Here’s What Shell Gets From BG Group

Shell

As everyone now knows, Shell made a $70 billion offer to buy the BG Group, a mostly upstream oil company that posted $6.5 billion in profits in 2014. Shell essentially paid around 10 times earnings. If the deal passes anti-trust lawyers from Brazil to Australia, then this is what Shell will add to its oil riches.

Oil and Gas Production: 606,000 barrels of oil equivalent per day.

Proven Reserves: Around 3 billion barrels world wide. Probable reserves add another 3.5 billion on top.

Successful Wells: 9

Years of Reserves/Production: 30

Biggest Investments:
Australia: $3.9 billion
Brazil: $2.4 billion
U.K.: $500 million
Egypt: $500 million
Norway: $400 million

Biggest BG Producer Nations:
U.K.: 105,000 barrels of oil equivalent per day (boed)
Kazakhstan: 85,000
Brazil: 78,000
Trinidad & Tobago: 65,000
Egypt: 62,000
Bolivia: 48,000
U.S.A.: 39,000
Thailand: 39,000
Australia: 34,000
Tunisia: 32,000
India: 18,000

An FPSO owned by Petrobras and the BG Group in the Santos Basin offshore Brazil. Shell will take that, and rights to wells in four of Brazil’s most prolific deep sea basins.


Plus exploratory wells in Canada, Colombia, Honduras, Kenya, Myanmar, Tanzania and Uruguay.

On Wednesday, Shell Oil CEO Ben van Beurden said Brazil and Australia were the two key reasons for going after BG. Both countries have been the source of the group’s biggest foreign investment.

In Brazil, one of the assets Shell will acquire if the deal is permitted is BG production in the Santos Santos Basin, a prolific offshore Brazil well. BG added two new floating production, storage and offloading (FPSO) vessels in 2014. The flow rates from their wells in Santos are among the best in the industry. BG Group’s share of production reached a record breaking 125,000 boed in January 2015.

Beurden has a reason to cite Brazil in his conference call Wednesday with investment analysts. New FPSO vessels are supposed to come onstream towards the end of 2015. Shell will take those.

Downunder in Australia, LNG production is on the rise and Shell will have rights to BG’s roughly 690,000 boed estimated for this year. BG Group expects total operating profit for the LNG Shipping & Marketing business in 2015  to be around a billion dollars, based on January’s oil price.