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Shell Betting Its Future On LNG

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Screen Shot 2015-04-08 at 08.12.04Article By Nick Cunningham published Sun, 12 April 2015 by

Shell Betting Its Future On LNG

Could the largest energy deal in over a decade begin a new wave of mergers and acquisitions? Is LNG really the future? How Will ExxonMobil Respond? And perhaps more importantly, does the mega-deal between Royal Dutch Shell (RDS.A) and BG Group (LON: BG) portend the end of the bear market for oil?

Shell announced on April 8 that it agreed to buy BG Group for an eye-popping $70 billion.

The move was surprising, in the sense that a lot of companies in recent years have reined in their spending on high-cost projects outside of North America. Shell, in the midst of its own two-year $15 billion divestment campaign to shed unwanted assets, was thought to be trying to make itself leaner and meaner. Having passed on the U.S. shale revolution, it is interesting that Shell’s big splash once again avoided North America.

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Shell And BG Group: Strong Strategic Fit, But Additional Financial Risks Ahead

Article by Pim Keulen published 12 April 2015 by Seeking Alpha 

Shell And BG Group: Strong Strategic Fit, But Additional Financial Risks Ahead

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  • Shell announced the acquisition of BG Group for the amount of $69 billion.
  • From a strategic point of view, the deal seems to make perfect sense.
  • From a financial point of view, the deal has a long-term horizon with accompanying risks.
  • It will come down to management’s capabilities to deliver the outlined financial metrics in order to make this deal work for shareholders.

Last week, Royal Dutch Shell (RDS.A, RDS.B) announced the acquisition BG Group (OTCPK:BRGXF) for a total sum of $69 billion. Despite heavy M&A activity, this deal is the largest M&A deal announced this year. Both analysts and contributors on Seeking Alpha have discussed the metrics of Shell’s acquisition. However, the reactions are somewhat mixed. As I cover Shell on a regular basis, I would like to share my point of view regarding the BG Group acquisition.

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Kashagan to Start Production in 2017, Says Royal Dutch Shell Report

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ASTANA – Production at Kazakhstan’s giant Kashagan offshore oil field is expected to restart in 2017, Royal Dutch Shell stated in its 2014 annual report.

“After the start of production from the Kashagan field in September 2013, operations had to be stopped in October 2013 due to gas leaks from the sour gas pipeline. Following investigations, it has been decided that both the oil and the gas pipeline will be replaced. Replacement activities are ongoing, with production expected to restart in 2017,” page 27 of the annual report, released on March 12, said.

After sour gas leaks forced production to halt soon after it began in late 2013 – already years behind the original schedule – predictions as to when the project would actually produce have been repeatedly made and then pushed back, and even in late January of this year, Energy Minister Vladimir Shkolnik was announcing that Kashagain would come online in late 2016.

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RTE failed to truthfully inform the public on Corrib Gas Project

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Screen Shot 2015-04-13 at 08.21.21– Shell to Sea send submission on RTE’s Public Service Statement —

12 April 2015

RTÉ – Ireland’s National Television and Radio Broadcaster

Shell to Sea have today sent in a submission to RTE as part of RTE’s public consultation on the updating of their Public Service Statement [1]. In the submission, Shell to Sea claimed that RTE had failed to inform the public in an honest and balanced manner on the Corrib Gas project.

In the submission nine examples of RTE bias over the course of the more than decade long community campaign against the Corrib Gas project were highlighted.

One of the examples given related to the so-called “Garda Rape tape” over which RTE were forced by the Broadcasting Authority of Ireland (BAI) to issue an apology, after a news item broadcast on July 28th 2011 was deemed by the BAI to be “inaccurate”, “unfair” and “harmful” to a Corrib campaigner. This related to Gardaí being inadvertently recorded joking about threatening to rape the two women who were in their custody. At the time of the incident the Garda Commissioner acknowleged the incident had happened and apologised for the incident occurring. Despite this RTE subsequently attempted to create the impression that the recording of the incident had been “altered” or “tampered with”. [2]

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Oil price down, coffers full: now Big Petroleum is in the mood for mergers

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The energy sector looks set for a round of mergers and acquisitions. Illustration: David Simonds for the Observer

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The world of Big Oil looks set for another round of mega-mergers and acquisitions after Shell set the ball rolling this week with its $70bn agreement to take over BG.


