Anglo-Dutch major Shell Completes BG Deal

Anglo-Dutch major Shell now owns the entire issued ordinary share capital of BG Group, it said in a London Stock Exchange announcement February 15. BG shares stopped trading at 8am GMT.

“This is an important moment for Shell,” said CEO Ben van Beurden. “It significantly boosts our reserves and production and will bring a large injection to our cash flow. We have acquired productive oil and gas projects in Brazil and Australia and other key countries. We will now be able to shape a simpler, leaner, more competitive company, focusing on our core expertise in deep water and LNG.”

Shell was counting on an earlier rebound in oil when it announced the cash-and-shares deal a little under a year ago. While the shares element of the deal was neutralised as both companies saw their shares fall, the oil price has kept falling and now, almost a year on, even $50/b, where it was last March, is considered a high price. Last week front-month Brent crude was trading around $30/b.

Most of the top executives including CEO Helge Lund have left. Only four were due to stay, including Steve Hill, who managed the LNG business; and the COO Sami Iskander. There has been speculation that Lund will resurface at BP. The UK major made two senior appointments earlier this month but said they were not related to the succession plan for Bob Dudley.

William Powell