Royal Dutch Shell Plc says its proposed $70 billion takeover of BG Group Plc will boost dividends and share buybacks for investors. North Sea workers in fear of their jobs after a collapse in oil prices will hope they’re as lucky.
Shell, employing about 2,400 across the North Sea, targets $2.5 billion of pretax “synergies” a year across the globe from the deal, including staff cuts.
“There are no guarantees in life,” said Chief Executive Officer Ben Van Beurden, asked if the deal would lead to cuts in the U.K. “Irrespective of what happens, we will have to look at how we make the North Sea a strong and healthy province again.”
Even before the latest plans, The Hague-based company said March 26 that about 250 positions would go in Aberdeen, the Scottish city at the center of the U.K. oil and gas industry.
“We expect synergies globally, which would include job reductions and office consolidation,” Kayla Macke, a Shell spokeswoman, said Wednesday in an e-mailed reply to questions. Details will be provided later, she said.
Baker Hughes said its rig count for March was down 94 from the same time last year.
The company published its international rig count for the third month of 2015.
It said rig count was 1,251 down 24 from the 1,275 counted in February.
Royal Dutch Shell has splashed out £47 billion for Britain’s BG Group in a move that could trigger a round of mega-mergers across the industry.
Shell’s swoop for BG, which is due to complete early next year, is the biggest takeover in the sector since US firm Exxon’s purchase of Mobil in 1998.
It boosts Shell’s oil and gas reserves by 25% and its production by 20% and comes at a time when the industry is looking to become more efficient and reduce costs in the face of the recent slide in energy prices.
BG Group, which employs about 5,200 staff in 24 countries, is seen as attractive to Shell because of its growth projects in Brazil and Australia.
SNP MPs can “guarantee” that support will be delivered to the oil and gas industry by holding the Westminster parties to account, according to Nicola Sturgeon.
Previous UK governments have “played fast and loose” with the sector, Scotland’s First Minister said, as she campaigned in Aberdeen ahead of a second televised election debate in two days.
She pledged that “SNP MPs at Westminster will speak as strongly for the North East in Westminster as we have always done at Holyrood”.
The SNP leader joined Kirsty Blackman and Callum McCaig, the party’s respective candidates for Aberdeen North and Aberdeen South, on the campaign trail in the Castlegate area.
“The North East of Scotland has been let down by Labour and the Tories for generations - but with austerity continuing to bite, now more than ever the area needs a strong voice at Westminster to truly stand up for their interests,” Ms Sturgeon said.
BG boss Helge Lund is set to enjoy a bumper pay package that could be worth more than £20 million, despite agreeing to a takeover just two months into the job.
Mr Lund is likely to stay on until the completion of the deal, expected to take about a year, which will see the exploration firm swallowed up by Royal Dutch Shell.
The scale of his planned remuneration caused an outcry last year before it was trimmed slightly and pegged to stringent performance criteria by the company as it sidestepped a potential shareholder revolt.
Iona Energy said the Huntington oilfield is set to resume full production once access to the Central Area Transmission System (CATS) has become available.
The field has been operating under gas export restrictions since October 2014, which has reduced the rate of oil production from the field.
However Iona Energy said it has been informed by the field’s operator E.ON that the CATS operator has confirmed full resumption of normal operations.
Royal Dutch Shell Plc’s acquisition of BG Group Plc not only increases access to deep-water fields in Brazil, but provides greater heft in dealings with Petroleo Brasileiro SA, the local partner mired in a graft probe.
With Petrobras engulfed in Brazil’s largest ever corruption scandal, BG and other partners are struggling to communicate with the state-controlled producer’s management to address delays to development plans.
For BG and Galp Energia SGPS SA, which are relying on future Brazilian output to bolster cash flow, this uncertainty is a bigger problem than for Shell, which has a larger and more diversified portfolio.
“Shell has more patience and financial strength,” Juan Ramon Fernandez Arribas, an independent analyst based in Madrid, said in an e-mail. “It can wait more to develop its projects and is a more solid operator than BG. That’s a big advantage in the discussions with Petrobras.”
