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Posts under ‘Shell BP Merger’

Oil Price Bust Foreseen: Is Jesse Colombo a bone fide time traveler?

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“Time travel has captured the public imagination for much of the past century, but little has been done to actually search for time travelers. Here, three implementations of Internet searches for time travelers are described, all seeking a prescient mention of information not previously available.”

Perhaps Shell or BP may decide to hire Mr. Colombo and ask him about the timing of a mega merger, bearing in mind that he seems to know more about the oil industry than them? 

By John Donovan

A few days ago I published an article about Jesse Colombo, the economic analyst who correctly and uniquely, predicted the oil prices bust, which has an impact on every individual and country on the planet.

The collapse in oil prices might not be as highly ranked as the 9/11 terror attack in terms of an historic event, but it is of world-changing significance.

I found the Jesse Colombo article from June 2014 containing his prescient prediction published on the Forbes.com website.

This was in the course of carrying out some research into why the predictions of one of the worlds biggest oil companies, Royal Dutch Shell, has been so wildly inaccurate in regard to oil issues, such as when peak oil will occur. Shell has a “scenarios” team tasked with peering into the future with the objective of coming up with accurate forecasts. I wonder if they have foreseen their own future, which might be short as far as Shell is concerned? read more

Senior Sources See Merit In Shell BP Mega Merger

Screen Shot 2014-10-28 at 12.29.57“…the tumbling commodities price has meant that takeover chatter has spread to even the fantasy realms of BP and Shell. Once considered unthinkable, senior sources are now saying that there is merit in doing the colossal deal…”; “Companies will not be able to continue with business as usual and must either cut back on expensive exploration plans or cut their dividends, or both…” 

Major article by Ashley Armstrong published on page 5 of The Sunday Telegraph Business Section on 28 December 2014 under the headline:

“PIECES ON THE BOARD”

Extracts

One huge driver of dealmaking next year is expected to be the slump in commodity prices and with mining and natural resources companies accounting for 20pc of all London-listed companies a wave of merger mania can be expected in the City.

Oil prices that have slumped by 40pc since June to around $60 a barrel mean that “some resource companies are now uneconomical at best and at worse have unfeasible business models,” one dealmaker said.

“Companies will not be able to continue with business as usual and must either cut back on expensive exploration plans or cut their dividends, or both,” said Neil Passmore, chief executive at Hannam & Partners. read more

Oil executives predict wave of mergers: players to divide into predators and prey?

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“Executives predict a wave of mergers not seen since 1998, the last time the oil price suffered a precipitous and sustained fall.”

Extracts from a Danny Fortson article published on the front page and page 6 of The Sunday Times Business Section on 28 December 2014 under the headline:

“Oil explorers left high and dry by crude crisis”

How times change. Three years on, Afren, like many of its rivals, is on the ropes thanks to the halving of the oil price from its July high of $114 a barrel to $61. The drop has unleashed chaos in the markets as once-swashbuckling explorers find themselves buckling under debts they took on when the market was booming and with investors, already nursing heavy losses, who are unwilling to bail them out.

Executives predict a wave of mergers not seen since 1998, the last time the oil price suffered a precipitous and sustained fall.  read more

5 YEARS BEFORE OIL RETURNS TO $100 PER BARREL?

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Screen Shot 2014-02-18 at 18.34.00By John Donovan

The Trefis Team has published an extensive, highly informative article under the headline:

“Where Are Oil Prices Headed In The Long Run?”

It takes many factors into account before forecasting that annual average crude oil prices are likely to continue to decline in the short to medium term and bottom out by 2017, to reach $100 per barrel again by 2020.

This expert analysis will not be well received by Big Oil, its employees or Putin.

FULL ARTICLE

We can expect to see many more news reports like this one:

Chevron Withdraws From A Multi-Billion Dollar Project In Ukraine

US energy giant Chevron has informed Ukraine about its decision to pull out of a $10 billion shale gas exploration project. This comes as a big blow to the already war-torn economy of the country. The withdrawal of the project came a few months after Royal Dutch Shell also withdrew from a multi-billion dollar exploration project in the country. read more

Will 2015 Be The Year Of The Mega-Merger?

By John Donovan

Rupert Hargreaves of The Motley Fool raises the prospect in an article published today of potential mega-mergers in 2015, including a merger between Royal Dutch Shell and BP.

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He covers much of the same well-trodden ground in relation to Shell BP as in a flurry of recent articles by excited journalists, before concluding that a merger is unlikely, but not beyond the bounds of possibility.

Extract

Overall, then, there could be too many risks, uncertainties and hurdles to jump over for a deal between Shell and BP to go ahead. That being said, if the price is right, I’m sure Shell’s management would figure out a way to make the deal work so I wouldn’t rule out a deal completely. read more

Royal Dutch Shell BP Plc

Screen Shot 2014-10-28 at 12.29.57What’s next for Royal Dutch Shell? Is a multi-billion merger with BP just around the corner?

