Concern over its oil division has prompted heavyweight US broker Citigroup to remove its buy rating from BHP Billiton (LON:BLT).
Now at neutral with a target price of 1,350p, the broker says that even with a pick-up in production this year the Anglo-Aussie giant is still facing an oil production/price headwind.
In April, the poor performance of the oil division prompted a call from US activist investor Elliott Advisors for it to be sold off.
Elliott, which has a 4.1% stake in BHP, launched another broadside at the company yesterday over its plans to build a new potash mine in Canada.
The Jansen project in Saskatchewan could end up being as costly as BHP’s move into the US shale business, said Elliott, which it said cost US$30bn to establish but was eventually sold for US$6.5bn.
Jansen is predicted to cost around US$4bn, but some reports have suggested the final bill will be three times that.
READ: BHP Billiton's iron ore output up, but copper and US petroleum production weaker
“We share the deep concerns raised by analysts and shareholders that expanding into potash could be a severe strategic misstep,” a spokesman for Elliott told the Telegraph.
BHP has previously said potash was an essential ingredient in fertiliser and demand can double by 2040.
Citibank, meanwhile added rival Rio Tinto PLC (LON:RIO) was a better bet currently than BHP for iron ore and aluminium exposure.