Shell aims to invest billions in Brazil
Despite a broad drive to cut spending in the face of persistently low oil prices, chief executive Ben Van Beurden remains steadfast in his plans to buy BG, which will transform Shell into the world’s biggest liquefied natural gas (LNG) supplier.
The group has announced plans to sell around $30bn in assets between 2016 and 2018 to improve its balance sheet and focus on its core deepwater oil and LNG business. The BG deal will make Shell the largest foreign investor in Brazil’s coveted deepwater oil fields.
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Hide AdAccording to several sources, it has earmarked up to $5bn for new acquisitions, mainly in Brazil where state-run oil company Petrobras is selling assets worth nearly $14bn amid a vast corruption scandal that has engulfed the company and the government.
Shell, which expects oil prices to return to $90 a barrel by the end of the decade, is also looking at acquisitions in other future key regions including East Africa, which has huge reserves and where BG is developing several gas fields in Tanzania, the sources said.
Any new spending, however, is likely to raise eyebrows among investors already worried about Shell’s ability to complete the BG deal.