Shell has told its investors its proposed acquisition of UK firm BG Group would still be viable even if oil prices average $50 per barrel for two years. Via Reuters, Shell’s agreement to buy BG last April was seen as a bet that prices would recover to around $90 per barrel within three years. At the time, Shell said the combined firm would be profitable at $70 per barrel. Shell’s finance chief on Wednesday the company had conducted stress tests based on a prolonged $50 per barrel scenario. The companies’ shareholders will vote on the merger at the end of this month.
Meanwhile, analysts expect upstream sector M&A activity to pick up this year whether oil prices recover or continue to languish.