Shell has sought an injunction against Greenpeace activists after Arctic drilling protesters boarded an oil rig in the Pacific.
Half a dozen Greenpeace members had approached the rig, the Polar Pioneer, in inflatable boats and scaled the platform.
The Transocean-owned rig is being sent on a vessel called the Blue Marlin to Seattle before heading to the Arctic, according to Greenpeace.
Zenith Energy said it has completed well operations on the Europa Oil & Gas Kiln Lane well in North-east Lincolnshire.
The PEDL 181 licence was the first full project management contract for Zenith Energy.
It was spudded in February this year and reached a total depth of 2,291 metres last month.
The well has since been plugged and abandoned after Europa announced the wireline logging and subsequent petrophysical analysis indicated that the sandstones encountered were water wet.
Noble Energy said it has reduced its headcount by more than 200 positions in the US.
The announcement comes just days after EnQuest said up to 146 positions could go following consultation talks regarding a move to a three on, three off shift rotation.
The move has seen around 100 jobs go in Houston, with a number of those being from Noble’s headquarters.
Staff also affected worked at the company’s offices in Denver, Colorado and Pennsylvania.
A proposed cash and shares deal between the two companies will leave BG shareholders owning about 19% of the combined company.
For oil major Shell, the addition of BG will increase the company's proved oil and gas reserves by 25%.
It will also boost production by 20% and provide Shell with a much stronger position in new oil and gas projects, particulary in Australia and in Brazil.
The deal will also generate synergies of around $2.5billion a year.
Royal Dutch Shell’s £47 billion swoop for BG Group ensured the FTSE 100 Index rallied back above the 7000 barrier as traders celebrated one of the biggest takeover deals of recent years.
BG shares jumped 37% or 339.85p to 1250p after the cash and shares offer from Shell valued the UK-based business at 1367p a share.
The FTSE 100 Index was 35.2 points higher at 6996.3 but had risen as high as 7012 amid the euphoria over the BG deal.
BG Group has backed a takeover worth £47billion from oil major Royal Dutch Shell.
But what do we know about the Reading-based company?
Its roots go back to the 1950s, when the UK's Gas Council began putting resources into liquefied natural gas (LNG) as a potential replacement for manufactured gas.
Then, in 1986, British Gas - which contained a major part of the UK's exploration business, was privatised in 1986.
Just over 10 years later British Gas was demerged into two separate companies, with BG taking charge of exploration and production and its international downstream operations, as well as its British transmission and distribution business called Transco.
Shares in BG Group have risen by more than a third after it was revealed the company was in talks with oil major Shell.
The deal, which broke last night, began as BG Group confirmed speculation it was in talks with the company.
It has since been confirmed that its board has backed an offer from Shell for a £47billion takeover.
The companies have unveiled details of the merger in a statement to the London Stock exchange.
Russia’s $400 billion gas-supply deal with China in 2014 took almost a decade to pull off. While state-run exporter OAO Gazprom pushes to cement ties, lackluster energy markets suggest a second agreement may be slow to follow.
Crude oil, the main component of Russia’s gas-pricing formula, has tumbled almost 40 percent in six months, weakening Gazprom’s bargaining power. The slump has reduced the funds available for a second Russian pipeline to China.
“The lower oil price has caused too much trouble” for financing two pipeline projects, said Keun-Wook Paik, a senior research fellow at the Oxford Institute for Energy Studies. Russia may seek to prioritize the second pipe, cheaper and quicker to build yet less useful for China, which knows “leverage is on their side,” he said.
Royal Dutch Shell Plc is set to acquire BG Group Plc in what would be the largest energy deal this year, according to a person with knowledge of the matter.
Buying BG would be Shell’s largest acquisition since the 40.7 billion-pound ($60.3 billion) merger of its Dutch and UK parent companies in 2005, according to data compiled.
It would unite the UK’s first- and third-largest natural gas producers.
