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Shell Says While Gas Is the Future, It Won’t Be Traded Like Oil

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At the moment, there is a global glut of natural gas…

Screen Shot 2016-08-29 at 22.18.50By Kelly Gilblom and Rakteem Katakey: August 30, 2016

Natural gas is rapidly becoming one of the most traded global commodities, but that doesn’t mean it will have a global price, according to Royal Dutch Shell Plc.

While the fuel can be transported anywhere on liquefied natural gas carriers, it will probably remain regionally priced for the time being, with some contracts continuing to track oil, said Roger Bounds, senior vice president for global gas at Shell. Prices will depend on location, regulation and infrastructure, as some countries replace coal in electricity generation to cut carbon emissions.

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The Future of Big Oil? At Shell, It’s Not Oil

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Screen Shot 2016-07-20 at 07.42.44The energy giant is shifting to gas as the industry adapts to climate change.

By Matthew CampbellRakteem Katakey and James Paton: 20 July 2016

At Australia’s Curtis Island, you can see Big Oil morphing into Big Gas. Just off the continent’s rugged northeastern coast lies a 667-acre liquefied natural gas (LNG) terminal owned by Royal Dutch Shell, an engineering feat of staggering complexity. Gas from more than 2,500 wells travels hundreds of miles by pipeline to the island, where it’s chilled and pumped into 10-story-high tanks before being loaded onto massive ships. “We’re more a gas company than an oil company,” says Ben van Beurden, Shell’s chief executive officer. “If you have to place bets, which we have to, I’d rather place them there.”

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Shell with a full tank of debt

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By JACK HOUGH: JULY 16, 2016

A dash of desperation is working wonders for module article chiclet Royal Dutch Shell. The price of Brent crude oil has fallen by half in two years, pulling Shell’s cash flow from operations well below what it typically needs to pay its dividend and fund exploration. Meanwhile, the purchase of United Kingdom gas specialist BG Group, completed in February, left Shell with a full tank of debt.

Something had to give. Investors braced for a dividend cut, which is why the American depositary receipts (ticker: RDS.B) started the year priced low enough to yield 8%. But rather than reduce its payout, Shell slashed spending on projects and sold low-return businesses. Last month, it announced a capital plan through 2020 that calls for more asset sales and a limit on capital spending.

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Uncertainty in the oil price war

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By Ed Crooks: JULY 15. 2016

“War is the realm of uncertainty,” wrote the great Prussian military theorist Carl von Clausewitz. “Three quarters of the factors on which action in war is based are wrapped in a fog of greater or lesser uncertainty.”

That applies to price wars every much as it does to the real kind. Almost from the moment crude began falling in 2014, news outlets started running confident-sounding claims that one side or another was winning the battle often depicted as a struggle between Saudi Arabia on one side and US shale producers on the other.

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Oil Is Still Heading to $10 a Barrel

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By A. Gary Shilling:JUNE 28, 2016 12:00 PM EDT

Back in February 2015, the price of West Texas Intermediate stood at about $52 per barrel, half of its 2014 peak. I argued then that a renewed decline was coming that could drive it below $20, a scenario regarded by oil bulls as unthinkable. But prices did fall further, dropping all the way to a low of $26 in February. Since then, crude rallied to spend several weeks flirting with $50 per barrel, a level not seen since last year. But it won’t last; I’m sticking to my call for prices to decline anew to $10 to $20 per barrel.

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Shell’s Ambitious Plan To Topple Exxon

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By Rakesh Upadhyay – Jun 22, 2016, 5:17 PM CDT

Ben Van Beurden, Chief Executive Officer of Royal Dutch Shell has laid out an ambitious plan to overtake ExxonMobil as the number one oil company in the world.

Prior to the 1990s, Shell was the leader in total shareholder returns, however, its rivals went on a deal-making spree to gain the lead, while Shell shied away from making any acquisitions. Now, Mr. Beurden believes that Shell will be able to regain its lost glory post the acquisition of the BG group.

