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Shell due to complete BG takeover on Feb 15

Wednesday, December 23, 2015 - 07:03

[LONDON] Energy major Royal Dutch Shell said on Tuesday it was aiming to complete its takeover of smaller rival BG Group on February 15 next year.

The £55-billion (S$114.5 billion) deal announced in April has already been cleared by authorities in Australia and Brazil, as well as the European Commission.

The two energy companies are still waiting for the go-ahead from shareholder meetings scheduled on January 27 for Shell and January 28 for BG.

Due to the drop in world oil prices, Shell said it was revising down its estimate for capital expenditure next year to US$33 billion from the previous estimate of US$35 billion.

The amount will be 30 per cent lower than 2014 levels.

"We aim to reduce costs and capital spending once again in 2016, as we combine Shell with BG, and continue to take impactful decisions on portfolio and options," Shell chief executive Ben van Beurden said in a statement.

"This is to ensure that Shell can continue to finance the investment programme and the dividend, despite the downturn," he said.

The takeover is intended to strengthen Shell's position in the liquefied natural gas (LNG) market in a context of tough market conditions.

Crude oil prices have sunk more than 60 per cent from above US$100 in summer 2014 owing to the oversupply as well as weak oil demand growth, a global economic slowdown and a strong dollar.

AFP