Shell is in advanced discussions to buy LLOG Exploration offshore in a deal valued at more than $3 billion. This would increase the oil major's portfolio of upstream oil and gas producers by acquiring one of the biggest privately owned oil and natural gas producers in the U.S. Gulf. Sources said that the parties were in advanced talks, and that an agreement was close. One source added that the deal could be signed by the end the year.
Sources?advised that there is no guarantee that a deal would be reached between Shell and Covington, Louisiana based producer and spoke under?conditions of anonymity for private deliberations.
Shell declined to make a comment. LLOG declined to comment on a request for a statement.
LLOG currently produces 30,000 barrels of oil-equivalent per day, but according to Ross Lubetkin CEO of Welligence, the energy consultancy, this number is expected to increase by the end decade. Shell is one of the biggest energy producers in the U.S. Gulf. This region has attracted attention as energy firms have valued its long-term potential. Unnamed sources told the media in October that LLOG is exploring a possible sale.
SHELL'S UPSTREAM PORTFOLIO IS IN FOCUS
According to analysts, Shell could turn to deals in order to expand its upstream business. Wael Sawan, CEO of Shell, said that in a conference call with analysts on the third quarter earnings he was looking forward to attractive M&A deals in 2026. Kim Fustier, an energy analyst at HSBC, wrote in a note published in October following Shell's results that "we believe North American oil or gas assets in deepwater would be a good addition to Shell's Portfolio." LLOG announced the first production from its Salamanca flotating production unit in September, which supports drilling in the Leon Castile fields. Repsol, a partner in the Salamanca Project's development, has a unit that can produce 60,000 barrels per day of oil and 40 million cubic foot of natural gas.
LLOG announced that in July 2024, it had also acquired 41 blocks, or about 236,000 acres of deepwater Gulf land.
According to the company's website, the Who Dat floating production system has been in operation since 2011. The gross production of the Who Dat field is currently 21,000 bpd oil and 51 mcfpd natural gas. Gerald Boelte, the founder of LLOG, died in 2011. His family is still the majority owner. According to its website, LLOG had 125 employees as of October. David French reported from New York, and Stephanie Kelly from London. Anousha Sakoui, Ni Williams and Anousha Saoui edited the article.
(source: Reuters)