One small detail in Shell’s £47bn takeover of BG Group to consider: Stamp Duty. HM Treasury can look forward to a £235m windfall once the deal concludes.
Corporate buyers used to avoid the 0.5 per cent tax by using schemes of arrangement, where shares in the target company would be cancelled, followed by the issue of new shares by the bidder. However a change to company law last month closed the loophole.
The measure was announced in December’s Autumn Statement, but hasn’t attracted much attention since, possibly because it was only forecast to bring in about £65m per year. Read more
From Dealogic for your historical comparatating pleasure, the top ten largest mergers and acquisitions of all time (in nominal dollar value).
Shell’s cash and share offer for BG is the second biggest oil and gas deal so far, at $82bn, just behind of the 1998 takeover of Mobil corp by Exxon, worth $86bn.
Meanwhile, in the all-time deal value league, Shell BG places ninth. Tabulation below the fold. Read more
How much of the oil and gas sector’s asset valuations could be at risk from climate mitigation policy?
The International Energy Agency’s latest annual World Energy Outlook, released in November, followed the popular practice in long-term forecasts of using several scenarios. One involves global policymakers moving to limit atmospheric CO2 concentration to 450 parts per million, in order to limit to 50 per cent the probability of average temperatures rising 2 degrees or more.
The problem for fossil fuel companies is that could limit their ability to utilise all their reserves. Read more
Something of a scramble in the Gulf of Mexico late on Wednesday as Shell dispatched aerial monitors and an oil-spill response vessel to investigate a “light sheen” about 130 miles southeast of New Orleans. Given that the sheen is 10 miles long and one mile wide, there should be no surprise at the response in London on Thursday morning…
Shell is to close the FTSE 100’s last remaining final salary pension scheme to new hires in Britain, the FT reports. The move by Shell UK, which will take effect in 2013, comes as government ministers attempt to force public sector workers to pay higher contributions into schemes that would still be more predictable than those available to their private sector counterparts. Shell UK maintains one of the country’s best-funded pension schemes. At its last valuation at the end of 2010, it had a surplus.
Oil and gas supplies will struggle to keep up with world demand growth, making energy prices more expensive and more volatile in the long term, the head of Europe’s largest oil company told the FT. Peter Voser, the chief executive of Royal Dutch Shell, told the Financial Times: “We will have a lot of volatility ahead of us that we cannot avoid … for energy prices in general.” He added: “We most probably will see a tightening of the supply-demand balance and hence rising energy prices for the long term. I think we should just get used to that.”
An underwater pipeline from a North Sea platform operated by Royal Dutch Shell has leaked more than 200 tonnes of oil into the sea, the FT reports, making it the biggest spill in UK waters for the past decade. Shell disclosed the figure on Monday after it had been criticised for not providing an estimate of how much oil had been leaking from the flow line serving its Gannet Alpha platform, about 122 miles east of Aberdeen, since it discovered the leak last week.The company said it had significantly stemmed the leak and shut in the well but was still trying to stop the oil remaining in the pipeline from leaking. It estimated the current rate of leaking at “less than five barrels a day” but could not provide a figure for how much was left in the flow line. “It is a finite amount,” it added. The Telegraph says oil companies have been under pressure to release their oil spill response plans since BP’s Gulf of Mexico accident last year, and environmentalists last night won a significant victory with Cairn Energy’s decision to release its plan.
India’s Oil and Natural Gas Corp is in talks with foreign oil majors BG, Eni and Shell to sell stakes in deepwater developments off the country’s resource-rich eastern coast, as it seeks to replicate the lucrative $7.2bn deal struck between BP and Reliance Industries. The FT reports AK Hazarika, the chairman of India’s biggest oil and gas group, told the Financial Times that the state-owned group was looking for a partner with the technological expertise to exploit its vast but untapped deepwater oil and gas reserves. ONGC, which has a market capitalisation of $55bn, has already been collaborating with the British, Italian and Anglo-Dutch explorers but it is looking to deepen ties with foreign groups to boost the development of its 85 deepwater blocks in the Indian Ocean, according to Mr Hazarika.
Breaking pre-market news on Thursday,
- Credit Suisse Q2 net income falls 52 per cent, plans to cut jobs – statement, report.