Aberdeen-based technology group Cortez Subsea has boosted its chances of making a splash in the Malaysian oil and gas market by teaming up with a local engineering firm.
The partnership with Oceancare Corporation (OCBS) essentially gives Cortez a base in the region from which it can sell its products, a move that will cut delivery times for potential clients.
The pact could also help Cortez take advantage of a scheme for developing indigenous oil and gas manufacturing businesses in Malaysia.
Petronas, an energy firm owned by the Malaysian Government, admitted 79 businesses to its so-called Vendor Development Program (VDP) between 2004 and late 2013, awarding contracts worth a total of more than £1.4billion.
Libya’s elected government said it is opening an overseas bank account for crude revenue to bypass rival Islamist authorities in the capital, adding uncertainty to the North African country’s efforts to boost exports.
“This measure is meant to ensure liquidity for the government without going through the central bank in Tripoli,” Fathallah Al-Suhaiti, chairman of the elected parliament’s national security and defense committee, said Tuesday by phone from Tobruk in eastern Libya.
Libya, holder of Africa’s largest oil reserves, has been split since last year when a coalition of Islamist militias captured Tripoli, forcing the elected government to move to the eastern region.
The conflict has damaged or shut oil fields, pipelines and ports, reducing the nation’s crude output to no more than 600,000 barrels a day. Libya pumped almost 1.6 million barrels before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule.
An engineering company which sells services to the oil and gas industry is to close, with the loss of more than 100 jobs.
AKD Engineering in Lowestoft, Suffolk, announced its intention to close the business from the end of June, following several years of “substantial“ losses, compounded by the current downturn in the oil and gas sector.
No orders have been placed for new drilling rigs so far this year, though the boom for yards is far from over due to their massive collective backlog built up in recent years.
RS Platou drilling analysts say that order books as “still apparently solid”, though neither the yards nor drilling equipment manufacturers are likely to be as “comfortable as their order-books indicate”.
“Yards will be questioning whether their order-books are large enough to bridge the current down-cycle,” say the analysts.
“According to current order-book (before delays) 81% of units will be delivered in 2015 and 2016.
Petro Matad has entered into a farm-out agreement with BG Group for a 78% interest in blocks IV A V in Mongolia.
The deal will help to fund the company’s share of mutually agreed $28million work programme.
Under the terms of the agreement, BG Group has committed to covering Petro Matad’s portion of the agreed $28million programme.
ONS Norway has been cancelled.
The Stavanger-based ONS Foundation blames low oil prices, low activity and great uncertainty in the industry have meant that too few exhibitors have registered for the show, which was to have been staged in August, just weeks before Offshore Europe.
The foundation said that the exhibitor registration was good until early in the year before it stagnated. There have also recently been a number of cancellations by companies that are struggling.
“Too few exhibitors means that we cannot create a meeting place with the famous ONS quality that exhibitors expect and deserve. We must take the consequences,” said CEO Leif Johan Sevland, a former mayor of Stavanger.
Baron Oil has temporarily shut in production at one of its wells as storage facilities are too full.
The company said the Nancy #1 well – which had been running at 400bbls per day – was temporarily shut-in over the Easter weekend.
Scotland would now be in “economic trauma” if it had voted for independence in the referendum, former prime minister Tony Blair has claimed.
Mr Blair said the country would have been left trying to negotiate its currency during the oil downturn, meaning “Tory cuts ... would be dwarfed by the SNP cuts necessary to keep the Scottish economy afloat”.
The former Labour leader also described last September’s referendum as a “near-death experience” for the UK in which it came close to being relegated from “the Premier League of nations”.
The SNP said the intervention would simply remind people of Mr Blair’s “toxic legacy” from his time in power.
Mr Blair made the comments as he gave a speech in Newton Aycliffe, County Durham, in his former Sedgefield constituency.
Afren has agreed in principle to appoint a new chief executive.
It comes after the company's former chief executive and chief operating officer were fired, amid claims of gross misconduct and unauthorised payments.
Alan Linn, who is currently a consultant to Afren's board, will take up the role.