Shell paid too much to buy BG Group


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On April 8, Royal Dutch Shell (RDS.A) (RDS.B) (RDSA) (RDSB) announced its intention to acquire BG Group (BRGYY) (BG.) in a $70 billion cash-and-stock deal that values BG’s equity at GBX 1,350 per share, or 11% above our GBX 1,200 fair value estimate for BG at the time the deal was announced.

The deal will be roughly 70% stock and 30% cash, and it’s expected to close in early 2016. Our BG thesis has been that near-term execution problems and political issues in Brazil and Egypt were creating an attractive entry point for long-term investors.

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BP left stranded by US vilification as rejuvenated Shell storms ahead

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Screen Shot 2015-04-09 at 22.49.19Article by Jeremy Warner published 12 April 2015 by The Sunday Telegraph 

BP left stranded by US vilification as rejuvenated Shell storms ahead

They say that fortune favours the brave. Ben van Beurden (right), chief executive of Royal Dutch Shell, will be hoping they are right, for by firing the starting gun on a new wave of oil industry consolidation with an audacious £47bn swoop on BG Group, he’s taking quite a gamble on a recovering oil price.

By acting now, Mr van Beurden may have gained some sort of first mover advantage.

If he succeeds, he will also have catapulted his company into pole position as the world’s largest oil major. But he is also paying a very fancy price – so high, in fact that despite the enthusiastic backing of the BG board and the lack of any obvious regulatory obstacles, there is some manifest scepticism in markets about whether the takeover will ever come to fruition.

The BG share price is trading at a much wider discount to the see through price of the offer than you would expect for such an apparently slam dunk deal.

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Funds circle for spin-off gains from Shell deal

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Article by Ashley Armstrong published 12 April by The Sunday Telegraph

Funds circle for spin-off gains from Shell deal

The world’s largest private equity firms are already circling the $30bn (£20bn) of assets that could be spun off by Shell following its acquisition of BG Group, the largest ever merger between two UK companies.

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Warburg Pincus and Blackstone are understood to be gearing up to get involved in the biggest industry deal for the past two decades. Shell’s £47bn takeover of its smaller oil and gas rival is expected to be the catalyst for a wave of consolidation in the sector.

Rival private equity firms Carlyle, Riverstone, KKR and Apollo, which also have a track record in energy investments, are expected to take an interest in the pool of assets that will be put up for grabs by Shell.

Shell’s chief executive, Ben van Beurden, said that the combined company would make $30bn of asset sales “from 2016 to 2018 averaging $10bn per year”.

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Dividend doubts creep in after Shell’s £47bn swoop for BG Group

Screen Shot 2015-04-08 at 08.12.04Article by Andrew Neil published 11 April 2015 by

Dividend doubts creep in after Shell’s £47bn swoop for BG Group

“We think Shell’s acquisition of BG will likely be viewed as strategically smart and opportune, but should oil prices stay lower for longer, it could put pressure on UK dividends and be detrimental to UK pension investors.”

Shell’s swoop for BG Group (LON:BG.) failed to win over the Anglo-Dutch oil giant’s investors yesterday.

As BG soared, Shell shares (LON:RDSB) moved in the opposite direction and eventually posted their biggest fall since 2008.

At £47bn, the problem for boss Ben van Beurden is that some stakeholders fear he’s been too generous with his offer.

Shell’s dividend, which accounts for close to 10% of the total pay-out to UK equity investors, is also a particular concern.

“Shell has stuck its dividend reputation to the mast with this deal,” Investec oil and gas analyst Neill Morton told Proactive.

