Freeport-McMoRan Copper & Gold will diversify its interest and with a move that leads it back to energy roots of Freeport with the completion of two oil business deals worth about $20 billion.

The Financial Times reported that Freeport-McMoRan, a mining company with significant copper and molybdenum interests, is buying Plains Exploration and Production and McMoRan Exploration. The deals value the equity of Plains at about $6.9 billion in cash and stock and McMoRan Exploration at about $3.4 billion in cash.

The merged company will make about 74 percent of next year’s earnings before interest, depreciation and tax from mining and the remainder from oil and gas.

Freeport has roots as an energy producer. The move marks a change in strategy for the company, creating a natural resources conglomerate with an enterprise value of about $60 billion, including debt.

Plains has oilfields in California and the Eagle Ford shale of Texas, and last month bought a package of fields in the Gulf of Mexico from BP for $5.5 billion.

McMoRan Exploration, an oil and gas company that was spun out of Freeport in 1994, has been pioneering drilling at extreme depths below sea level in the shallow waters of the gulf. The technique has not yet yielded commercially attractive results but is believed to offer great potential for future production.

Richard Adkerson, Freeport’s chief executive, said the deal would create a group with “complementary exposure to markets positioned for global growth in the developed and developing world.”

Adkerson added that the deal would not diminish the company’s focus on safe and efficient mining operations and executing its organic growth projects.

Freeport and McMoRan have kept close ties since their split. James “Jim Bob” Moffett is chairman of Freeport, and chairman and chief executive of McMoRan Exploration. Freeport and McMoRan Exploration also share an office building in New Orleans.

Plains owns a 31.5 percent stake in McMoRan Exploration while James Flores, chief executive of Plains, sits on McMoRan’s board.

Freeport is the world’s largest publicly traded copper producer but was once a diversified conglomerate with substantial oil and gas operations, before selling those assets to focus on mining. Freeport reported revenues of $4.4 billion for the three months to September 30.

Freeport’s copper operations generate ample cash, said an industry expert, and the miner has been looking for ways to reinvest profitably. However, expanding the company’s copper operations could increase the group’s exposure at a time when ailing economic growth in China and a series of large new copper projects are damping the outlook for the price of the metal. The miner’s management has long been interested in oil and gas, another industry source added.

Industry observers said that the deals could surprise some shareholders, however. The biggest global mining groups have come under pressure to return money to shareholders, rather than invest excess funds in ambitious new projects.

Freeport in October reported weaker-than-expected third-quarter earnings, as the recovery in production and sales at its Grasberg copper and gold mine in Indonesia proceeded more slowly than expected. The miner was also forced to halt operations at Grasberg last year due to strikes and suffered labour problems at its Cerro Verde mine in Peru.