What does Shell’s merger with BG say about oil?

When oil prices collapsed in the late 1990’s, oil producers responded with a merger frenzy that led to a consolidation of the industry and the formation of a handful of ‘supermajors’; giants who could marshal the capital and technology needed to extract oil from increasingly tight spots around the world.Another oil price collapse could well prompt the same response. Shell (ENXTAM:RDSA) and BG (LSE:BG) will merge in a US$70bn deal to create an industry titan and the world’s largest producer of LNG.After years of poor production and stagnant reserve growth, Shell is an eager buyer.  BG will instantly lift reserves...

When oil prices collapsed in the late 1990’s, oil producers responded with a merger frenzy that led to a consolidation of the industry and the formation of a handful of ‘supermajors’; giants who could marshal the capital and technology needed to extract oil from increasingly tight spots around the world.

Another oil price collapse could well prompt the same response. Shell (ENXTAM:RDSA) and BG (LSE:BG) will merge in a US$70bn deal to create an industry titan and the world’s largest producer of LNG.

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