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Why the Shell-BG mega-deal was risky for the City as well as the oil giants

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By Ashley Armstrong7:17PM GMT 27 Jan 2016

It has taken nearly 10 months, five competition regulators and 40 approvals from other global authorities. But Shell’s chief executive Ben van Beurden’s white-knuckle ride is finally drawing to a close.

On Wedensday, van Beurden won overwhelming support for the £40bn takeover from his shareholders. However, his celebrations may well be drowned out by raucous hedge funds who are cheering what one called “a very profitable trade”.

At Shell’s highly-anticipated shareholder vote in The Hague, the mood was serene, with van Beurden and chairman Charles Holliday warmly greeting shareholders, safe in the knowledge that the level of proxy vote support meant the decision was never in doubt.

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Shell Needs to Repay Investors Who Backed Its Biggest Ever Wager

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Screen Shot 2016-01-20 at 08.29.05By Rakteem Katakey: Bloomberg.com: 27 JAN 2016 – 5.06 PM GMT

Royal Dutch Shell Plc is under pressure to reward the faith of the more than 80 percent of shareholders who shrugged off the risks from slumping oil prices to back its record acquisition of BG Group Plc. 

That won’t be easy: the rout in crude has cut the value of Europe’s biggest oil company to the lowest in more than 10 years and raised investor concerns that its dividend is unsustainable.

Chief Executive Officer Ben Van Beurden, who expended a lot of political capital convincing investors that BG will help Shell ride the downturn, has to deliver promised benefits from liquefied natural gas to deepwater oil production as billions of dollars of cash flow is choked off.

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Shell shareholders vote for BG Group takeover despite opposition

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Terry Macalister Energy editor: Wednesday 27 January 2016 14.25 GMT

At a specially convened general meeting in The Hague on Wednesday, 83% of Shell shareholders voted for the acquisition, despite claims that the Anglo Dutch group was paying too much for its rival during a period of collapsing oil prices.

The reputation of Ben van Beurden, the Shell chief executive, was challenged by the deal, which was opposed by large sections of the City as well as leading shareholders such as Standard Life.

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Shell Shareholders Approve Acquisition of BG Group

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Screen Shot 2016-01-26 at 08.12.50Shell Shareholders Approve Acquisition of BG Group

By STANLEY REEDJAN. 27, 2016

LONDON — In one of the first major deals struck as oil prices plummeted, Royal Dutch Shell shareholders on Wednesday approved the acquisition of the BG Group, the Britain-based oil and gas producer, for about $50 billion.

Analysts had expected major oil companies like Shell and ExxonMobil to take advantage of low prices to acquire rivals or smaller companies to strengthen their position, but there have been few big moves so far, perhaps because of the steepness of the drop in oil prices, which have fallen since the summer of 2014 to around $30 a barrel from more than $100 dollar a barrel.

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Shell shareholders vote in favour of £40bn BG takeover

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By Jillian Ambrose: 12:35PM GMT 27 Jan 2016

Shell shareholders have given the nod to the £40bn takeover of BG Group by a strong majority.

The 83pc vote in favour of the plans paves the way for the creation of Britain’s largest public company, pending a separate vote by BG shareholders on Thursday which is widely expected back the plans.

The vote, at an extraordinary meeting in the Hague, concludes a nine month gauntlet of global regulatory hurdles, since when plunging oil prices have raised serious concerns that Shell’s offer was overpriced.

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Shell shareholders approve $50 billion BG takeover

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Screen Shot 2015-12-23 at 09.03.45THE HAGUE | BY KAROLIN SCHAPSWed Jan 27, 2016 1:56pm GMT

Royal Dutch Shell (RDSa.L) shareholders approved its $50 billion takeover of BG Group (BG.L) on Wednesday, clearing the last main hurdle to creating the biggest liquefied natural gas (LNG) trader in the world.

BG shareholders are also expected to approve one of the biggest deals in the energy sector in the past decade at a meeting on Thursday, a vote that would allow the two oil and gas companies to merge on Feb. 15.

Few investors have openly challenged the deal’s strategic benefits for Shell. But with oil languishing near $30 a barrel and only a slow recovery forecast, some had questioned the viability of a deal that would increase Shell’s debt burden.