Peter Voser, chief executive of Royal Dutch Shell, has held talks with Igor Sechin, Russia’s powerful energy tsar, about possible co-operation in exploration of the Arctic and the Black Sea as the country seeks alternatives to the failed strategic tie-up between Rosneft and BP, the FT reports. Coming just days after Rosneft’s proposed $16bn share swap with the UK oil group expired last week, the meeting between Mr Voser and Mr Sechin earlier this week in Moscow will heighten speculation that the Russian state oil champion is preparing to replace BP with another partner.
Breaking pre-market news on Monday,
- Diageo buys Turkish spirits maker Mey Içki for £1.3bn — statement. Read more
Breaking pre-market news on Thursday,
- Nippon Steel Corp and Sumitomo Metal Industries to merge – report. Read more
BP shares opened more than 4 per cent higher on Tuesday after the Daily Mail reported that Shell had come close to making a bid for the distressed oil major during the peak of its Gulf of Mexico oil-spill crisis last summer.
Royal Dutch Shell contemplated making a bid for its rival BP during the Gulf of Mexico oil spill, sources have told the UK’s Daily Mail. While the spill’s open-ended legal liabilities prevented Shell from making an offer, executives are said to remain interested in coming forward if other BP takeover offers are made in future. Fear that BP was vulnerable to a takeover by Exxon also motivated Shell to consider a counter-offer, the Mail adds. BP shares hit a six-month high on the report, Reuters reports. But BP’s legal problems go on, the FT reports. Overall, complainants from Alabama, Florida, Louisiana, Mississippi and Texas have filed more than half a million cases for oil spill damages between them.
Royal Dutch Shell and Gazprom have formed a strategic alliance little more than three years after an acrimonious dispute in which the multinational was forced to cede control of the giant Sakhalin II oil and gas project to the Russian company, reports the FT. The deal will pave the way for two of the world’s biggest gas companies to deepen cooperation in Russia and work together in other countries. The agreement, signed in Moscow on Tuesday, signals a recognition at the Russian company that it needs foreign allies to help globalise its gas business and expand further into oil.
Royal Dutch Shell is selling nearly a third of its stake in Australia’s Woodside Petroleum for $3.34bn, as the Anglo-Dutch oil major moves to redeploy funds in new projects including natural gas production, reports the FT. Shell is selling 78.34m shares in Woodside at A$42.23 each, retaining 24.27% of the company. The price reflects an 8.6% discount to Woodside’s Monday close of A$45.86 a share. Peter Voser, Shell chief executive, plans to sell $7bn-$8bn of assets by end-2011 in efforts to improve the group’s capital efficiency. The WSJ notes that the deal may enhance Woodside’s appeal as a takeover target, although the FT adds that Canberra could veto a bid by a foreign investor.
Six companies in the oil and freight industries have agreed to pay penalties and other payments totalling almost $237m to resolve bribery investigations by the US Department of Justice and Securities and Exchange Commission, the FT reports. The companies include Royal Dutch Shell, Europe’s largest oil and gas group; Transocean, the world’s largest offshore drilling contractor; and Panalpina, the international freight group based near Zurich. The charges relate to allegations of bribery in more than 10 countries, including Nigeria, Angola, Brazil, Russia and Kazakhstan, during 2001-07. The settlements reflect the SEC’s emphasis on investigating allegations of corruption outside the US, using the Foreign Corrupt Practices Act.
Breaking pre-market news on Friday,
- RBS reports Q3 operating loss of £1.14bn after Asset Protection Scheme charge — statement.
- Shell to sell interests in six Gulf of Mexico fields — statement. Read more
Some of the world’s biggest oil companies reported sharply higher third-quarter results on Thursday amid stronger crude prices and improved refining margins, the FT reports. ExxonMobil, the largest US oil company, beat analyst expectations with a 55% jump in 3Q earnings to $7.4bn from a year ago. Royal Dutch Shell, Europe’s biggest oil group, said 3Q profit rose 18% to $3.5bn. The underlying result, which strips out one-off items, was up an annual 88%. Italy’s Eni, meanwhile, saw a 47.5% rise in underlying 3Q net profit to €1.7bn ($2.36bn). The results are expected to set an industry trend, with analysts forecasting strong earnings from America’s Chevron and France’s Total on Friday. Despite the bumper profits, Lex notes, only one of the three oil giants raised its dividend: Exxon.
