Brazil's competition authority CADE has approved the US$70bn (£47bn) acquisition by Shell for the entire share capital of BG Group that was announced in April 2015. The companies produced a combined 212,250 boe/d in Brazil in May 2015, about 7% of total production; this figure could double to nearly 500,000 boe/d by 2020, thanks to their stakes in large oil plays: BG owns a 25% stake in the Lula field, while Shell holds 20% in the Libra prospect. BG and Shell expect to receive further regulatory clearances from all the countries where BG has operations, including the European Union, China and Australia, to complete the transaction by early 2016.
The two companies are complementary. By 2020, the combined group will have two strategic growth businesses – deep water and integrated gas – that could potentially each generate US$15-20bn/year of cash flow from operations. It will have upstream and downstream engines potentially generating a further US$15-20bn/year of cash flow and long term positions potentially adding US$10bn/year.