Shell buys BG to challenge ExxonMobil

Shell has offered to acquire BG, to create a company with oil and gas production second only to that of ExxonMobil

The acquisition will add 25% to Shell’s proved oil and gas reserves and 20% to its production, while giving the firm stronger positions in developing areas such as Australian LNG and Brazilian deep-water exploration. BG shareholders will own about 19% of the combined company. Shell says it plans to restructure the enlarged company by selling $30bn of assets over the years 2016-18. But it says capital spending will continue to be trimmed this year and next. Debt will be paid-down in and after 2016, and there will be a $25bn share buy-back programme subsequently. The enlarged Shell will have an oil and gas production of 3.7m barrels of oil equivalent a day (boe/d), based on 2014 production, w