HOTLINE: BHP’s Scottish ceo rejects demerger (of UK)

BHP Billiton ceo Andrew Mackenzie has come out against a demerger.

BHP Billiton ceo Andrew Mackenzie has come out against a demerger.

No, he hasn’t changed his mind about splitting the company. But he has clarified his position on the forthcoming independence referendum in his home country of Scotland, where he grew up and was educated to university level. 

Mackenzie has put his name to an open letter from 200 Scottish business leaders arguing against independence. Scottish voters will decide on September 18 if they want to leave the United Kingdom, reversing a merger with England agreed more than 300 years ago. 

Scottish nationalists believe their spin-off proposal will allow Scotland to be managed more in line with the country’s own interests and political preferences, and also benefit more directly from its own oil assets. Those against independence warn of the risks that come with establishing and sustaining a new political, financial and monetary framework in a small nation (population 5.3 million).

“Uncertainty surrounds a number of vital issues including currency, regulation, tax, pensions, EU membership and support for our exports around the world, and uncertainty is bad for business,” the letter noted.

While Mackenzie is was speaking in a personal capacity, it should be noted that BHP’s exposure to ‘Scotland risk’ is very small.

A BHP spokesperson told Hotline its stake in the Keith oil platform in the North Sea was its only operating interest in Scotland. He added that BHP Billiton employed no permanent staff in Scotland.

The Keith platform is the main contributor to the BHP petroleum division’s UK unit, which contributed a rather modest 0.2% of the group’s revenues in last financial year.

This isn’t Mackenzie’s first interest in politics. From 2005 to 2007, he was chair of trustees at Demos, one of the UK’s most well-known policy think-tanks.