By TIMOTHY PUKO and GEORGI KANTCHEV: Feb. 8, 2016
News and information on Royal Dutch Shell Plc.
By TIMOTHY PUKO and GEORGI KANTCHEV: Feb. 8, 2016
By Ambrose Evans-Pritchard: 6:33PM GMT 05 Feb 2016
The global oil industry is caught in a self-feeding downward spiral as falling prices cause producers to boost output even further in a scramble to service $3 trillion of dollar debt, the world’s top watchdog has warned.
The Bank for International Settlements fears that a perverse dynamic is at work where energy companies in Brazil, Russia, China and parts of the US shale belt are increasing production in defiance of normal market logic, leading to a bad “feedback-loop” that is sucking the whole sector into a destructive vortex.
Katy Barnato: 5 FEB 2016
The global economy seems trapped in a “death spiral” that could lead to further weakness in oil prices, recession and a serious equity bear market, Citi strategists have warned.
Some analysts — including those at Citi — have turned bearish on the world economy this year, following an equity rout in January and weaker economic data out of China and the U.S.
“The world appears to be trapped in a circular reference death spiral,” Citi strategists led by Jonathan Stubbs said in a report on Thursday.
Barely a month after world leaders signed a sweeping agreement to reduce carbon emissions, the global commitment to renewable energy sources faces its first big test as the price of oil collapses.
Buoyed by low gas prices, Americans are largely eschewing electric cars in favor of lower-mileage trucks and sport utility vehicles. Yet the Obama administration has shown no signs of backing off its requirement that automakers nearly double the fuel economy of their vehicles by 2025.
Royal Dutch Shell Plc, Total SA and Statoil ASA, three of Europe’s biggest oil producers, were among more than 100 energy companies whose credit ratings were placed on review for possible downgrade by Moody’s Investors Service.
The reviews come after the rating company cut its oil-price forecasts and should for the most part be completed this quarter, Moody’s said in a statement on Friday. Prices may recover more slowly than companies expect and there is a risk they may fall further, it said.
By Royston Wild – Friday, 15 January 2016
Another day, another chance for further harrowing weakness across stock markets and commodity classes. And so it has come to pass.
Brent values fell even further below the $30 per barrel marker during Friday trade, marking fresh nadirs not seen since 2004. The benchmark has dropped more than 10% since the start of the week, and levels of $60 per barrel seen just six months ago seem a very, very long way away.
While fossil fuel plays (LSE: BP) and Shell (LSE: RDSB) have suffered fresh weakness as a result — the operators’ share prices are down 5% and 12% respectively since 2016 kicked off — I believe investors should resist attempting to pick up a bargain.
By CLIFFORD KRAUSS: A version of this article appears in print on January 7, 2016, on page B2 of the New York edition
The decline in the global Brent oil benchmark price to below $35 a barrel, the lowest level since the depths of the 2008-9 economic downturn and a decline of nearly two-thirds since summer 2014, helped push stock markets lower.
The Standard & Poor’s 500-stock index, the main benchmark for the United States stock market, declined 1.3 percent Wednesday and breached the psychologically important 2,000 level to close at 1,990.26.
By Mark Robinson: 29 December 2015
Midway through December, Chinese anti-trust regulators granted unconditional clearance to the proposed £47bn merger between BG Group
(BG.) Royal Dutch Shell (RDSB). The decision effectively removed the final regulatory hurdle, although the deal is still subject to shareholder approval at meetings that are expected to be convened on 27 and 28 January 2016, respectively.
With anti-trust strictures no longer an issue, you would imagine that final approval would amount to a formality, but some industry analysts have questioned whether the terms of the offer still represent fair value in light of reduced assumptions on energy prices through 2016. Spot prices for Brent crude are down by a third since the proposal was announced back in April, so it’s perhaps understandable that there are gathering reservations about the deal.