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Shell shareholders back takeover of BG Group

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Screen Shot 2015-12-23 at 09.03.45Investors in Royal Dutch Shell on Wednesday gave a green light to the group’s £35bn takeover bid for rival producer BG Group, making it a near certainty that the biggest energy deal in more than a decade will go ahead. However, a sizeable minority, some 17 per cent, were opposed.

Blundering Shell E&P Ireland Director John Egan Resigns

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Screen Shot 2016-01-27 at 11.06.28By John Donovan

I am aware of speculation over the claimed resignation of John Egan, as a director of Shell E&P Ireland.

It is, in fact, true.

The proof is provided below.

For a number of years, Egan has been the Communications supremo at Shell E&P Ireland, the main partner in the Corrib Gas Project, which has been surrounded by accusations of corruption from the outset.

Ironically, in view of his conduct, Egan claims expertise in reputation restoration.

On New Years Eve, Shell warned nearby residents about gas flaring at the newly commissioned onshore processing plant at Bellanaboy.

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Corrib Gas: Was it worth it? Yes.

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Corrib Gas: Was it worth it? Yes.

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Brendan Cafferty: 27 JAN 2016

As the gas starts to flow a member of the pro gas lobby reflects on the controversy

Who is to blame for the delay?

The gas was due ashore in 2002 at a cost of €800 million. It finally arrives at the start of 2016 at a cost of €3.5 billion-€4 billion. Planning such a huge project was, of course, protracted, with EPA and An Bord Pleanála hearings. Kevin Moore, the board’s planning inspector, did at the outset recommend that planning not be granted for the terminal at Ballinaboy, but the board of An Bord Pleanála did not agree with him – something that is not unusual.

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Investors brace for BG merger vote

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by Veselin ValchevTuesday, 26 Jan 2016, 08:42 GMT

Royal Dutch Shell Plc (LON:RDSA) shareholders are due to vote on the £31 billion acquisition of smaller energy rival BG Group tomorrow, and all uncertainty in regards to the vote’s success seem to have evaporated.

A slew of highly influential investors and advisers have publicly backed the merger, which opponents have slammed as “value destructive” for Shell shareholders.

The only major investor to publicly come out against the acquisition is Standard Life, which argued that the slumping oil price has eroded the appeal of the merger. However, Standard Life also noted that it would vote for the deal with its BG Group holding at the respective vote on Thursday, the day after Shell votes.

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Oil prices to stay near current level throughout 2016, World Bank says

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Oil prices to stay near current level throughout 2016, World Bank says

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Phillip Inman Economics correspondent: Tuesday 26 January 2016 18.08 GMT

The World Bank has slashed its forecast for oil prices this year, saying the cost of a barrel of crude will stay near its current lows for the rest of 2016.

The Washington-based institution said a glut of oil that sent prices crashing by almost half last year and another 27% this month will continue to dominate the market for the next year.

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Corrib gas a ‘template’ for ‘how not to undertake a development’

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Lorna Siggins: 26 JAN 2016

The Corrib gas project is a template for “how not to undertake a development”, according to a new planning approach published by the British Institution of Civil Engineers.

Although the gas project has secured its final Government approval from Minister for Energy Alex White, the prospect of further legal challenges and the large Garda presence at an “invitation-only” opening reflects the fact that it still does not have community consent.

Two of the report’s four authors say that had both Shell and Government agencies adopted a more democratic approach, they could have avoided cost overruns, including “the loss of at least €600 million loss to the tax payer”, and could also have “avoided the serious ensuing conflict with the local community”.

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Oil price falls again as Shell shareholders prepare to vote on mega-merger with BG Group

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The price tumbled as much as 3 per cent during trading yesterday when it emerged Iraq had produced a record high of oil and may even raise output further.

The news comes as the market is already braced for more supply from Iran after sanctions were lifted. 

Tankers have begun to leave Iran’s ports and it agreed its first deal with a European company last week with Greece’s refinery Hellenic Petroleum. 

