Freeport-McMoRan Copper and Gold adds Oil and Gas

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BIZMOLOGY — The natural resources industry is not the sexiest market in the world, but occasionally a big story breaks through.

How about a $16 billion acquisition?

Diversifying its portfolio, Freeport-McMoRan Copper & Gold (FCX), a leading copper and precious metals miner, has moved into the oil and gas market, acquiring Plains Exploration & Production for $16.3 billion (including $9.7 billion of debt).

In 2012 FCX’s proven and probable reserves totaled 116.5 billion pounds of copper, 32.5 million ounces of gold, and 321.4 million ounces of silver. Its 91%-owned subsidiary, PT Freeport Indonesia (PT-FI), operates the vast Grasberg gold, copper, and silver mine in Indonesia. FCX is also engaged in smelting and refining via PT-FI’s 25% stake in PT Smelting, a copper smelter in Indonesia. It has major mining operations in the Americas, including the Morenci minerals district in North America and the Cerro Verde and El Abra operations in South America. In Africa it operates the Tenke Fungurume minerals district in Congo.

The acquisition of Plains Exploration & Production adds a large portfolio of US-based oil and gas assets and diversifies FCX’s business segments. Assets acquired include oil production facilities in California, a growing production base in the Eagle Ford trend in Texas, and deepwater Gulf of Mexico and onshore Haynesville assets.

Following the acquisition, FCX renamed its newly purchased business as Freeport-McMoRan Oil & Gas.

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Photo by Roy Luck used under a Creative Commons license.
Stuart Hampton

British editorial veteran Stuart Hampton has been covering oil and gas companies for Hoover's since the Neogene-Quaternary period. Well, actually, since the early 1990s. For the best overview of the oil industry and its history he recommends Daniel Yergin's "The Prize." You can also follow Stuart on Twitter.

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