BG acquisition raises Shell profile in north and east Africa


Issue 298 - 17 Apr 2015 | 3 minute read

The first big transaction in a predicted wave of industry consolidation prompted by the low oil price, the deal boosted the value of other rumoured bid targets such as Tullow Oil and Ophir Energy. Acquiring BG will increase Shell’s reserves by about a quarter and its production by some 20%, as well as delivering key assets in deep-water Brazil and the Queensland Curtis liquefied natural gas (LNG) project. Shell’s £47bn ($67bn) bid was priced at a 50% premium to BG’s share price, which has been depressed by concerns about the cost of its flagship Brazil and Australian projects, as well as controversy over the pay package offered to new chief executive Helge Lund.

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