Some analysts expect Iran to increase production to between 3million and 4million barrels a day. Iraq’s fields produced more than 4.1million barrels a day.

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Shell, Eni In Fresh Trouble As Nigeria Begins Moves To Withdraw OPL 245

Screen Shot 2016-01-26 at 08.24.06The retrieval of the controversial oil bloc, estimated to contain about 9 billion barrels of crude, as well as placing heavy fines on the oil giants, is contained in a far-reaching recommendation by the office of the Director of Public Prosecution, DPP, Mohammed Diri.

The recommendation was at the instance of the Attorney General of the Federation and Minister of Justice, Abubakar Malami, who is set to advise the federal government on how to proceed on a controversial deal that is being investigated by authorities in four different countries.

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After The Big Short, here’s The Big Long: Shell-BG

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By Nancy Hulgrave: 26 JAN 2016

“The Big Short” landed in UK movie theaters this weekend. The film adaptation of Michael Lewis’ best-selling novel tells the story of Wall Street outsiders who made a fortune predicting the subprime mortgage crisis and subsequent financial crash.

If you watch the film — and you’re not too busy deciding whether it’s Ryan Gosling, Brad Pitt or Christian Bale you wish you were sharing popcorn with (don’t worry boys, you get Margot Robbie in a bubble bath — you’ll probably spend the two-odd hours wondering what the next big short might be and how you can profit.

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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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Does the Shell/BG Group Deal Make Sense With Oil at These Levels?

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On April 8, 2015, Royal Dutch Shell (NYSE:RDS-B) announced the terms of an agreement to buy BG Group for 383 pence in cash (or $5.51 per share) and 0.4454 Shell B Shares. If shareholders of both companies approve the deal when they vote on Jan. 28 and 29, the combined company will become the largest publicly traded LNG producers in the world, with more than double the reserves of ExxonMobil (NYSE:XOM). And it would catapult Shell into becoming the world’s second-largest non-state oil company in the world from a market cap perspective, ahead of Chevron (NYSE:CVX). 

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How Far Will BP plc And Royal Dutch Shell plc Fall If The Oil Price Reaches $20 A Barrel?

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The share prices of these giants could halve… My investment advice for both companies is unequivocal. STEER. WELL. CLEAR.

By Prabhat Sakya – Monday, 25 January, 2016

Isn’t it interesting how, whenever there’s any news, we tend to jump on the negative side rather than the positive? As a commuter, I drive many thousands of miles every year. That’s why it’s great for me that the oil price is falling. And alongside the hundreds of pounds I’m saving on my daily commute, I’ll save a pretty penny on my heating bills over the next few years. Cheap fuel allows the global economy to run more cheaply, and that benefits consumers around the world.

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Oil prices in reverse amid Opec call

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Oil prices tumbled again on Monday, eroding last week’s gains, as Opec called for co-operation from oil-producing nations outside the cartel.

Brent crude fell 4.1% to $30.86 a barrel following a 10% rise on Friday, while US oil shed 4.7% to $30.68.

The slide came as the head of Opec called for all oil-producing nations to work together.

Abdullah al-Badri said both Opec and non-Opec oil producers needed to tackle oversupply to help prices rise.

“It is vital the market addresses the issue of the stock overhang. As you can see from previous cycles, once this overhang starts falling then prices start to rise,” he told a conference in London.

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Shell re-opens Nigeria’s Trans Niger Pipeline shut since Nov

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Screen Shot 2015-11-20 at 08.55.47Shell re-opens Nigeria’s Trans Niger Pipeline shut since Nov

LONDON Jan 25 (Reuters) – Royal Dutch Shell said on Monday that is had re-opened a key oil pipeline in Nigeria that had been shut since late November.

The Trans Niger Pipeline, or TNP, which carries Bonny Light crude oil to the export terminal had re-opened “in recent days,” a Shell spokeswoman said by email.

The pipeline remained closed while the company investigated an incident on Nov. 22 in which four contractors died during an operation to remove crude oil theft points.

The closure of the pipeline had led to loading delays of up to 10 days, according to traders.