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Greenpeace activists abandon Arctic drill rig retained by Shell after six-day stay

Associated Press article published by Fox News 11 April 2015

Greenpeace activists abandon Arctic drill rig retained by Shell after six-day stay

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SEATTLE –  Greenpeace says six activists opposed to offshore drilling in the Arctic have abandoned a Seattle-bound drill rig they boarded in the Pacific Ocean six days ago.

The organization said in an email Saturday that rough seas prompted the decision. The protesters rappelled off the rig and got into inflatable boats before returning to a Greenpeace ship stationed nearby.

The six climbed the Polar Pioneer about 750 miles northwest of Hawaii on Monday. A heavy-lift vessel called the Blue Marlin is transporting the rig to Seattle for staging before possibly heading to the Arctic.

Royal Dutch Shell, which leased the rig, sued in U.S. District Court in Anchorage, Alaska, last week seeking a court order to remove the protesters. A judge heard arguments on Friday but declined to rule immediately.

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New Sea Drilling Rule Planned, 5 Years After BP Oil Spill

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Screen Shot 2015-04-12 at 14.33.58Article by CORAL DAVENPORT published APRIL 10, 2015 by The New York Times

New Sea Drilling Rule Planned, 5 Years After BP Oil Spill

WASHINGTON — The Obama administration is planning to impose a major new regulation on offshore oil and gas drilling to try to prevent the kind of explosions that caused the catastrophic BP oil spill in the Gulf of Mexico, administration officials said Friday.

The announcement of the Interior Department regulation, which could be made as soon as Monday, is timed to coincide with the five-year anniversary of the disaster, which killed 11 men and sent millions of barrels of oil spewing into the gulf. The regulation is being introduced as the Obama administration is taking steps to open up vast new areas of federal waters off the southeast Atlantic Coast to drilling, a decision that has infuriated environmentalists.

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BG acquisition offers Shell opportunity for major strategy change

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Screen Shot 2015-04-08 at 08.12.04By Paddy Briggs

As a Shell “lifer” – more than forty years if you include my time as a Director of the Pension  Fund – I cannot recall a bigger strategic shift than the acquisition of BG. It offers the Corporation a unique opportunity to do what Tom Peters called “stick to its knitting” – to concentrate on what it’s really good at.

BG is an “Upstream” company. It only does exploration and production of oil and gas. And that is what Royal Dutch Shell (RDS) is good at too. To the man or woman in the street it is the Shell emblem standing over a Shell petrol station for which it is best known. But over the years this part of the business – never, in truth, that important to the heavies at the top – has declined in importance. The “Downstream” – the refining and marketing of oil, gas and chemicals – is pretty much cast adrift from the Upstream. The engineers, geologists and accountants in the highest echelons of Shell never really understood it anyway! There are no longer any economies of scale from being involved in oil from wellhead to petrol pump, if there ever were. 

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Shell Acquisition of BG Group to Create Giant Operator of LNG Ships

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LONDON –  Royal Dutch Shell PLC’s (RDS.A) planned $70 billion acquisition of BG Group PLC would create a giant operator of liquefied-natural-gas vessels, offering owners that charter the ships more opportunities for lucrative, long-term contracts in an otherwise-depressed shipping industry.

“The merger offers owners more flexibility and better utilization of their fleets, which could mean long-term leases offering steady income,” said Ted Petropoulos, head of Athens-based Petrofin Research. “It’s also a defensive move to secure market share as more players come into the market.”

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Royal Dutch Shell Could Eclipse Exxon Mobil Corporation As Largest Producer: Credit Suisse

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By: MICHEAL KAUFMANPublished: Apr 10, 2015 at 6:22 am EST

In a report published on Thursday, Credit Suisse commented on the aftermath of Royal Dutch Shell plc’s (ADR) (NYSE:RDS.A) announcement to acquire BG Group Plc (ADR) (OTCMKTS:BRGYY). The sell-side research firm deliberated that the transaction makes sound strategic sense and moves Shell down the cost curve. The firm reiterated an Outperform rating on the stock.

