.

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