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Shell’s BG Arbitrage Fades as Investors Look Set to Back Deal

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Screen Shot 2015-12-23 at 09.03.45By Rakteem Katakey and Ryan ChilcoteBloomberg.com: 25 JAN 2016

Royal Dutch Shell Plc is on the brink of completing its biggest acquisition as shareholders look set to back its purchase of BG Group Plc.

Risks to the deal completing have almost disappeared. The discount of BG’s shares to the offer price narrowed to a record low of 2.2 percent on Monday after some of Shell’s top shareholders and advisory firms backed the transaction this month. It was at 12.5 percent on Dec. 21.

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Shell’s acquisition, the industry’s biggest in at least a decade, came under scrutiny after oil prices fell by half from about $60 a barrel the day before it was announced in April. The slump, which Shell Chief Executive Officer Ben Van Beurden expects to be prolonged, previously kept BG’s discount to the offer from narrowing as some investors questioned whether Europe’s biggest oil company was paying too much. That’s changing as shareholders come round to Shell’s view on the long-term rationale of the purchase.

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Shareholder green light expected for Shell BG merger

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MARTIN FLANAGAN: Monday 25 January 2016

Major investors are expected to back Shell’s troubled £36 billion takeover of rival BG Group this week despite reservations that the plunging oil price has made the deal less attractive than when first unveiled last year.

David Cumming, head of equities at Edinburgh-based Standard Life Investments, has been one of the most high-profile opponents of the merger, calling it “value destructive for Shell shareholders”.

Some other institutional investors also have concerns about the terms of the deal in the current depressed climate for the oil industry, and it is thought the Shell shareholder vote on Wednesday and BG vote on Thursday could be close.

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Shell, Eni in fresh trouble as Nigeria begins moves to withdraw OPL 245 from Malabu, Dan Etete

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By Idris Akinbajo and Joshua Olufemi: 25 JAN 2016

The Nigerian government is set to retrieve one of Africa’s richest oil blocs from oil giants, Shell and Eni, PREMIUM TIMES has learnt.

Not only will the two oil giants lose OPL 245, should President Muhammadu Buhari approve the recommendations, they will also be fined billions of dollars for illegal activities, including paying money to fraudulent public officials and private citizens in order to secure the bloc.

The retrieval of the controversial oil bloc, estimated to contain about 9 billion barrels of crude, as well as placing heavy fines on the oil giants, is contained in a far-reaching recommendation by the office of the Director of Public Prosecution, DPP, Mohammed Diri.

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20 years after gas discovery, Corrib opens in north Mayo

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Lorna Siggins: 24 JAN 2016

The €3.5 billion Corrib gas development is due to be opened by Minister of State for Natural Resources Joe McHugh on Monday, almost 20 years after the gas discovery was reported off the north Mayo coast.

Taoiseach Enda Kenny had been earmarked for the invitation-only event, but will be at Downing Street in London. Corrib shareholders Shell, Statoil and Vermillion are hosting a plaque unveiling and lunch in Belmullet, almost 15km from the gas refinery.

While much of the town’s focus is currently on sale of the €13.7 million winning Lotto ticket in Carey’s newsagent, the project opening represents a significant milestone.

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Shell’s white elephant?

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Sunday 24 January 2016 09.00 GMT

Oil workers in Aberdeen will be watching events in the Hague this coming Wednesday as closely as anyone.

They will be hoping that some miracle occurs so that Dutch and other international investors in Shell suddenly swing against the £35bn merger with rival BG that is coming up for a final vote.

Ben van Beurden, the Shell chief executive, will almost certainly win the day and that could result in many Scottish oil workers being sacrificed in a blitz of job cuts needed to justify the tie-up.

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Shell’s plan to take over BG is still in the pipeline

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Screen Shot 2015-12-23 at 09.03.45Sunday 24 January 2016 08.59 GMT

It’s nine months since Shell announced it was buying BG Group in an agreed £47bn deal and almost everything has changed. Back in April, the oil price appeared to be recovering from its fall below $50 a barrel but the price has since plunged below $30. The International Energy Agency warned last week it could fall further in a world “awash” with oil.

