Shell acquires Canadian oil and gas producer for 13.6 billion
Shell is putting $13.6 billion on the table to acquire Canadian oil and gas producer ARC Resources. With this, the energy giant aims to replenish its oil and gas reserves.
ARC Resources is engaged in the exploration, development and production of natural gas and crude oil and is one of Canada’s largest gas producers. In a press release, Shell explains why it is interested in the acquisition. “ARC has a high quality resource base that can be mined at low cost and which ties in with Shell’s existing operations in Canada, including a liquefied natural gas (lng) plant on the country’s west coast, in which Shell has a large stake.”
With the transaction, for which it is putting $13.6 billion (€11.5 billion) on the table, Shell will acquire two billion barrels of reserves. These are welcome, as last year the company had only eight years of production “reserve life”, or proven reserves to sustain current production levels. The acquisition will increase Shell’s production capacity by 370,000 barrels of oil equivalent per day.
The Dutch-British energy giant hopes the acquisition will thus generate double-digit returns. “This makes Canada a core region for Shell,” echoed ceo Wael Sawan. For Shell, the purchase is the largest transaction since it took ownership of gas giant BG for $64 billion in 2016.
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