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Bad news for fossil fuels

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By Ed Crooks: June 10. 2016

Two of the most widely respected energy analysts – BP’s economics team and the International Energy Agency – published reports this week, and both brought bad news for fossil fuel producers. They differed, however, in the focus of their gloomy perspectives. For BP, publishing its 65th annual Statistical Review of World Energy, it was coal that came off worst. As Spencer Dale, BP’s chief economist, put it in his presentation, “2015 was undoubtedly an annus horribilis for coal”. The shift to natural gas for power generation in the US gathered pace, and there was a second consecutive year of declining consumption in China.

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Shell sidesteps electric bandwagon with petrol-powered concept car

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BEIJING | BY JAKE SPRING: Fri Apr 22, 2016

Royal Dutch Shell PLC (RDSa.L) unveiled a high-efficiency petrol-burning concept car in China on Friday, to show the world’s biggest electric vehicle (EV) market that there is a lot of mileage left in conventional internal combustion engines.

Shell, one of the largest producers of automotive fuel, said it could take decades before EVs help arrest a rise in exhaust emissions, and that its concept car – which it has no intention of mass producing – demonstrates what can be done now.

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Exclusive: How ChemChina tried to gatecrash Shell’s BG mega-deal

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Screen Shot 2016-03-15 at 10.28.52LONDON | BY DMITRY ZHDANNIKOV, FREYA BERRY AND RON BOUSSO: Business | Tue Apr 19, 2016

Chemical giant ChemChina approached BG Group with a possible bid late last year, just as Royal Dutch Shell was preparing to close a $52 billion deal to buy the British energy company, seven banking and industry sources with knowledge of the matter said.

Working with investment bank HSBC (HSBA.L), China’s most acquisitive company of the past year flew a delegation to Britain in December and approached BG Chairman Andrew Gould with plans for a full cash bid, two sources close to ChemChina said.

Shell and HSBC declined to comment. ChemChina did not immediately respond to requests for comment. Reuters could not reach Gould for comment.

That trip was eight months after Shell announced the energy sector’s largest deal in a decade and just weeks before the BG purchase received final anti-trust and shareholder clearances.

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Sideways moves

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By Ed Crooks: April 1, 2016

Oil prices went sideways all week, with Brent crude edging up above $40 on Thursday.  Hedge funds have made record bets on rising crude prices, but everyone is still watching prospects for the scheduled meeting of Opec and non-Opec oil producers in Doha, Qatar on April 17. Qatar’s oil minister said 12 countries had so far agreed to attend, including most Opec members and Russia. Reuters provided a useful factbox on the countries that could be present at the meeting.  Ecuador is one of the Opec members trying to persuade non-member countries to join in a commitment to freeze production.

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Royal Dutch Shell Limiting Investment in Chinese Shale Gas

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By Muhammad Ali Khawar on Apr 3, 2016

Royal Dutch Shell plc. (ADR) (NYSE:RDS.A) unlike BP plc. (ADR) (NYSE:BP) is looking less enthusiastic for the exploration and production of shale gas. As reported by Bloomberg, Shell has indicated that it is not pursuing with the development of the Fushun-Yongchuan shale gas block in the China’s Sichuan province.

The news comes following BP and China National Petroleum Corporation (CNPC) latest deal for shale gas exploration in the country. Both the parties signed a production sharing contract (PSC) for shale gas exploration, development, and production in China’s Nejiang-Dazu block in the Sichuan basin.

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Australian Energy Giant Woodside Delays Large Offshore L.N.G. Project

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By STANLEY REED: A version of this article appears in print on March 24, 2016, on page B2 of the New York edition

Woodside Petroleum and its partners, including the energy giants Royal Dutch Shell and BP, have decided to delay indefinitely the development of a huge liquefied natural gas project off Western Australia, the company said on Wednesday.

The decision to postpone the project, called Browse, comes as L.N.G. prices in Asia have fallen by around two-thirds since 2014. The slump is attributed to a supply glut set off largely by a building boom and by lower-than-expected demand from major customers like China.

