Australian regulators have voiced concerns about Royal Dutch Shell's takeover of rival BG Group, due to the potential impact on domestic gas supplies.
In a statement today, Rod Sims, chairman of the Australian Competition and Consumer Commission (ACCC), claimed the deal was not in the best interests of Australian consumers, as it might result in a greater proportion of east coast supplies being exported.
If the proposed acquisition resulted in less supply of gas to the domestic market, therefore, this could substantially lessen competition to supply domestic gas users and lead to higher domestic prices and more restrictive contractual terms.
The commission has not completely ruled out the deal, but said it would not make its final decision until 12 November.
Shell owns 50 per cent of Arrow Energy, which could sell its gas into BG's Queensland Curtis liquefied natural gas plant if a deal goes ahead. This gas would then be exported, leaving less available for domestic use.
Shell struck the £45bn deal to takeover BG Group, which will raise its oil and gas revenues by a quarter and boost production by 20 per cent, in April.
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But to go ahead, the huge acquisition must receive approval from competition authorities around the world. The US and Europe have already given it the green light, but Australia and China must also be satisfied for the deal to be finalised.
A spokesman for Shell said the ACC's phase two review would start in eight weeks, and that the acquisition was on track to be completed in early 2016:
The Shell-BG combination is a sign of confidence in the Australian economy and Shell looks forward to investing more in the Queensland resource sector. Shell and BG will continue to work closely with the ACCC to complete the regulatory review.
Shell's share price was knocked slightly by today's news, down 0.45 per cent at £16.64 at pixel time.
BG's share price fared slightly better, fluctuating around yesterday's close value.