By Alan Oscroft – Thursday, 24 December, 2015
When the oil price slumped, the saving grace for BP and Royal Dutch Shell (LSE: RDSB) was dividends – both had the ability to keep paying dividends from other sources should earnings fall for a few years.
Royal Dutch Shell shares have fallen by 42% since their recent peak in May 2014, but that’s been offset to some extent by a 5.7% dividend yield last year and there’s a massive 7.7% expected for 2015. It’s still not a great overall performance, but compared to the way some smaller non-dividend oil stocks have fared, it’s almost heavenly.
LONDON | BY RON BOUSSO AND KAROLIN SCHAPS: Tue Dec 22, 2015 12:09 EST
Royal Dutch Shell (RDSa.L) said on Tuesday it planned to complete its proposed $53 billion takeover of BG Group (BG.L) by Feb. 15, outlining plans for further spending cuts next year in the face of low oil prices.
Shell also lowered the capital spending plan for next year for the combined group by $2 billion to $33 billion, saying it would bolster its ability to weather the industry’s downturn and to maintain dividend payments.
By Bloomberg News: December 15, 2015
Royal Dutch Shell Plc. is expanding its petrochemical venture in southern China with China National Offshore Oil Corp.
The two companies signed an agreement Tuesday to double the capacity of their equally held ethylene-cracking facility in Guangdong province to 2 million metric tons a year and add other chemicals units, Shell said in an e-mailed statement. The new facilities are expected to start operation in two years, it said, without providing a figure on the cost of the expansion.
BEIJING: Deals | Mon Dec 14, 2015 2:23am EST
China has given unconditional clearance to a proposed merger between Royal Dutch Shell (RDSa.L) and BG Group (BG.L), clearing the final key regulatory hurdle for the $70-billion tie-up, Shell said on Monday.
The clearance means the pre-conditional approval process is complete, the Anglo-Dutch company said in a statement.
Prior to the approval, industry sources told Reuters that Chinese authorities were pressing Shell to sweeten long-term gas supply contracts as the world’s top energy consumer faces a large surplus of the supplies as a demand boom at home falters.
By CLIFFORD KRAUSS: A version of this article appears in print on December 8, 2015, on page B1 of the New York edition
HOUSTON — Crude oil prices slid a further 5 percent on Monday to fall to their lowest levels since the 2009 global recession, pummeled by the fading chance that Saudi Arabia would cut production to halt the commodity’s yearlong slide.
In only 16 months global oil prices have collapsed from over $110 a barrel to less than half that, and the oil industry in the United States and around the world is reeling from its worst crisis since the late 1990s. On Monday, the American benchmark broke the $38-a-barrel mark, a price that makes drilling and completing wells a losing proposition in almost all oil fields around the country.
The oil major Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) is closing in on its biggest ever merger with the UK based oil and gas producer BG Group (OTCQX:BRGYY). On Wednesday, the Anglo-Dutch oil producer revealed that it has received a green signal from Australia’s Foreign Investment Review Board following an approval from the country’s anti-trust regulator received last month. The BG Group is one of the major players in Australia’s rising LNG sector where the company has invested more than $20 billion on developing the Queensland Curtis LNG plant.
Royal Dutch Shell CEO Ben Van Beurden addresses a keynote speech during the World Gas Conference in Paris on June 2, 2015. Photo Credit: ERIC PIERMONT/AFP/Getty Images)
Tim Daiss, CONTRIBUTOR: DEC 4, 2015
The proposed $70 billion Shell-BG Group mega deal, one of the largest energy deals in a decade, is now a reality, at least in Australia.
On Thursday, the Australian Foreign Investment Review Board (FIRB) gave the green light to the energy tie-up. The deal has already received regulatory approval in the US, EU and Brazil, while regulatory approval from Chinese authorities is still pending, but expected to be granted. The FIRB approval comes just two weeks after the Australian Competition and Consumer Commission (ACCC), the country’s competition regulator, approved the deal.