Shell and BG shareholders vote on the takeover this week but, despite the industry’s dire state, they will approve the deal, now worth £35bn to reflect Shell’s depressed share price. This is partly due to faith in the ability of Shell’s chief executive, Ben van Beurden, to make it work. It’s also because most big shareholders don’t want to rock the boat in public with a company as powerful as Shell. Only Standard Life has broken ranks by declaring it would vote against.

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Shareholders smile on Shell-BG tie-up

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Screen Shot 2016-01-20 at 08.29.05Dominic O’Connell Published: 24 January 2016

ROYAL DUTCH SHELL is expected to seal its takeover of rival oil and gas producer BG this week, with shareholders of both companies likely to vote in favour of the tie-up.

The deal, the largest in oil and gas for a decade, will create a British giant, bringing together companies with market values of £89bn (Shell) and £33.5bn (BG).

Some Shell investors have criticised the deal and vowed to vote against it, saying the tumbling oil price has made it unattractive. Shell’s boss Ben van Beurden has said oil needs to be above $60 a barrel over 20 to 30 years for the deal to pay off. Brent crude closed last week at $32.18 a barrel.

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Shell-BG deal set to get the green light this week

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By GEOFF HOSun, Jan 24, 2016

Since the Anglo-Dutch oil giant unveiled its recommended takeover offer for BG last April, the price of crude oil has continued its descent and is now 41 per cent lower than when the deal was announced.

Screen Shot 2016-01-24 at 08.40.14On Friday the price of Brent crude oil closed at $31.18 (£21.86).

The collapse in the price of oil has led a number of Shell’s key investors, such as Standard Life Investments, to question whether or not it should proceed.

Despite their concerns, a number of them also own shares in BG and are believed to be prepared to approve the deal, reasoning that the two firms would be stronger together.

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Shell’s £36bn bid for BG is set to get boost from Brazil

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By Jon Rees For The Mail On Sunday: 24 JAN 2016

Shell’s bid to acquire BG Group has been given a boost by news from Brazil that a much feared tax hike will be avoided.

Fears of a larger tax bill on oil groups operating in Brazil had caused some investors to oppose the £36billion takeover of BG, which will create a group with major assets in the South American country.

Brazil’s National Energy Policy Council will this week announce that it will continue with the same way of calculating royalties due from oil and gas.

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BG investors should approve the Shell takeover even as the oil price languishes

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By Joanne Hart for The Mail on Sunday: 24 JAN 2016

It is crunch time for investors in BG Group. Last April, it unveiled a recommended £47billion takeover by Royal Dutch Shell. This week, more than nine months later, both firms are asking shareholders to approve the deal.

It has been an eventful gestation period. The oil price has virtually halved and Shell shares have moved in tandem, sliding from 2208p to 1388p.

The slump is important because the Shell offer is a mix of cash and stock – 383p in cash and 0.4454 Shell B shares for every BG share.

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BG GROUP BEING TAKEN OVER BY A COMPANY WITH A TOXIC NAZI HISTORY: SHELL

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PROOF IS PROVIDED IN THE BOOK THAT THE NAZIS ATTEMPTED TO SEIZE CONTROL OF ROYAL DUTCH SHELL. I HAVE THE PERMISSION OF THE UK NATIONAL ARCHIVE TO PUBLISH THE EVIDENCE.

By John Donovan

In a matter of days, I will be publishing an e-book entitled “Sir Henri Deterding and the Nazi History of Royal Dutch Shell.”

Publication is timed to coincide with another momentous episode in the history of Royal Dutch Shell –  the vote on the Shell BG Group merger.

SUMMARY OF MAIN CONTENT

In the years leading up to WW2, the Dutch founder of the Royal Dutch Shell Group, Sir Henri Deterding became an ardent Nazi. He financially backed the Third Reich and met directly with Hitler on behalf of Royal Dutch Shell.

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Shell confident of backing for BG takeover as crucial vote looms

Screen Shot 2016-01-23 at 20.43.08By Jillian Ambrose, Ben Martin: 7:00PM GMT 23 Jan 2016

A host of the world’s largest investors are expected to back Shell’s troubled multi-billion pound takeover of BG Group this week.

