33759
Shell-BG Deal Works With $50 Oil
Energy

Shell-BG Deal Works With $50 Oil

Royal Dutch Shell has told investors its purchase of BG can work even if oil prices average $50 a barrel for two years, its lowest estimate to date as it seeks to secure shareholder support for the $51 billion deal amid plunging crude markets.
The Anglo-Dutch group is confident investors will back the deal at a Jan. 27 meeting, even though crude prices are languishing near 12-year lows of around $32 a barrel and it faces a cut to its credit ratings due to higher debts, sources with knowledge of its meetings with analysts and investors said, Reuters reported.
Shell's finance chief, Simon Henry, told analysts the company conducted stress tests that showed it could withstand oil at $50 a barrel over the next two years, the sources told Reuters.
A Reuters poll on Monday showed analysts expect benchmark North Sea Brent crude futures to average $52.52 a barrel this year. When Shell announced the deal in April 2015, with oil trading around $55 a barrel, many investors saw it as a bold move to buy a weakened rival on the expectation that prices would recover to around $90 per barrel within three years.
Initially, Shell indicated the combined group would be profitable with prices in the mid $70s a barrel. Last month, it said the merger would work in the low $60s, as it identified new synergies and cost-cutting opportunities.

 

Short URL : http://goo.gl/MFzUTh
  1. http://goo.gl/0J67If
  • http://goo.gl/2oPFVf
  • http://goo.gl/Yt87p0
  • http://goo.gl/QrZqnU
  • http://goo.gl/iuCwbY

You can also read ...

China Rejects US Sanctions, Vows to Continue Iran Crude Purchase
As the US and Iran continue to trade barbs over the...
India Vying for US Waiver
India, the second biggest crude customer of Iran, may cut its...
Venezuela Braces for Pricey Gasoline
Gasoline prices in Venezuela will soon catch up with world...
Zanganeh to Attend OPEC, Non-OPEC Committee Meeting
Iran's Oil Minister Bijan Namdar Zanganeh will attend a...
S. Korea Iran Crude Imports Up 15%
South Korea’s imports of Iranian crude rose around 15% in July...
Indonesia Cuts Oil Imports
Indonesia’s PT Pertamina will get an extra 225,000 barrels per...
UK's Quercus Halts Iran Renewable Project
British renewable energy investor Quercus said it will halt...
NPC Not Worried About Exports
The National Petrochemical Company is not concerned about...

Trending

Googleplus