LONDON | BY RON BOUSSO: Bonds | Thu Dec 3, 2015
Dec 3 Royal Dutch Shell is seeking to secure a $7 billion credit facility in north America as back-up for its $70 billion acquisition of BG Group, sources said on Thursday.
U.S. bank JP Morgan Chase is arranging the facility, which will involve up to 20 banks and institutional investors, according to sources close to the matter.
The facility will be used as a “back-up” for funds already raised to finance the deal, according to one source.
By Ashley Armstrong: 03 Dec 2015
Shell’s £55bn takeover of BG has been cleared by Australia’s Foreign Investment Review Board, handing the deal its penultimate approval from global regulators.
The green light from FIRB for the deal comes after Australia’s competition authorities also approved the deal last month, and follows success with regulators in the US, EU and Brazil.
There has been mounting scrutiny of the rationale for pressing ahead with the takeover while oil prices remain so supressed.
Markets | Thu Dec 3, 2015 1:11am EST
By Sonali Paul
MELBOURNE, Dec 3 Royal Dutch Shell on Thursday won approval from Australia’s Foreign Investment Review Board for the company’s proposed $70 billion takeover of BG Group Plc, leaving China as the last regulatory hurdle to the deal.
The approval included an unusual condition designed to prevent disputes with the Australian Taxation Office (ATO) with the merged group, amid Australia’s push to clamp down on profit shifting and tax avoidance by multinationals.
By Rakteem Katakey: 30 November 2015
BG Group Plc’s discount to Royal Dutch Shell Plc’s takeover offer is the narrowest since the transaction was announced in April as the likelihood increases that the biggest oil deal of the decade will go through.
BG shares were 7.8 percent lower Monday than the price implied by Shell’s offer to buy the company, about half the discount reached in August. Shell has received approvals for three of the five preconditions to the acquisition, including one this month from Australia’s antitrust authority, meaning the window for some investors to cash in on the discount is starting to close, according to William Hares, a London-based oil analyst with Bloomberg Intelligence.
by Veselin Valchev: Monday, 30 Nov 2015, 10:13 GMT
Royal Dutch Shell Plc (LON:RDSA) is on track to settle all mandatory regulatory approvals for the proposed merger with smaller rival BG Group before the end of the year, paving the way for the final shareholder verdict.
According to sources close to the negotiations, both the Australian Investment Review Board and China’s ministry of commerce, whose approvals are mandatory for the deal to go through, are expected to give the thumbs-up before Christmas.
Chinese and Australian regulators are expected to give their blessing to Shell’s £55bn mega takeover of BG before Christmas, leaving the future of the deal resting squarely in shareholders’ hands.
The tie-up, which will create Britain’s biggest public company, has been under mounting scrutiny in recent weeks as the City questions whether Shell can justify pushing ahead, with oil prices remaining so suppressed.
However, the takeover will advance a major step towards completion in the coming weeks with the two sides anticipating clearance from China’s Mofcom regulator after the deal was passed into the final phase of its review process.
Trefis Team, CONTRIBUTOR: NOV 27, 2015
…the Chinese authorities reviewing the proposed Royal Dutch Shell – BG Group merger are reportedly urging Royal Dutch Shell to dole out concessions on long-term liquefied natural gas supply contracts with the country.
After getting an all-clear from the Australian completion authority last week, Shell now needs clearance from China and Australia’s Foreign Investment Review Board for the deal to close as planned in early 2016.
By Jessica Morris: 25 November 2015
Energy companies risk wasting $2.2 trillion (£1.46 trillion) on uneconomic projects over the next 10 years, according to a new report.
Think tank the Carbon Tracker Initiative’s (CTI) report how fossil fuel firms risk destroying investor returns says energy companies’ focus on fossil fuels at the expense of emerging clean technologies could put them out of kilter with environmental regulation, which will eventually dampen demand.
