BHP boss gives up bonus

BHP chief executive Marius Kloppers today became the latest FTSE 100 mining boss to forgo his bonus after being forced to write $2.84 billion (£1.8 billion) off the value of a US shale gas business he bought at the top of the market.

Kloppers, who received about $4.7 million of bonuses in cash and deferred shares last time, said he and petroleum division head Mike Yeager would not take any bonus in the year to June 30, 2012.

He was forced to write down the value of BHP’s Fayetteville shale gas assets in Arkansas by more than half, just 18 months after buying them for $4.75 billion, as growing competition roughly halved US gas prices and increased the cost of labour and equipment.

Kloppers also cut the value of the group’s Nickel West business in Western Australia by $450 million as nickel prices plummet on concerns about growth in Europe, the US and China.

The decision to waive his bonus comes after Rio Tinto boss Tom Albanese said in February that his FTSE 100 mining giant was taking a $8.9 billion charge against its Alcan aluminium business, which it bought for $38 billion in 2007. Albanese and Guy Elliott, his chief financial officer, waived their bonuses for the year.

BHP’s writedown comes days after BP and BG Group separately announced hefty write-offs on their own US shale gas assets, again hit by the growing popularity of fracking, or hydraulic fracturing — a process where gas is released from rocks by blasting a mixture of sand, water and chemicals into it.