Although the announcement comes with a rich valuation, Credit Suisse does not expect any counter-bid unless someone uses Shell’s internal planning assumptions. The new company might eclipse Exxon Mobil Corporation (NYSE:XOM) as the largest publicly traded producer by 2018, and will be a less capital-intensive version “of its former self” with greater scale and scope around key focus areas.

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Following the Shell-BG deal, could Exxon bid for BP?

Screen Shot 2015-04-09 at 00.19.50Article by Jim Armitage published by The Independent on Friday 10 April 2015

Following the Shell-BG deal, could Exxon bid for BP?

Another day, another tide of speculation sweeps through the City investment banks about oil industry takeovers following Shell’s £47 billion bid for BG, the UK’s third largest energy supplier.

Even that old saw about Exxon dispatching its galleons across the Channel to buy BP was being punted around by some brokers this morning. Forgive me if history proves me a fool, but, even taking Exxon’s recent chest beating about its appetite for deals, it seems unlikely.

For starters, monopoly regulators would force such a vast company to sell huge amounts of their combined assets, negating the whole point to a deal. Second, Exxon has just painfully extricated itself from its joint exploration project in Russia thanks to US sanctions. It’s hardly likely to jump back into bed with the biggest western operator there. Third, there’s the small matter of the ongoing Gulf of Mexico oil spill litigation.

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Royal Dutch Shell’s £47bn swoop on BG Group faces potential stumble over asset ownership

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Screen Shot 2015-04-08 at 08.12.04Royal Dutch Shell’s swoop on BG Group will face a series of hurdles including competition fears and questions over the ownership of some of its newly acquired assets.

The £47billion acquisition of BG will make Shell the largest foreign oil company in Brazil – but there are concerns about its assets in the South American nation.

One of Shell’s main reasons to pounce on BG was its large holdings in Brazil. But many of the assets there are owned through joint ventures, which gives the partners first refusal to buy BG’s share in the projects if it is taken over.

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Shell complaint claims Greenpeace activists risk success of Arctic drill

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Adam VaughanFriday 10 April 2015 15.19 BST

Shell has warned it could miss a window to drill for oil in the Arctic this summer, if six Greenpeace activists occupying a rig under contract to the company are not removed, court filings by the oil company reveal.

“Left unsanctioned, Greenpeace USA’s illegal and tortious actions will, as Greenpeace USA intends, delay and/or prevent Shell from transporting vessels, facilities, supplies, and personnel to the Chukchi Sea, and from conducting federally permitted exploration drilling activities on Shell-owned United States OCS oil and gas leases, during the brief 2015 open water season in the Arctic Ocean.”

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Is Royal Dutch Shell Up For The Challenge?

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By: MICHEAL KAUFMANPublished: Apr 10, 2015 at 10:33 am EST

he energy sector’s mega deal between Royal Dutch Shell Plc (ADR) (NYSE:RDS.A) and BG Group Plc (ADR) (OTCMKTS:BRGYY) is now under close scrutiny by China and other countries, as well as by investors. When asked about the details of regulatory concerns, both parties refused to comment, says the Wall Street Journal. The merger has been valued at $70 billion.

The CEO of the Hague-based Anglo-Dutch company, Ben van Beurden and BG’s Chairman, Andrew Gould had claimed on Wednesday they didn’t expect any major regulatory issues, except from a few countries. Although they did they expected the completion to be delayed until early 2016 while regulatory matters were settled.

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Royal Dutch Shell plc Shareholders Express Concern Over Dividends After BG Group Merger

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By: MICHEAL KAUFMANPublished: Apr 10, 2015 at 9:39 am EST

A $70 billion merger deal between Royal Dutch Shell plc (ADR) (NYSE:RDS.A) and BG Group plc (ADR) (OTCMKTS: BRGYY) was finalized earlier during the week. Shell had paid a premium of 50% on BG Group’s share price on April 9. Many have commended the efforts of Shell CEO Ben van Beurden for going through with the deal.