Two of the world’s biggest oil companies reported sharply higher third-quarter results on Thursday, fuelled by stronger crude prices and better refining margins, the FT reports. ExxonMobil, the largest oil company in the US by market capitalisation, beat analyst expectations by posting a 55 per cent jump in third-quarter earnings to $7.4bn, compared with the same quarter in 2009. Royal Dutch Shell, Europe’s biggest oil group, said its third-quarter profit had risen 18 per cent to $3.5bn on a current cost of supplies base, which removes the effect of price changes on inventories. The underlying result, which strips out one-off items, was up 88 per cent on a year ago. Italy’s Eni, meanwhile, reported a 47.5 per cent rise in underlying net profit to €1.7bn ($2.36bn).
European oil giant Royal Dutch Shell has promised to deliver new growth as it reported a substantial rebound in profits and rising production in 2010′s third quarter, the FT reports. Third-quarter profit rose 18 per cent to $3.5bn on a current cost of supplies basis — a closely-watched post-tax measure that removes the effect of price changes on inventories. The results were driven by higher oil and gas prices and greater cost efficiency. Net profit rose by 6.5 per cent, the WSJ adds. Shell’s results may set a trend for Exxon, which reports later on Thursday, if not for BP, which continues to struggle with costs arising from the Gulf of Mexico spill.
Typical. You can clear out staff, send in a new chief executive and make a massive shift to safer operations — but in the end, floating the possibility that you’ll restore the dividend is what really moves you up in the market:
Royal Dutch Shell is in exclusive talks with Finnish fuel distributor St1 to sell the oil major’s Swedish refinery, the companies said on Monday, reports Reuters. If agreed, it would be the second European refinery deal for Shell in under a month, after the sale of its German refinery in late August. Both sites are relatively small plants that supply local markets. A Shell spokesman said the current talks included the Gothenburg refinery but gave no further details.
Some of Europe’s top companies on Thursday reported stronger-than-expected earnings, highlighting the strength of the corporate recovery across the continent, reports the FT. Key names such as Siemens, Royal Dutch Shell, Volkswagen and BASF all saw second-quarter profits substantially beat analysts’ forecasts. Analysts now expect European earnings to rise about 25-35% this year before tapering to 10-15% next year. Industrial companies have led the recovery after earnings plunged last year. Whatever happened, asks Lex, “to the fabled doube-dip?”
Royal Dutch Shell has defended deep-water drilling as having ‘an important role to play’ in global energy production despite BP’s spill in the Gulf of Mexico, amid a 94 per cent rise in profit over the second quarter, the FT reports. Shell warned that trading outlooks for the year remained uncertain, however, according to Bloomberg. Quite — the era of global oil giants is over, writes Nick Butler, a former BP strategist, in the FT. ConocoPhillips at least is selling its full stake in the Russian oil and gas firm Lukoil, the WSJ reports.
Breaking pre-market news on Thursday,
- Royal Dutch Shell Q2 earnings $4.5bn; $7-8bn asset sales planned — statement. Read more
Four of the world’s biggest oil companies will announce on Thursday that they are pooling $1bn to form a joint venture to develop a deepwater Gulf of Mexico oil spill response and containment system, the FT reports. ExxonMobil, Royal Dutch Shell, Chevron and ConocoPhillips will each initially invest 25 per cent in a new standalone company, according to sources involved in the plans. BP has not been included.
The share price of Royal Dutch Shell’s suddenly saw a ghost on Thursday afternoon.
The world’s biggest oil companies are reviewing their current partnerships with BP and rethinking their willingness to agree new projects in which BP designs the oil well and runs the operations, the FT reports. ExxonMobil, Chevron, Total and Royal Dutch Shell have all willingly partnered BP over the years but have sought to distance themselves following revelations about BP’s well design and operational decisions at the Macondo well.
As BP’s oil leak disaster adds to concerns about growing regulatory and safety risks of oil, coal and other conventional energy sources, shale gas is burnishing its reputation as the sexy new energy play.
While the complex process of extracting gas from shale rock has drawn criticism about its environmental impact, the magnitude of BP’s Gulf of Mexico oil disaster might overshadow those concerns. Read more