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CNOOC and Shell take final investment decision to expand petrochemical complex in China

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TUESDAY, MARCH 22, 2016

China National Offshore Oil Corporation (CNOOC) and Shell Nanhai B.V. today announce the final investment decision to expand CNOOC and Shell Petrochemical Company’s (CSPC) existing 50:50 joint venture (JV) in Huizhou, Guangdong Province, China. This decision follows the announcement of a Heads of Agreement in December 2015 between the two partners. Subject to regulatory approvals, CNOOC and Shell have agreed that CSPC should take over CNOOC’s ongoing project to build additional chemical facilities next to CSPC’s petrochemical complex.

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Shell’s credit rating cut from AA to AA- following £36bn takeover of gas giant BG Group

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By RUPERT STEINER FOR THE DAILY MAIL19 February 2016

Royal Dutch Shell has seen its credit rating slashed following its £36billion takeover of gas giant BG Group.

The credit score of the FTSE 100 oil company – a barometer of its financial strength – was lowered by Fitch from AA to AA-.

Ratings agency Fitch said its outlook on Shell was ‘negative’ in a sign a further cut could follow.

Shell used some of its cash reserves to fund the takeover of BG. Following the completion of the mega-deal on Monday, Shell plans to sell £20billion of assets in the next three years.

However, Fitch warned it downgraded its view on the company because Shell (down 26.5p to 1560.5p) had ‘materially missed the targeted level’ of sell-offs so far. 

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Oil Prices Slide Again as Oversupply Fears Persist

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By TIMOTHY PUKO and GEORGI KANTCHEV: Feb. 8, 2016 

Oil prices dropped back below $30 Monday amid continuing fears about the global oversupply of crude. A Sunday meeting between Saudi Arabia and Venezuela ended without any plans for production cuts, damaging hopes that the world’s major exporters will cooperate on output cuts. Data from Barclays also suggested softer demand from the world’s largest consumers, the U.S. and China.

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Oil market spiral threatens to prick global debt bubble, warns BIS

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By Ambrose Evans-Pritchard6:33PM 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.

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Oilmageddon

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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.

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Climate Deal’s First Big Hurdle: The Draw of Cheap Oil

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By CLIFFORD KRAUSS and DIANE CARDWELLA version of this article appears in print on January 26, 2016, on page A1 of the New York edition

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.

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Oil Rout Prompts Moody’s to Consider Shell, Total for Downgrade

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Screen Shot 2016-01-22 at 12.08.33Moody’s will also review the ratings of two U.S. refining joint ventures linked to Shell, Motiva Enterprises LLC and Deer Park Refining LP.

By Mikael Holter and Rakteem Katakey: Bloomberg.com: 22 JAN 2016

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.

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Why Buying BP plc & Royal Dutch Shell Plc Is Utter Madness!

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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.

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Oil Prices Decline More Than 5 Percent as Stockpiles Increase

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By CLIFFORD KRAUSSA version of this article appears in print on January 7, 2016, on page B2 of the New York edition

HOUSTON — Oil prices plunged again on Wednesday by more than 5 percent as investors paid more attention to signs that global stockpiles are growing than to increasing instability in the Middle East and North Africa.

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.

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Further doubts over Shell/BG deal

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Screen Shot 2015-12-23 at 09.03.45…the deal doesn’t make financial sense unless Brent crude is sustained at around $60 a barrel.

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.

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Will Royal Dutch Shell Plc’s Dividend Be Slashed In 2016?

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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.

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Shell plans to complete BG merger by Feb. 15, cuts spending plan

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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.

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Shell to Expand CNOOC Petrochemical Venture in Southern China

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Screen Shot 2015-11-20 at 08.55.47By 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.

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Shell says China clears merger with BG

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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.

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OPEC Won’t Cut Drilling, and Prices Plunge 5%

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By CLIFFORD KRAUSSA 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.