Shell and BG shareholders will vote on Wednesday and Thursday to approve the deal, which has been called into question by the plunge in the oil price. David Cumming, head of equities at Standard Life Investments, has been the most vocal opponent of the takeover, branding it “value destructive for Shell shareholders”.

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John Donovan

John Donovan, Co-founder Royal Dutch Shell Plc.com

John Donovan has a relationship with Shell stretching back decades. He was the co-founder of a sales promotion company, Don Marketing, that worked closely with Shell on an international basis.

A 30-minute video from the 1980’s featuring promotional games devised by Don Marketing for Shell can be seen on YouTube.

Shell Promotional Games: Introduced by John Donovan.”

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He has become widely known as an expert source on Royal Dutch Shell with unprecedented access to Shell insiders and for the last decade, has operated a unique non-profit website – royaldutchshellplc.com – focussed on Shell’s activities.

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Russians’ Anxiety Swells as Oil Prices Collapse

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By NEIL MacFARQUHARA version of this article appears in print on January 23, 2016, on page A1 of the New York edition

The global collapse in oil prices is reordering economic relations around the world, but the change is particularly daunting for Russia, which relies on energy exports for 50 percent of its federal budget.

In December, President Vladimir V. Putin told the nation that the worst of the recession — the economy shrank 3.9 percent and inflation hit 12.9 percent in 2015 — was over and that modest growth would return in 2016. He has been pushing the oil collapse as an “opportunity” that will wean Russia off energy imports and diversify the economy.

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Royal Dutch Shell – BG Group Merger: Investors Remain Divided

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By Muhammad Ali Khawar on Jan 22, 2016 at 8:14 am ESt

A few days before the shareholders’ meetings on January 27 and January 28, the proposed merger of Royal Dutch Shell plc (ADR) (NYSE:RDS.A) and BG Group has received major support from one of the biggest shareholders of Shell. According to Reuters, Norges Bank Investment Management said it will vote in favor of the proposed merger.

The $790 billion Norwegian fund is the fifth largest investor of European giant, Shell. It believes, amidst low oil prices, the deal will make both the energy companies stronger. The transaction will also be positive for the long-term interests of the companies’ shareholders, the bank added.

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Another low

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By Ed Crooks: January 22, 2016: Jan 22, 2016

Another week, another fresh 12-year low for oil prices. The trigger for the latest leg down in crude, which took US benchmark West Texas Intermediate close to $26 per barrel on Wednesday, was a report from the International Energy Agency warning that “the oil market could drown in over-supply”. For a third successive year, it looks likely that global oil supply will in 2016 exceed demand by more than 1m barrels per day, leading to a continued accumulation of stocks in storage. Could the oil price go lower still, the IEA asked rhetorically, and replied: “the answer to our question is an emphatic yes. It could go lower.”

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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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Hedge funds bet that shares in Shell and Sainsbury’s will fall further as both firms suffer disastrous starts to 2016

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By City & Finance Reporter for the Daily Mail: 22 JAN 2016

Hedge funds are taking bets that shares in Royal Dutch Shell and Sainsbury’s will fall further.

Shell, which is down nearly 15 per cent so far this year and is hoping to buy gas giant BG Group in a £36billion deal next month, has around 5 per cent of its shares out on loan.

Investors are ‘shorting’ its shares – borrowing shares and selling them with a view to buying them back at a lower price in future.

According to financial research firm Markit, £2.6billion of short positions have been registered in Shell, which means short interest now stands at a record high for the energy firm.

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Shell-BG merger gains support ahead of vote

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Shell’s business gamble, supported by oil prices at near record highs, is on the brink of paying off Photo: Newscast

By Jillian Ambrose: 21 Jan 2016

Key investment funds have voiced growing support for the planned £47bn merger of energy giants Shell and BG Group ahead of crucial shareholder votes next week.

Shell’s fifth biggest investor, Norges Bank Investment Management, said on Wednesday that it will vote in favour of the plan at the shareholder meeting on January 27.

The $790bn fund joins a growing group of shareholders in support of the deal, including smaller investment funds and investment advisory firms.

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Who’s afraid of cheap oil?

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The world is drowning in oil.

