Photo Feature

Coming out of its shell

At a time when crude oil prices have crashed, Royal Dutch Shell has taken the axiom to heart by buying out BG Group

When the going gets tough, the tough get going. At a time when crude oil prices have crashed by over 50%, Royal Dutch Shell, Europe’s largest oil explorer by market value, has taken the axiom to heart by buying out BG Group, the UK’s third-largest energy producer, for about £47 billion ($70 billion) — a near 50% premium on BG’s last traded price. This deal — the biggest oil and gas M&A in a decade — will create an entity worth over $296 billion in value, which will emerge as the largest LNG producer among international oil companies. It would be interesting to see if BG, as part of the new entity, now goes ahead with the proposed $9-billion write-down of oil and gas assets that it had indicated prior to the deal.