The deal holds great benefits for Shell and will allow the company to access BG’s cash-rich assets to become the global leader in liquefied natural gas. The oil company had been finding it hard to replace its oil and gas reserves but the merger with BG would solve this problem. While the deal brings in benefits, it raises some concerns among the shareholders, who have expressed worries regarding dividend payouts.

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Shell-BG takeover to test China’s pledge on antitrust transparency

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Screen Shot 2015-04-03 at 09.56.31Shell-BG takeover to test China’s pledge on antitrust transparency


(Reuters) – Royal Dutch Shell’s $70 billion bid for BG Group Plc will put to the test a pledge by China’s antitrust regime to be more transparent, after it faced strong criticism last year from the United States and Europe.

China’s nascent competition law has become one of the biggest wildcards for large cross-border deals in recent years, particularly where natural resources are concerned.

In 2013, China’s Ministry of Commerce (MOFCOM) said miner Xstrata had to sell off a prized Peruvian copper project in order for its $35 billion merger with Glencore to proceed, despite neither company owning any assets in China at the time. The combined company’s share of China’s copper market was also not high enough to warrant concerns by international norms.

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An investment-grade lesson from the Shell-BG supermerger

Screen Shot 2015-04-08 at 08.12.04Article by Bengt Saelensminde published 10 April 2015 by

An investment-grade lesson from the Shell-BG supermerger

This week’s mega-takeover deal between BG and Shell has got the City in somewhat of a tizz.

What a great windfall. The oil and gas sector is on fire right now. Which companies will be snapped up next?

The corporate spiel (as usual in takeover deals) is all about ‘corporate synergies’. Cost savings of £1.7bn each and every year.

But as I’ll show you, this deal has very little to do with any of that.

If you want to put yourself in the right place to profit from these takeover opportunities, then there’s a little trick you need to know.

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Shell’s Huge Gas Bet Underscores Big Oil’s Push to Replace Coal

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Article by Javier Blas and Rakteem Katakey published 10 April 2015 by

BP Plc coined the slogan “Beyond Petroleum.” The new industry mantra might be “Beyond Oil and Into Gas.” Oh, and while we’re at it, “Down With Coal.”

Consider Royal Dutch Shell Plc’s recent $70 billion acquisition of BG Group Plc — clearly a huge bet that natural gas will prove to be its cash cow of the future.

The petroleum industry’s move toward gas is hardly new — the hydraulic fracturing shale revolution is in its second decade, after all. Still, Shell’s move is an emphatic confirmation that some among the Big Oil family firmly believe gas will play a growing role in meeting the energy demand of emerging countries such as China and India that are trying to move away from dirtier coal.

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Royal Dutch Shell’s proposed $70 billion acquisition of BG could trigger pre-emption rights

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Extracts from an article by Daniel McCarthy published 9 April 2015 by Micro Cap Observer

Royal Dutch Shell’s proposed $70 billion acquisition of BG could trigger pre-emption rights

The proposed takeover of BG Group by Royal Dutch Shell in a $70 billion deal could be short-sighted, and capable of triggering pre-emption rights in gas and oil fields in a backlash that could undermine the value and integrity of the deal.

Anglo-Dutch oil giant, Shell revealed the main reason for its attempt to acquire BG Group was because of its position on gas prospects in Brazil, where BM-S-9 and BM-S-11, the two exploration oil blocks controlled by BG in Brazil.

However, BG revealed in its annual report published recently that: “In certain specific circumstances, it is possible that BG Group’s partners in BM-S-9 (Petrobras and Repsol Sinopec Brasil) have a right of first refusal to acquire BG Group’s interest…in the event of a change of control of BG Group Plc.”