Jan 23rd 2016 | From the print edition

ALONG with bank runs and market crashes, oil shocks have rare power to set monsters loose. Starting with the Arab oil embargo of 1973, people have learnt that sudden surges in the price of oil cause economic havoc. Conversely, when the price slumps because of a glut, as in 1986, it has done the world a power of good. The rule of thumb is that a 10% fall in oil prices boosts growth by 0.1-0.5 percentage points.

In the past 18 months the price has fallen by 75%, from $110 a barrel to below $27. Yet this time the benefits are less certain. Although consumers have gained, producers are suffering grievously. The effects are spilling into financial markets, and could yet depress consumer confidence. Perhaps the benefits of such ultra-cheap oil still outweigh the costs, but markets have fallen so far so fast that even this is no longer clear.

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Fund houses poised to greenlight Shell/ BG takeover

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A raft of fund houses have revealed their hand and come out in favour of the deal, defying critics who argue that the fall in the oil price has made it unworkable for Shell. Kames is understood to be backing the deal with its Shell and BG shares and is understood to be encouraging all its fund managers to vote in line with the house view – contrary to some fund houses which allow the managers of listed trusts to back their clients in company votes rather than toeing the party line.

Rathbone chief investment officer Julian Chillingworth said the fund house would be voting for the deal on behalf of both Shell and BG despite the recent oil price slide. He said: “Our house view is that on balance this deal is good for Shell in the medium term and that it should go ahead,” adding “these assets do not come around too often”.

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Shell reveals that profits have nearly halved but receives major backing for its deal with BG Group

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Screen Shot 2016-01-21 at 11.26.34By LAURA CHESTERS FOR THE DAILY MAIL: 21 JAN 2016

Royal Dutch Shell revealed quarterly profits had nearly halved yesterday but received major backing for its deal with BG Group.

Shell said its fourth-quarter profit will be down by around 40 per cent to between £1.1bn and £1.3bn and its full- year earnings could drop to as low as £7.3bn for 2015 – well below the near £16bn it reported in 2014.

As markets plunged across the globe Shell’s shares plummeted 5.5 per cent or 74.5p to 1294.95p yesterday and BG’s fell nearly 3 per cent or 42.3p to 897p. Despite the chaos and the collapse in the oil price, Shell’s chief executive Ben van Beurden is proceeding with the proposed takeover.

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Pink Slips at Shell Oil

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Shell Oil must cut all Contractors from WIPRO, ACCENTURE AND IBM since these contractors are all under performers and these Wipro, Accenture and IBM Contractors are not having relevant experience but they bring all freshers/ Zero experienced people to work on IT projects and claim huge hourly rate that is equal to be paid for highly experienced people.

These WIPRO, ACCENTURE AND IBM companies including its PMO staff must be fired immediately to save future investments on business improvements.

The work/task that can be completed in one day will be completed in 10 days by these Contractors since they get paid for all these days and Looks like Shell Oil is paying for under performed employees that needs to be paid for highly performed employees.

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Oil plumbs new lows below $27 as rout persists

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U.S. oil is now flowing unfettered to Europe for the first time, “so it’s a battle royale.”

Markets | Wed Jan 20, 2016: 3:29pm EST: New York

U.S. oil prices crashed below $27 dollars a barrel on Wednesday for the first time since 2003, caught in a broad slump across world financial markets with traders also worried that the crude supply glut could last longer.

Oil has fallen more than 25 percent so far this year, the steepest such slide since the financial crisis, piling more pain on oil drillers and producing nations alike. Yet they keep pumping more oil into an oversupplied market.

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Oil’s Nightmare Scenario Dominates Davos

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Global Stocks on Brink of Bear Market as Oil Slides; Ruble Sinks

By Javier Blas, Grant Smith: Bloomberg.com: 20 JAN 2016

The first mantra of the oil crisis was “lower for longer.” Then “lower for even longer.” Now in Davos, oil executives are starting to talk — or rather, whisper — about a new nightmare scenario: “A lot lower for a lot longer.”

