Shell May Need $100-per-Barrel Oil to Make BG Deal Work
Article by Tim Mullaneypublished 9 April 2015 byTheStreet.com
Shell May Need $100-per-Barrel Oil to Make BG Deal Work
NEW YORK (TheStreet) — How aggressive was Royal Dutch Shell’s (RDS.A – Get Report) $70 billion deal to buy British oil and gas producer BG Group (BRGYY)? So aggressive that oil may have to rebound all the way to $100 a barrel by 2020 to justify the price that Shell paid, according to an analysis by the Norwegian research firm Rystad Energy.
The price can be taken as a measure of the pressure Shell faces to get its hands on new assets in an environment in which many offshore oil and gas assets are expensive to bring to market, and because Shell hasn’t been a major force in fracking in the United States, said Per Magnus Nysveen, head of analysis at Rystad.
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