Shell has agreed to buy Canadian shale producer ARC Resources for $16.4bn, marking the energy giant's largest acquisition since it purchased BG Group a decade ago. The deal, which includes $13.6bn in cash and shares and the assumption of ARC's $2.8bn debt, comes five years after Shell sold its US shale business.
The acquisition will add approximately 370,000 barrels of oil and gas per day to Shell's production and boost its annual production growth from 1% to 4%. It also adds 2bn barrels to Shell's proved and probable reserves. Analysts had noted that Shell needed an acquisition or exploration breakthrough to counter declining output from its ageing fields.
Wael Sawan, Shell's chief executive since 2023, said the deal makes Canada a 'heartland' for the company. 'We are accessing uniquely positioned assets and welcoming colleagues that bring deep expertise which, combined with Shell's strong basin level performance, provides a compelling proposition for shareholders,' he added.
The purchase marks a major expansion of Shell's North American operations after it sold its Permian Basin assets to ConocoPhillips in 2021. ARC primarily produces gas and condensate from the Montney shale basin in British Columbia and Alberta. The deal aligns with Shell's strategy to become a leading player in liquefied natural gas (LNG), a sector in which it already owns or is involved with more than 30% of global capacity.
Shell also holds a 40% stake in the $40bn LNG Canada project on the country's west coast. The company is expected to report first-quarter results on 7 May, with analysts forecasting significantly higher trading profits due to market volatility from the Iran crisis.