Oil executives, policy makers and banks said in the first days of the World Economic Forum that a recovery will remain elusive in 2016 as major producers keep pumping and China’s fuel appetite slackens. And they fret that prices could take another hit as Iranian crude freed from sanctions flows back on to world markets.

More from Bloomberg.com: The North Dakota Crude Oil That’s Worth Almost Nothing

“It is the third year in a row we have more supply than demand,” Fatih Birol, executive director of the International Energy Agency, told Francine Lacqua in a Bloomberg Television interview. “Prices will be still under pressure. I don’t see any reason why we have a surprise increase in the price in 2016.”

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SHELL JOB CUTS

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POSTED ON OUR SHELL BLOG: 20 JAN 2016

As one of the many let go by Shell in the recent cull in November I was not impressed by the way senior leaders clung to their jobs.

This is now going to get even worse in my opinion as Shell announces more job losses.

Even the inmates will be turning on each other as there is nobody left in the asylum and yet strangely the senior leaders still remain in place.

The same senior leaders who got us into this mess seem to think they are the best to get Shell out of it. Good luck boys, its great watching from the outside for a change.

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Shell’s profits dive ahead of BG deal shareholder vote

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20 JAN 2016

Royal Dutch Shell has reported a sharp drop in profits just a week before shareholders vote on its planned takeover of smaller rival BG Group.

For the fourth quarter it expects profits of $1.6bn to $1.9bn, less than half the $4.2bn it made a year ago.

It expects full year profits of $10.4bn to $10.7bn, below its $10.8bn guidance.

The oil firm has issued the preliminary results to enable investors to have up-to-date information on its performance ahead of the vote on 27 January.

Its shares fell 3.7% in early trading.

But chief executive Ben van Beurden said he was “pleased” with the results.

“The completion of the BG transaction, which we are expecting in a matter of weeks, will mark the start of a new chapter in Shell, to rejuvenate the company, and improve shareholder returns,” he added.

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Royal Dutch Shell / BG: A Marriage That Will Need Work

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Screen Shot 2016-01-13 at 08.05.25By HELEN THOMAS: Jan 20, 2016

As a reminder of why Royal Dutch Shell wants to buy BG Group , an ugly set of figures certainly does the job.

Amid criticism of the now-$47 billion deal ahead of shareholders votes later this month, both companies released early full-year results Wednesday.

Shell’s report card was enough to send its stock down 5% in early trading.

FULL ARTICLE

Shell Expects Sharply Lower Profit Amid Oil Slump

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By STANLEY REEDJAN. 20, 2016

LONDON — Royal Dutch Shell said on Wednesday that it expected profit for the fourth quarter of last year to be sharply lower than in the same period in 2014.

The company issued the preliminary estimates before a much-anticipated vote by Shell shareholders next Wednesday on the proposed acquisition of the BG Group, an oil and gas producer based in England.

Shell estimated that its profit for the quarter, excluding inventory changes and one-time charges, would fall around 50 percent, to between $1.6 billion and $1.9 billion, as lower oil prices cut sharply into revenue. The company posted profit of about $3.3 billion in the fourth quarter of 2014.

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Oil price plunge leads Shell to warn that 2015 earnings will more than halve, but it sees BG Group takeover as a ‘new chapter’

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  • Shell expects full year underlying earnings to drop to between $10.4bn (£7.3bn) and $10.7bn (£7.6bn), a sharp fall on 20’14’s $22.56bn (£15.9bn)
  •  Every $10 change in crude price knocks around $3bln (£2.1bn) off earnings
  • BG says its earnings dropped in 2015 as expected, but added that the results are in line or ahead of forecasts 

By JONATHON HOPKINS FOR THISISMONEY.CO.UK: 20 JAN 2016

Plunging oil prices have led energy giant Royal Dutch Shell to warn that its earnings are expected to more than halve for 2015, sending its shares over 4 per cent lower this morning.

The blue chip group, which is weeks away from completing a £38billion deal to buy rival BG Group, said it expects its full year underlying earnings to drop to between $10.4billion (£7.3billion) and $10.7billion (£7.6billion).

That would be slightly City below expectations and marks a sharp fall on the $22.56billion (£15.9billion) Shell reported for 2014. It will report its full year results on February 4.

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