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Shell May Need $100-per-Barrel Oil to Make BG Deal Work

Screen Shot 2015-04-08 at 08.12.04Article by Tim Mullaney published 9 April 2015 by

Shell May Need $100-per-Barrel Oil to Make BG Deal Work

NEW YORK (TheStreet) — How aggressive was Royal Dutch Shell’s (RDS.AGet Report) $70 billion deal to buy British oil and gas producer BG Group (BRGYY)? So aggressive that oil may have to rebound all the way to $100 a barrel by 2020 to justify the price that Shell paid, according to an analysis by the Norwegian research firm Rystad Energy. 

The price can be taken as a measure of the pressure Shell faces to get its hands on new assets in an environment in which many offshore oil and gas assets are expensive to bring to market, and because Shell hasn’t been a major force in fracking in the United States, said Per Magnus Nysveen, head of analysis at Rystad.

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Shell expected to slash jobs and spending

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Royal Dutch Shell is planning a £20bn sell-off of assets to create a leaner oil giant after its £47bn swoop for rival BG Group.

Shell has snapped up BG to expand its liquefied natural gas business and Brazilian deepwater wells but the deal also creates a sprawling £200bn behemoth that will need to be cut down to size.

Shell’s chief executive Ben van Beurden said he ‘will reshape the combined portfolio’ to create a ‘more focused company in a volatile oil price world’.

The Anglo-Dutch giant is expected to slash jobs and spending and confirmed the deal will enable £670m of operational savings, £1bn of exploration savings and a total cut in spending to less than £27bn. But fears it has paid too much for its rival spooked investors and it shed £4.6bn in value as shares slumped almost 9 per cent to close down 189p at 2019.5p.

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Shell sounds starting gun for more mergers in big oil

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Screen Shot 2015-04-09 at 22.49.19After all the fuss over the appointment and fat cat pay for Helge Lund, the new chief executive of BG, one must wonder why chairman Andrew Gould bothered.

Just weeks after Lund took the reins, assets were written down by £6bn and Gould found himself in cloak and dagger talks with Royal Dutch Shell’s chief executive Ben van Beurden in a hotel room at the Dorchester.

Shell had been closely monitoring BG, the former exploration arm of privatised British Gas, since the final quarter of last year when global oil prices fell off a cliff.

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Future of BP as independent company thrown into doubt by Shell’s takeover of BG

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Future of BP as independent company thrown into doubt by Shell’s takeover of BG

Screen Shot 2015-04-09 at 00.19.50The future of BP as an independent company was thrown into doubt yesterday as analysts said BG’s takeover will prompt a wave of consolidation in the struggling sector.

Firms across the industry have been hit by the falling oil price, trimming their values and making them more vulnerable to bids.

Michael Hewson, chief market analyst at CMC Capital Markets, said the move ‘raises expectations as to which other companies could also come into play as the oil and gas sector gears up for further consolidation, with speculation surrounding Tullow Oil and BP’.

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Shell boss says swoop for BG not just about collapse in the oil price – but admitted cheaper crude played a part

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Shell boss Ben van Beurden

Shell boss Ben van Beurden

The boss of Royal Dutch Shell said his £47bn swoop for BG Group was not just about the collapse in the oil price – but admitted cheaper crude did play a part.

Ben van Beurden insisted the deal was an opportunity for Shell to beef up its operations – particularly through greater exposure to liquefied natural gas (LNG) where BG is a major player.

But he added that the fall in the oil price – from around $115 a barrel last summer to less than $60 last night – and the subsequent fall in the BG share price was a factor.

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BG Group deal with oil giant Royal Dutch Shell sparks fury over pay

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Screen Shot 2015-04-08 at 08.12.04BG Group is facing a fresh investor backlash over executive pay in the wake of oil giant Royal Dutch Shell’s £47billion takeover offer.

The potential £32million rewards package for BG chief Helge Lund was slammed as ‘completely over the top’ by one senior shareholder.

A chorus of senior investors in Shell and BG have revealed their dissatisfaction over bumper payouts at the oil firms.

Lund joined BG in February, just weeks before Shell made its approach. The deal for Shell to buy BG is likely to complete at the beginning of next year which means Lund will have been in the hotseat for only a year.

