The US$70 billion Shell and BG Group merger cleared Brazilian regulatory approval, bringing it a step closer to its set completion date of early next year, according to a Reuters report.
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Brazil's Libra field activity. From Petrobras. |
Brazil's Council for Economic Defense (CADE) said on Wednesday preliminary approval to the transaction was given without restrictions. UK-headquartered deepwater and LNG-focused BG said that if no appeals were lodged or referrals made in the next 15 days, CADE's clearance would become final. A spokesman for Shell confirmed the approval and the 15-day appeals period, the Reuters report said.
Three weeks ago on 16 June, the supermajor deal cleared a major obstacle by receiving an early termination of the US antitrust waiting period from the US Federal Trade Commission.
Should the deal be ultimately approved, it will be one of the first since the beginning of the millennium. It will add about 25% to Shell’s proven oil and gas reserves and 20% to production, including LNG and deepwater assets in Brazil (and Australia), and enable an increase in asset sales to $30 billion by 2016-18.
According to Simmons & Co., BG's Brazilian pre-salt assets are "the crown jewel" of the deal.
"The resource quality of said assets is unquestionably impressive. Above ground risk associated with Petrobras' operatorship is also significant. The combination has the potential to increase Shell’s Brazil production from 52,000 boe/d in 2014 to an estimated 550,000 boe/d by the end of the decade," Simmons & Co. said.
Shell made the multi-billion dollar cash and share offer for BG in April that GlobalData called the largest mega deal since Exxon and Mobil merged in 1998.
The group’s combined equity LNG capacity is expected to reach 45 MTPA by 2018 vs. Shell’s current capacity of 26 MTPA in 2014 (an increase of 78%), according to Simmons & Co.
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Shell, BG merger clears US regulatory hurdle
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