Wednesday, April 8, 2015

Shell purchases BG Group for 70 billion dollars

Update: Things move fast in the world of energy as the exploration talks of yesterday, resulted in a firm deal today with Shell purchasing BG Gas for 70 billion dollars (full reviews can be found at the bottom of the page)

What could be a major shift for the fortunes of LNG development on the North Coast is playing out in the boardrooms of Europe this week, as Shell Oil is reportedly investigating its options when it comes to a purchase of the BG Group.

The deal which if completed would be one of the year's largest energy mergers has taken up much of the energy industry discussion in the last 48 hours, with the value of the purchase expected to be somewhere over 70 billion dollars US.

One aspect that many are suggesting is key to the proposed purchase, is the ability for both companies to eliminate any overlapping costs and duplication of projects.

A situation which might make for an interesting dynamic for the Northwest, as we've outlined on the blog in recent months, the BG Group's Ridley Island Project has been stalled since late last year.

Most recently BG called Madeline Whittaker back to England, leaving the Prince Rupert project without a President at the moment.

Shell in the meantime, is working out its own plan for an LNG development in the Kitimat area, one of four major companies involved in a consortium for the LNG Canada project.

Considering the current state of the oil and gas sectors, not to mention the cost of developing an LNG terminal, it would seem unlikely that both projects would move forward under a newly created company banner.

Shell has until May 5th to announce its intentions with an offer, or to advise that it does not intend to submit an offer for purchase.

The BG Group outlined the developments through an advisory on its website yesterday

You can review our past items on the BG File here, while background information on Shell's LNG Canada proposal for the Kitimat area can be examined here.

The latest of the news reviews on the percolating developments can be found below:

CNBC -- Cramer: BG will be big winner in merger with Shell
The Guardian -- Shell in talks to buy UK gas producer BG Group
The Telegraph -- Shell in talks to buy energy rival BG Group
New York Times -- Royal Dutch Shell in Talks for BG Group
National Post -- Royal Dutch Shell PLC Investors wary as energy giant pays premium for BG Group in $86 billion cash and share deal
Globe and Mail -- Shell strikes 70 billion dollar deal for BG (video)
Globe and Mail -- Shell-BG megamerger could impact fate of major B.C. LNG projects
Globe and Mail -- Shell in talks to buy BG Group in year's largest energy deal
CBC -- Shell to buy BG Group for nearly $70B
Business Insider -- BG Group shares are going through the roof after a colossal merger with Shell
Wall Street Journal -- Shell in Advanced Talks to buy BG Group
Barrons -- Royal Dutch Shell May Buy BG Group
The Age -- Shell said to be in talks to acquire BG Group

Note: Our headline for this item was revised to reflect the announcement of the purchase made on April 8th

No comments:

Post a Comment