Shell's proposed merger with BP faces new questions.
Shell's proposed merger with BP faces new questions. - 
Listen To The Story

On Wednesday, Shell shareholders are expected to vote on the merger between the oil company and natural gas producer BG. It’s the biggest merger in the industry in a decade, and the largest Shell has ever embarked on. 

When the merger was announced nine months ago, oil prices were a lot higher than they are now. Oil hit a 12-year low recently. This $69 billion deal gives Shell access to the foreign oil and gas reserves BG has in its portfolio, including large reserves in Australia and Brazil.

Amy Myers Jaffe, executive director of energy and sustainability at UC Davis, says those two countries are stars of oil and gas production. But they’re also expensive places to work in. She says the deal seems less appealing now oil prices have plummeted.

“And of course it looks even less attractive given the end of what people call the commodities super-cycle,” she said. “So is China’s economy ever going to rebound and need commodities the way it did over the last decade?”

She says Shell is positioning itself as poised for success when — and if — energy demand grows.

“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VA

As a nonprofit news organization, what matters to us is the same thing that matters to you: being a source for trustworthy, independent news that makes people smarter about business and the economy. So if Marketplace has helped you understand the economy better, make more informed financial decisions or just encouraged you to think differently, we’re asking you to give a little something back.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.