Shell Oil will buy for nearly 70 billion dollars,in cash and shares, the British gas producer BG Group, says The Wall Street Journal (WSJ). At the end of the transaction, BG Group’s original shareholders will own approximately 19% of the enlarged group, notes Marketwatch.

A few months ago, a series of analysts, cited bu the journal, emphasized that mergers and acquisitions are a way for companies to successfully pass over this period with low prices for oil. BG Group has decreased by 19% in value of its shares, compared to a year ago, but the moment information about the transaction occurred, they went up  by 35%.

Following the merger between Shell and BG Group, the production will reach an average of 3.7 million barrels per day, with only 300,000 barrels less than the production of ExxonMobil, the most liquid petroleum company on stock exchanges in the world. The deal with BG Group will bring an increase in the Shell Group by 25% of oil and gas proved reserves and production growth will be 20%.

The last purchase of Shell Group took place in 2010 when it bought for $ 4.7 billion the East Resources company, oriented towards unconventional gas resources. The company performed exploration works in the proximity of the gigantic deposit blocks from Penssylvania and Eagle Ford in Texas.

Shell CEO Ben van Beurden says that the oil price has contributed to this decision, but it was not the dominant factor, it only increased the attractiveness of a business; the high representative of Shell said the deal had to happen because the Anglo-Dutch corporation aims for greater involvement in integrated natural gas businesses.

Offshore oil assets from Brazil (Santos Basin) and the portfolio with liquefied natural gas (LNG) from Australia and the resources held in East Africa seem to be the strengths of BG Group. “The portofolio of BG LNG combined with that held by Shell would represent about 16% of global LNG market,” said an analyst from RBC Capital Markets, quoted by Marketwatch.