Copper giant Freeport pushes into US oil and gas

Global copper giant Freeport-McMoRan announced Wednesday a major push into the US energy sector with the purchase of Plains Exploration & Production and McMoRan Exploration for $9 billion. The US miner, with its key asset the massive Grasberg copper and gold mine in eastern Indonesia, said the deals will turn it into "a premier US-based natural resource company." Freeport-McMoRan Copper & Gold will pay $6.9 billion in cash and stock for Plains, and a net $2.1 billion for McMoRan, in which both it and Plains already hold 36 percent. Freeport said the takeovers would make the Phoenix, Arizona-based company into a diversified resources group worth some $60 billion. "The oil and gas assets being acquired possess the asset quality characteristics that we seek in our mining business -- large-scale assets with long lives, low cost and geologic potential to support growth through exploration and development," said Freeport chief executive Richard Adkerson in a statement. "The transaction will add a high-quality portfolio of assets with strong current cash flows, significant growth options and complementary exposure to markets positioned for global growth in the developed and developing world and reflects our positive view of the factors that will drive demand for copper and other commodities." Plains owns oil production in California, Texas, Louisiana and in deep water offshore in the Gulf of Mexico. McMoRan (MMR), which was originally spun off from Freeport in 1994, is exploring shallow-water gas fields in the Gulf of Mexico and in Louisiana. "The MMR portfolio is expected to provide a large, long-term and low cost source of natural gas production," Freeport said.