It comes ahead of next week’s Paris Climate Change Conference (COP21) which is expected to result in, or at least pave the way for, more climate change legislation.
Shell is suffering from declining reserves and some well publicised exploration failures such as in Alaska. BG has had its problems, but is just about to greatly increase production at one of the largest natural gas fields in the world off the coast of Brazil. There is a dash for gas around the world as governments increasingly shun coal-fired power stations.
In one fell swoop Shell can use its cash and balance sheet strength to return its dwindling reserves to growth, and underpin its dividend payments for the foreseeable future.
Royal Dutch Shell Plc (LON:RDSA) might have to shell out in order to get regulatory approval from Chinese authorities for its proposed takeover of fellow UK energy giant BG Group.
According to unnamed sources cited by Reuters, the Chinese ministry of commerce has requested that Shell review liquefied natural gas (LNG) prices in long-term supply contracts with the nation’s top energy companies – CNPC, CNOOC and Sinopec.
“It’s a reasonable request given the premiums Chinese and other Asian buyers are paying for long-term LNG versus those for Europe and America. The market is oversupplied, and this situation may well last through the next five to 10 years,” said a gas official with one Chinese state energy firm.
LONDON/BEIJING | BY RON BOUSSO, DMITRY ZHDANNIKOV AND CHEN AIZHU: Deals | Thu Nov 19, 2015
Chinese regulators vetting Royal Dutch Shell’s (RDSa.L) proposed merger with BG Group (BG.L) are pressing the Anglo-Dutch company to sweeten long-term gas supply contracts in a move that could cast new doubt over the near-term benefits of the $70 billion tie-up.
For China, the opportunity to re-negotiate existing liquefied natural gas (LNG) supply contracts with Shell, which combined with BG would supply around 30 percent of its imports by 2017, comes at an ideal time because the world’s top energy consumer faces a large surfeit over the next five years.
Angela Macdonald-Smith: Energy Reporter
East coast gas buyers left disappointed by the competition regulator’s unconditional approval for Royal Dutch Shell’s $US70 billion ($98 billion) takeover of BG Group have turned their attention to the Foreign Investment Review Board as they look for conditions to be put around the deal.
To the relief of Shell, the Australian Competition and Consumer Commission waved through the mega-merger on Thursday, which will align the oil giant’s undeveloped gas in Queensland – held in the Arrow venture with PetroChina – with BG’s $28 billion LNG export project in Gladstone.
Business News | London Mon Nov 16, 2015
Royal Dutch Shell plans to retain four members of BG Group’s executive team after the companies’ planned merger next year, according to an internal memo seen by Reuters on Monday.
The memo indicates that the planned $70 billion takeover of BG by Shell remains on track. Shell this month sought to ease investor concerns over the deal by announcing costs cuts and benefits that would make it work despite lower oil prices.
According to the Shell document, BG’s Chief Operating Officer Sami Iskander will become executive vice president for joint ventures. Executive Vice President for Global Energy Marketing and Shipping Steve Hill will be named executive vice president for gas and energy marketing and trading while BG General Counsel Tom Melbye Eide will become general counsel for upstream.
Royal Dutch Shell Plc (LON:RDSA) announced today that it has completed the sale of two assets from its downstream portfolio as part of its strategy to divest lower-margin businesses, as profits wane amid the depressed oil price.
The Hague-based oil major has completed the sale of its Butagaz liquefied petroleum gas (LPG) business in France to DCC Energy for €464 million (£332 million).
The sale follows a binding offer received by Shell in May, in addition to consultation with staff and regulatory approval, the company noted.
BG Group, which is due to be taken over by Shell early next year, has reported a slump in profits as the low oil price continues to take a toll on producers.
Net income at the Reading-based company fell 63pc to $280m (£182m) in the third quarter from $759m a year earlier. Nonetheless, this beat expectations, with some analysts pencilling in a result closer to $200.5m.