Article by Alessandro Pasetti published by The Motley Fool 8 Dec 2014

What’s next for Royal Dutch Shell? Is a multi-billion merger with BP just around the corner? Takeover rumours in the oil industry often emerge when oil prices weaken, and this time is no different. A Shell/BP tie-up would have to be financed by Shell equity, and is unclear why BP shareholders would want to hold Shell stock right now, unless a big premium were offered. Regulatory hurdles won’t be easy to overcome, which heightens execution risk. If Shell risks a multi-billion takeover, its shareholders could be the ultimate losers at a time margins are strained, the cost of extracting oil and gas is on its way up, and a few projects are pushed back or cancelled. read more

Oil price slump could trigger a wave of takeovers and mergers of desperation

Screen Shot 2014-10-28 at 12.29.57The author of The Sunday Times article, Danny Fortson, goes on to point out that the oil price slump could lead to a wave of big takeovers, failures and “mergers of desperation,” with BP a potential takeover target…

By John Donovan

Coverage of the problems facing BP are spread over a number of pages of The Sunday Times Business section today.

Screen Shot 2014-12-08 at 16.07.22BP is responding to the fall in oil prices by slashing middle management and freezing projects that were based on an assumption that oil prices would remain at around $100 a barrel. Shell is likely to do the same.

The most prominent article, by Danny Fortson, describes BP’s involvement with the Putin regime as playing Russian roulette. He goes on to point out that the oil price slump could lead to a wave of big takeovers, failures and “mergers of desperation,” with BP a potential takeover target (also as a consequence of the Gulf spill). read more

Authorities likely to wave through a Shell BP merger

Screen Shot 2014-10-28 at 12.29.57EXTRACTS FROM A FORBES.COM ARTICLE BY TIM WORSTALL PUBLISHED 6 DECEMBER 2014

If Royal Dutch Shell Buys BP Should The Authorities Ban The Purchase?

There’s interesting (and fun!) rumors floating around the London market that Royal Dutch Shell might attempt to purchase BP. These sorts of mergers (or takeovers) aren’t unusual in a commodity business like oil at a time of weak prices.

Here’s the story swirling around:

One of Britain’s oldest oil companies BP could be about to be sold to its biggest rival for a fiver per share.

The rumoured deal, if realised, would complete one of the most ignominious falls for the once great Persian Oil company that powered Britain’s Navy to victory during the First World War. read more

BP a sitting duck

Screen Shot 2014-10-28 at 12.29.57The rumours that surfaced earlier this week that Shell might be taking a closer look at BP are not that ridiculous and in the current climate of lower oil prices and falling profits they actually make perfect sense. The first reason is that BP looks like a sitting duck.

THE TELEGRAPH

Why Shell could buy BP for just £5 a share

One of Britain’s largest and oldest oil companies BP could be about to be sold for just £5 per share

By John Ficenec 05 Dec 2014

One of Britain’s oldest oil companies BP could be about to be sold to its biggest rival for a fiver per share.

The rumoured deal, if realised, would complete one of the most ignominious falls for the once great Persian Oil company that powered Britain’s Navy to victory during the First World War.

BP is now a sitting duck after the Gulf of Mexico disaster, Russian sanctions and the falling oil price combined to drive down the share price to £4.25. Analysts estimate the deal could be done if rival Shell offers a 16pc premium to that price, or about £5, to seal one of the biggest corporate takeovers in the history of the oil industry. read more

Shell BP: Return of the megamerger?

Screen Shot 2014-10-28 at 12.29.57Shell talked internally and with bankers about merging with BP and BG Group PLC, said people involved in those talks. Such deals are complicated, but also offer the most potential upside, said Oppenheimer’s Mr. Gheit, because of potentially economies of scale.

 (FROM THE WALL STREET JOURNAL: FRIDAY 5 DECEMBER 2014)

Will Cheap Oil Lead To A New Merger Wave?

By Justin Scheck and Shayndi Raice

When oil prices hit a trough, history points to a likely energy industry response: mergers and acquisitions.

Price crashes in the early 1980s and late 1990s sparked a rash of deal-making that reshaped the industry. A decline in the mid-2000s led the giant firms to pick up smaller companies. Now, with oil’s price down 40% since June, bankers and investors are hoping for a repeat.

Traders are betting on it: BP PLC shares jumped by close to 5% Tuesday after an anonymous Twitter user claimed rival Royal Dutch Shell PLC was going to make a bid. Spokesmen for BP and Shell declined to comment. read more

Prospects of a Shell BP merger

Screen Shot 2014-10-28 at 12.29.57FROM A REGULAR CONTRIBUTOR

Firstly, falls in oil price and resulting low stock prices tend to result in waves of takeovers.

Examples during the low price era of the late 1990s – early 2000s:

· Exxon took over Mobil
· Statoil took over Saga, Norsk Hydro
· Chevron took over Texaco, Unocal
· Total took over Fina and Elf
· BP took over Vastar, Amoco and Arco

Shell is notably absent from this list – over the past ten years the gossip on the street has considered possible mergers involving Shell, BP and Total and even the demerger of Shell Oil, but the numbers apparently did not add up. Perhaps the fall in share prices over the past six months and a lack of exploration opportunities has once again made mergers more attractive than organic growth. read more

American as Chairman Good Politics for Shell

Screen Shot 2014-10-30 at 11.28.57From a Regular Contributor

I see Shell got an American as its new chairman.

(Chad Holliday right).

Not certain that is good news for the shareholders, although it is clearly good politics.

Shell needs extensions to its leases in the Arctic and with an American arguing the issue they might succeed.

If he saves Shell’s $6 billion investment he will have earned his salary.

Shell also knows there is a bunch of oil and gas in those structures they want to drill. And so the rumors of a Shell/BP merger are not to be dismissed. A merger would give Shell BP’s interest in Alaska, unless the USG objected. read more

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