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Shell Has Underperformed, But It Could Be The Only Oil Major That Emerges Bigger From The Downturn

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Screen Shot 2015-11-20 at 08.55.47…the company’s profits plummeted 70% from last year to $1.77 billion…

Sarfaraz A. Khan: Sunday, Dec 6, 2015

Summary

  • The oil major Royal Dutch Shell is closing in on its biggest-ever merger with the UK based oil and gas producer BG Group.
  • Shell has been the worst performing stock in its peer group and now offers an above average yield of 7.8%.
  • But Shell is generating enough cash from operations and asset sales to cover its spending.
  • More importantly, Shell could be the only oil major that emerges even bigger from the downturn.

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.

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Gas Wars Down Under Finally Come To An End: Shell-BG Group Tie-Up Gets Green Light

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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.

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Shell seeks $7 bln credit facility ahead of BG deal -sources

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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.

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Shell wins final Australian approval for BG Group takeover

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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.

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Markets | Thu Dec 3, 2015 1:11am EST

  • Deal still needs approval from China
  • Shell says deal on track to be completed in early 2016
  • Australia imposes condition to prevent tax disputes 

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.

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Biggest Oil Deal’s Risk Narrows to Record as Shell Pushes Ahead

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By Rakteem Katakey: 30 November 2015

  • BG’s shares are at smallest discount to Shell’s offer price

  • Takeover received Australia antitrust approval this month

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. 

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Sources claim BG merger could be okayed by year-end

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by Veselin ValchevMonday, 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.

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Shell-BG deal to win green light

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Questions have been raised about the growing gulf between the price of BG shares and Shell’s cash and stock offer, while some market sources have argued that the low oil price could force Shell to renegotiate the deal and reduce its bid.

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Regulators in China and Australia likely to support move to create Britain’s biggest company

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.

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Complications Grow For Shell-BG Deal

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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.

SOURCE

Royal Dutch Shell, Exxon Mobil and Glencore: Energy companies risk wasting trillions on uneconomic projects

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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.

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Questor share tip: Shell should walk away from BG

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The FTSE 100 oil major has endured a turbulent year after announcing its offer for rival BG, says Questor.

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By John Ficenec, Questor Editor: 22 Nov 2015

SHELL’S [LON:RDSB] deal to buy gas group BG makes perfect sense on paper. But if oil prices remain at these deeply depressed levels, then it could bring nothing but disaster.

The famous Shell dividend could be cut, investors will be diluted and the shares would become a riskier prospect.

Deal logic

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.

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China wants LNG supply concessions in return for BG merger approval, sources say

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Beijing holding a “wonderful piece of leverage”

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by Veselin ValchevFriday, 20 Nov 2015

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.

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In Shell-BG review, China wants concessions on huge gas deals

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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.

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ACCC clears Shell’s $98b takeover of BG Group

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To the relief of Shell, the Australian Competition and Consumer Commission waved through the mega-merger on Thursday…

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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.

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Shell plans to retain four senior BG executives after merger – memo

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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.

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Shell share price: Oil major sells downstream assets

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by Veselin ValchevMonday, 02 Nov 2015

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.

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BG Group profits drop as it nears merger with Shell

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By Jon Yeomans: 30 Oct 2015

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.

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Shell share price: Company’s problems extend beyond oil prices, analyst says

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Screen Shot 2015-10-27 at 12.33.24Big bets on shale “destroyed huge amounts of capital” and the company has few growth assets…the firm is far more likely to remain a laggard than become a leader among the oil majors for the rest of this decade…

by Veselin Valchev: Tuesday, 27 Oct 2015

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.

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Saudi Arabia’s Oil War With Russia

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By Leonid Bershidsky: Oct 16, 2015

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?”

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Shell-BG Deal Could Face Regulatory Sanctions, But Shell Will Do Everything It Can To Save Deal

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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.

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Merger of Royal Dutch Shell and BG Group

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Published by Joshua NoonanSeptember 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.

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Here’s How Royal Dutch Shell plc And BP plc Will Be Impacted By A Weak Chinese Economy

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Bidness Etc discusses how European oil majors are impacted by the slowdown in the Chinese economy

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By: Micheal KaufmanSep 25, 2015

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.

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Shell CEO says only ‘something cataclysmic’ could stop BG deal

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Sep 9 2015, 14:43 ET | By: Carl Surran, SA News Editor

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.

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