WHILE Royal Dutch Shell said its commitment to the North Sea would not change with the planned £47billion acquisition of BG, news of the deal will only increase uncertainty about the future of the area.
Combining the extensive North Sea businesses developed by the two firms will result in both coming in for close attention as Shell looks to deliver the $2.5 billion (£1.7bn) annual synergies it expects the deal to generate.
With Shell highlighting the potential for the de-duplification of central functions, job cuts could be in prospect in Aberdeen following the deal.
As chief executive Ben van Beurden noted, Shell is already planning to cut more than 250 North Sea jobs to help reduce costs following the oil price slump.
Buying BG will increase Shell's exposure to the Central North Sea, an area that it has already signalled it is losing interest in. Chief financial officer Simon Henry has highlighted the challenges involved in trying to boost returns from the CNS off North East Scotland where there are many ageing fields.
While the tax breaks announced in the Budget helped, Shell says the industry needs to do much more to get costs under control.
Against that backdrop, Shell could be tempted to increase the pace of North Sea disposals so that it can focus on profitable long term plays off Shetland.
It could face challenges finding buyers that want to invest in the fields while the oil price remains low.
But analysts believe the low oil price is likely to encourage more oil giants to follow Shell on the road to consolidation. If that should lead to ExxonMobil acquiring a rival with big North Sea interests, such as BP, even bigger upheavals could be in prospect.
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