Including impairments, disposals and foreign exchange movements caused by the falling value of the dollar, BG recorded a loss of £101m.
Royal Dutch Shell Plc (LON:RDSA) carries hefty baggage and even if oil prices were to recover back to $100 per barrel, it would not solve all the firm’s problems, argued senior Morningstar analyst Stephen Simko.
Big bets on shale “destroyed huge amounts of capital” and the company has few growth assets, Simko said.
The notable exception is the potential addition of BG Group’s Brazilian operations, should the proposed merger complete successfully. BG’s interests in the Santos Basin are estimated to hold more than three billion barrels of recoverable oil resources and are projected to break even at only $30-35 per barrel.
As President Vladimir Putin tries to restore Russia as a major player in the Middle East, Saudi Arabia is starting to attack on Russia’s traditional stomping ground by supplying lower-priced crude oil to Poland.
At a recent investment forum, Igor Sechin, chief executive of Rosneft, Russia’s biggest oil company, complained about the Saudis’ entry into the Polish market. “They’re dumping actively,” he said. Other Russian oil executives are worried, too. “Isn’t this move a first step toward a redivision of Western markets?” Nikolai Rubchenkov, an executive at Tatneft, said at an oil roundtable Thursday. “Shouldn’t the government’s energy strategy contain some measures to safeguard Russia’s interests in its existing Western markets?”
Trefis Team, CONTRIBUTOR: 2 Oct 2015
Ever since announcing the $70 billion deal to acquire BG Group back in April, Royal Dutch Shell Plc. has been busy these last few months obtaining the required merger related approvals from various regulatory authorities. After obtaining the required clearances in Brazil, the U.S., and Europe, the process hit a snag in Australia. This is not surprising as Australia is significantly more affected by the deal in comparison to the other countries. We believe that the Australian competition authority could ask Shell to divest some of its holdings before giving the necessary clearance to the deal and the company could face similar demands from Chinese regulators as well. We also believe that Shell will agree to the conditions imposed (if any) as the company stands to benefit from the merger in the long run. The deal will allow Shell to consolidate its leadership position in the global Liquefied Natural Gas market and increase its exposure towards the exploration and development of deepwater hydrocarbon reserves, primarily the pre-salt reserves offshore Brazil.
Published by Joshua Noonan: September 27, 2015
With the declared April 2015 merger of Royal Dutch Shell and BG Group, formerly British Gas, a combination of assets spanning continents is occurring. The completion date of the merger in early 2016 has had some roadblocks. In Kazakhstan’s Karachaganak Field project, the combined group could lead to Shell to hold 29.5% by 2016. Despite this, the government of Kazakhstan may be blocking the transfer of shares.
The Karachaganak Field is a gas condensate field in northwestern Pre-Caspian Basin nearly one hundred miles east of Oral.The Field was discovered in 1979, with production starting in 1984. Upon independence, AGIP, currently Eni, and British Gas, now BG Group won exploitation rights. Thence, in 1997, Texaco (currently Chevron) and Russia’s Lukoil alongside the original signatories and two companies signed a production sharing agreement for forty years. BG Group and Eni possess 29.25% share a peace and Chevron has 18% and Lukoil has 13.%. Upon arbitration and a December 2011 acquisition, KazmunayGas purchased a 10% stake for two billion USD cash and one billion in non-cash consideration.
The slowing Chinese economy has impacted the overall world economy and various other sectors. According to a Moody’s Investor service report EMEA (Europe, Middle East, and Africa)’s mining sector is totally exposed to the economic crisis, followed by the oil and gas sector. Shipping, chemicals, and auto sector are considerably impacted while some other EMEA sectors including tobacco, telecoms, real estate, healthcare, and railways will be marginally impacted, since they are more regionally focused and their credit worthiness is not genuinely exposed.