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Shell and BG: A vote for gas

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Shell’s offer for BG shows how the energy business is changing

Screen Shot 2015-04-09 at 22.12.5411 April 2015

JAM tomorrow, but never jam today. That was long the lament about Britain’s third-largest energy company, BG Group. It was notable for its great prospects, troubled operations, wobbly management and a slumping share price—down 20% in the past 12 months. Now Shell, an Anglo-Dutch giant, has pounced, with a £47 billion ($70 billion) cash and shares offer which pay BG shareholders a 50% premium on what their holdings were worth just before the bid. Barring regulatory objections, the deal, which will create a $300 billion oil and gas company, will be complete within 15 months.

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Corporate espionage: Shell Cloak and Dagger activities

John Donovan, Co-Founder Royal Dutch Shell

By John Donovan

Screen Shot 2014-10-30 at 09.22.43Corporate espionage: Shell Cloak and Dagger activities spanning more than two decades – much of it directed against me 


  • Infiltrated spies into the Nigerian government 
  • Was responsible for covert operations against Greenpeace and other perceived enemies, using a serving secret service agent freelancing for a private spy firm closely connected with Shell
  • Employed private security contractors on the Corrib Gas Project to carry out surveillance operations in Ireland against the public and the press
  • Secretly applied pressure to The Sunday Times and The Financial Times in an attempt to suppress news coverage about me

In a recent Daily Mail article about Shell’s takeover bid for the BG Group, reference was made to a  ‘cloak and dagger’ meeting between Shell’s chief executive Ben van Beurden and the chairman of BG Group, Andrew Gould, at The Dorchester Hotel.

It was obviously an important commercially sensitive meeting, but it hardly compares with the real ‘cloak and dagger’ activity for which Shell has been responsible over the decades, some of it directed at me and my late father, Alfred Donovan.

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Could Shell-BG Deal Revive Exxon-BP Merger?

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By: MICHEAL KAUFMANPublished: Apr 9, 2015 at 8:05 am EST

Royal Dutch Shell plc (ADR) (NYSE:RDS.A) has announced an agreement to acquire UK-based BG Group plc (ADR) (OTCMKTS:BRGYY) in a massive $70 billion deal. It is one of the biggest merger and acquisition deals in the oil sector for over a decade, and could become the platform for Shell to compete with market leader ExxonMobil Corporation (NYSE:XOM).

Shell will use cash and shares to pay UK natural gas giant’s shareholders around $20.17 (1,350 pence) per share of BG. Compared to BG’s 90-day average stock price before the deal was announced, it implies that Shell has agreed to pay a 52% premium.

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Royal Dutch Shell Sues Greenpeace Activists

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By: MICHEAL KAUFMANPublished: Apr 8, 2015 at 8:38 am EST

The oil multinational has filed a legal complaint in a federal court in Alaska, as it looks to remove the six Greenpeace activists from its vessel carrying the Polar Pioneer oil rig.

In an official statement yesterday, Shell said it has had talks with groups that are against the company’s planned drilling activities in Arctic this summer. While the company respects their views, the recent move by protesters has endangered their lives as well as lives of the crew members. The risky decision to climb a moving vessel is also illegal, claims Shell.

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Who’s next?

Screen Shot 2015-04-09 at 00.19.50Extracts from an article by Sean Farrell and Julia Kollewe published by The Guardian, 8 April 2015, under the headline:

Shell’s BG takeover has oil industry asking who’s next

“Only Exxon has the flexibility to do big-ticket deals like BG Group. In contrast, Total, Eni and Statoil will have to content themselves with the pick ’n’ mix counter.”

BP could find itself the target of a takeover. The deal most commonly mooted by analysts is a bid by ExxonMobil to combine the two companies’ US businesses. After Shell’s move for BG, the US giant may feel emboldened to act.

