Royal Dutch Shell earlier this week completed its $50 billion acquisition of British oil and gas firm BG Group. The deal strengthens Shell’s position in the global LNG market and makes it the largest foreign oil company in Brazil.
The Wall Street Journal notes that Shell’s new larger footprint in Brazil presents new challenges for the Dutch firm there, given the high debt load and corruption scandals of its primary partner Petrobras. Additionally, restrictive laws governing the operation of Brazil’s rich pre-salt oil reserves have led many foreign oil companies to leave the country. Shell CEO Ben van Beurden expressed hope the pre-salt field restrictions would change and said his company is not exposed to the Petrobras scandal.
Shell and BG announced last month they would lay off 10,000 employees and direct contractors over the next two years. The deal is expected to reduce Shell’s operating costs by $3 billion this year.
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