Royal Dutch Shell (RDS.A, RDS.B) CEO Ben van Beurden has told investors privately that only “something cataclysmic” – i.e., “if people stopped using energy” – could derail the company’s planned takeover of BG Group (OTCPK:BRGXF, OTCQX:BRGYY), WSJ reports.
The episode is among the latest attempts by top Shell execs to sell investors worried that the deal may fall through; BG shares trade at a discount to the Shell cash and share offer, concerns that Australian and Chinese regulators could set high hurdles and, more broadly, that the persistently low oil prices could yet lead Shell to rethink the merger are dampening sentiment.
A look at valuations illustrates how regulatory concerns and stubbornly low energy prices have stoked investor anxiety over Royal Dutch Shell’s (RDSa.L) planned takeover of British rival BG Group (BG.L).
Hailed as an audacious and industry-changing merger when it was unveiled in April, the headline value of the deal has slipped from 47 billion pounds ($72 billion) to around 38 billion because of the lower price of Shell shares, which closely track oil prices.
Concerns that the Australian and Chinese regulators could set high hurdles and, more broadly, that the persistently low oil prices could yet lead Shell to rethink the deal are dampening sentiment. That has left BG shares trading at a discount to the Shell cash and share offer.
Wed Sep 2, 2015
The deal, which will help Shell compete better with world No. 1 oil major ExxonMobil (XOM.N), has already received the green light from regulators in the United States, Brazil and South Korea.
BG and Shell still require approvals from Australia’s anti-trust and foreign investment bodies and clearance from the anti-trust authority in China.
Crude prices have dropped more than 50% since the highs of June last year, following weak Chinese demand and a global supply glut. Oil companies are already feeling the heat and it will be a challenge for them to maintain dividends in the current scenario.
What is more, the past week saw further deterioration in the market, and the West Texas Intermediate (WTI) plunged into the high 30s following the devaluation of the Chinese yuan. Monday, August 24 saw a global market sell-off and almost all major indexes declined.
by Veselin Valchev: 26 Aug 2015
BG Group Plc’s (LON:BG) share price is sliding further away from the proposed offer by larger London-listed energy peer Royal Dutch Shell, signalling fading investor confidence that the deal will complete as planned, the Financial Times reported earlier this week.
BG’s share price had slipped 1.38 percent to 947.30p as of 14:01 BST today, underperforming the FTSE 100 which was flat. This compares with Shell’s proposed price of about 1,106p (383p in cash plus 0.4454 Shell B shares per BG share), equating to a discount of about 14.4 percent. At one point on ‘Black Monday’, traders cited by FT said that the spread widened to as much as 17 percent.
18 August 2015
BEIJING: Royal Dutch Shell has entered a framework deal with a Chinese energy firm to jointly purchase and distribute liquefied natural gas, Shell said on Tuesday, a rare cooperation between a global energy company and a local private player.
Shell signed the non-binding framework agreement with Guanghui Energy Co Ltd, which is building a gas receiving terminal in Qidong of Jiangsu province with a designed annual handling capacity of around 600,000 tonnes in its first phase.
Oil re-entered a bear market yesterday as the price for Brent Crude, the international benchmark, recorded its largest one-day loss since February.
On Monday, the oil price fell by six per cent and it has continued to dwindle, reaching $55.40 a barrel at around 8am BST today. The price of Brent has now fallen by more than a fifth since it hit a year-high of $69.63 a barrel in May. Bear markets are commonly defined as occurring when prices fall 20 per cent from their peak.
So what is causing the slide?
Shell’s £47bn plan to become the world’s biggest gas producer has moved a step closer to reality after the oil giant officially filed its takeover of BG Group with Brazilian competition regulators.
The second-biggest oil and gas deal ever on record still requires the blessing of a number of regulators across the world. Sources have already flagged potential hurdles could come from China’s notoriously opaque Ministry of Commerce (Mofcom) and Brazil’s beefed up authority, the Administrative Council of Economic Defence (CADE), as well as European regulators. The companies have indicated that they expect the deal to close by the first quarter of 2016.