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£47billion deal, one of the biggest takeovers, creates £200 billion company

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Screen Shot 2015-04-08 at 08.12.04News of the merger led to job fears. In the UK Shell has around 6,500 staff while BG employs around 1,600. Shell is in the process of laying off 500 people at its North Sea operations where old oil fields are becoming too expensive to operate.

By Laura Chesters City Correspondent For The Daily Mail


The bid has been months in the planning. Shell ‘ran the numbers’ on BG, Britain’s third largest energy company, last year as its share price has fallen by a fifth since the oil price crash.

Shell’s chief executive Ben van Beurden made a call to BG’s chairman Andrew Gould on Sunday March 15 and a ‘cloak and dagger’ meeting took place at the Dorchester Hotel last month. 

He described the deal as a ‘fantastic fit’ and said the ‘logic’ to buy BG has always been there but that the falling oil price made it a ‘whole lot more compelling’.

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Exxon, BP in Deal Spotlight After Shell Buys BG Group

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Screen Shot 2015-04-09 at 00.19.50Article by Tara Lachapelle and Brooke Sutherland published 8 April 2015 by

Now that Royal Dutch Shell Plc has made its move for BG Group Plc, Exxon Mobil Corp. and BP Plc could contemplate deals — perhaps even with each other.

Speculation of an Exxon-BP combination surfaced last year after oil prices declined sharply, increasing the appeal of big mergers that could yield massive cost savings. BP has largely put behind it the legal morass surrounding the 2010 Gulf of Mexico spill. Still, the $124 billion company remains among the cheapest major producers relative to estimated profit, according to data compiled by Bloomberg.

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Shell-BG Deal Puts Pressure on Big Oil to Consolidate Again

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Screen Shot 2015-04-08 at 08.12.04Article by Javier Blas12:47 PM BST April 8, 2015 published by

In the words of Royal Dutch Shell Plc’s boss, the fundamental logic behind his decision to buy BG Group Plc “always existed.”

What pushed the $70 billion deal over the finish line was that it had become “very compelling from a value perspective” after oil prices fell by half to $50 a barrel.

Ben van Beurden is unlikely to be alone among the chief executive officers of the world’s largest oil companies in thinking that valuations are looking very persuasive.

Just as the first deal between BP Plc and Amoco Corp. during a previous oil price slump in 1998 triggered a wave of deals, the Shell-BG merger is likely to push big oil to consolidate again.

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Shell Will Buy BG for $70 Billion in Push for Gas Dominance

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Screen Shot 2015-04-08 at 08.12.04by Javier BlasRakteem Katakey for

Royal Dutch Shell Plc agreed to buy BG Group Plc for about 47 billion pounds ($70 billion), making Europe’s largest oil company the pre-eminent player in global natural gas and adding fields in Brazil.

The deal, the industry’s biggest in at least a decade, will push Shell further into producing, shipping and selling gas as the company bets China and other emerging economies switch from coal and oil to cut pollution.

Investors were skeptical of the stock and cash acquisition, which isn’t expected to boost earnings per share until 2017. The price of the class of share being used to buy BG fell the most since 2008 on concern the company is overpaying.

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Shell, With $70B Deal For BG Group, Becomes World LNG Giant

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Screen Shot 2015-04-08 at 08.12.04Christopher Helman

So this is how the consolidation starts. Royal Dutch Shell is making a smart move in its $70 billion acquisition of BG Group . The deal will gain Shell access to the most exciting deepwater oil projects in the world, in Brazil. While adding in BG Group’s fast-growing liquefied natural gas business will soon make Shell the undisputed world leader in LNG. The combination will set Shell on the path to unseat Exxon Mobil XOM -1.95% as the world’s biggest oil company — at least until the next big acquisition is revealed.

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Shell’s $70 Billion Takeover Could Herald Wave of Mergers

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Ben van Beurden, CEO of Royal Dutch Shell, left, shakes hands with the Chairman of BG Group Andrew Gould during a press conference to announce Royal Dutch Shell has agreed to buy British Gas, in London on Wednesday. 

Associated Press Article 8 April 2015