The European Commission has approved the Royal Dutch Shell’s proposed acquisition of British natural-gas company BG Group for approximately $70bn.


The deal, which has already secured approval from the Brazilian competition authority in July, is now awaiting regulatory permits from Australia and China.

While clearing the deal, the commission found that the deal will not give benefit to Shell in terms of market power in oil and gas exploration, LNG liquefaction or LNG wholesale supply.

The commission also concluded that the merged entity’s market share would remain limited in the exploration for oil and gas reserves, the liquefaction of LNG and the wholesale supply of LNG, and will not allow Shell to influence prices of oil and natural gas in Europe.

During investigation, the European Commission also found that Shell can’t stop competitors from accessing to its liquefaction facilities that supply LNG into the European Economic Area (EEA) or from gas transportation and processing facilities in the North Sea.

Shell CEO Ben van Beurden said: "The recommended combination with BG is a springboard to change Shell into a simpler and more profitable company, making Shell more resilient in a world where oil prices could remain low for some time."

The investigation for the deal primarily focused on three broad markets including exploration for oil and gas reserves, the supply of natural gas and the liquefaction and supply of liquefied natural gas, where the operations of the two firms overlap.

The commission added: "This is mainly because significant additional liquefaction capacity is being built and will come onstream in the near future, while significant spare oil and gas transport and processing capacity exists in the North Sea region."

The Shell and BG merger decision, which was announced in April 2015, comes amid plunging global oil prices.

Image: A BG Group office in Houston, Texas.