Fri Jun 19, 2015
Gazprom (GAZP.MM) is building a global strategic alliance with energy major Royal Dutch Shell (RDSa.L) that will include asset swaps and allow the Russian gas giant to penetrate new markets, its chief executive told Reuters.
Gazprom, the world’s top gas producer, said on Thursday that Shell and its long-time gas buyers in Europe – Germany’s E.ON (EONGn.DE) and Austria’s OMV (OMVV.VI) – had agreed to build two new Nord Stream gas pipelines under the Baltic sea to Germany.
The U.S. has taken Russia’s crown as the biggest oil and natural-gas producer in a demonstration of the seismic shifts in the world energy landscape emanating from America’s shale fields.
U.S. oil production rose to a record last year, gaining 1.6 million barrels a day, according to BP Plc’s Statistical Review of World Energy released on Wednesday. Gas output also climbed, putting America ahead of Russia as a producer of the hydrocarbons combined.
The data showing the U.S.’s emergence as the top driller confirms a trend that’s helped the world’s largest economy reduce imports, caused a slump in global energy prices and shifted the country’s foreign policy priorities.
By Andrew Critchlow, Commodities editor:10:00AM BST 10 Jun 2015
Global energy consumption slowed to its slowest rate of growth since the late 1990s last year in what BP’s chief economist Spencer Dale has described as a “watershed” moment as production of oil outside the Opec cartel surged.
Total energy consumption growth slowed to just 0.9pc, while in China consumption growth slowed at the fastest rate since 1998, according to BP’s closely watched Statistical Review of World Energy.
Jun. 4, 2015 3:15 PM ET
Ever since Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) announced to acquire BG Group’s (OTCPK:BRGXF) natural gas assets and deep-water oil fields in a $70 billion deal, there have been concerns that the deal may be delayed, if not blocked, due to prolonged scrutiny from regulators around the world. While the deal could face potential hurdles in EU, Australia, China, and Brazil, I think it is unlikely to be blocked by any country. However, I think China is likely to raise majority of the concerns and therefore, I’m going to focus on China in this article.
Australian regulators are shaping up as one of the major hurdles for Royal Dutch Shell’s friendly $91 billion takeover of BG Group, with analysts tipping coal-seam gas sales may be needed for Shell’s plan to create a world-dominating LNG business to get through.
Credit Suisse analysts said the transaction between the energy giants should clear regulators in Brazil, where Shell wants BG’s deepwater Santos Basin, and the European Union, where both companies are domiciled.
Instead, Australia and China will be the main hurdles, potentially with conflicting views on the best way to structure a deal for their respective national interests, the investment bank said yesterday.
HOUSTON — The international cartel of oil producers has long followed the same basic strategy. When the market was soft, the group slashed production to raise prices.
But Saudi Arabia, the heavyweight of the Organization of the Petroleum Exporting Countries, has a new agenda. It is now less concerned about the price of crude oil in the global markets and more concerned about delivering fuel to its growing economy.
The shift is upending the traditional market dynamics that have influenced the direction of oil prices for decades.
By: MICHEAL KAUFMAN: Published: May 29, 2015
Royal Dutch Shell Plc’s (ADR) (NYSE:RDS.A) deal to acquire the UK-based BG Group (OTCMKTS:BRGYY) that is already at a risk of facing numerous obstacles, including volatility in the crude oil prices and a risk of a competitor outbidding Shell’s bid.
Meanwhile, when the deal is already hovering around such sensitive issues, the Financial Times (FT) has reported the latest hurdle that might hinder the course of the deal. This one is considered to be the biggest of all hurdles, the entry of China’s Ministry of Commerce (MOFCOM), termed as ‘black box’ by one of the competition lawyer, to conduct a regulatory scrutiny of the deal.