Shell rolls the dice on BG takeover


Joining the ranks of such previous oil industry megadeals as the Exxon-Mobil merger, in 1994, and Chevron’s Texaco acquisition, in 2000, Royal Dutch Shell’s plan to acquire natural gas giant BG Group marks the biggest oil merger in a decade and could herald a new round of industry consolidation in the face of sluggish prices. More than that, it signals a huge gamble by new Shell CEO Ben van Beurden, who took over the venerable Anglo-Dutch company last year pledging to right a prolonged period of costly stumbles. Shell’s efforts to drill for oil in the Arctic have been set back by the cost of production in such harsh conditions, and in February the company announced it was indefinitely postponing development of a new mine in the tar sands of northern Alberta.

“This transaction fits with our strategy and our read on the industry landscape around us,” van Beurden…

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