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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: BigBull who wrote (67229)	5/27/2000 7:46:00 AM
From: Robert T. Quasius	Respond to of 95453

Shell may be on the prowl for acquisitions, perhaps for Texaco. Saturday May 27, 1:10 am Eastern Time Shell says does not rule out acquisitions KUALA LUMPUR, May 27 (Reuters) - Royal Dutch/Shell (quote from Yahoo! UK & Ireland: SHEL.L) said on Saturday it does not rule out buying other firms in the coming years, amid mounting speculation the oil giant was ready for new takeovers. But chairman Mark Moody-Stuart, in Kuala Lumpur for a conference, shrugged off talk that Shell, the world's second largest energy company, was keen to buy up Britain's BG International (quote from Yahoo! UK & Ireland: BG.L) to boost its gas production business. ``You talk about British Gas and progress, I don't comment on anything like that and its certainly not whatever you call 'a planned acquisition','' Moody-Stuart told a news conference in the capital. ``Prices are extremely high at the moment.'' Shell is widely tipped to be among the forerunners for an acquisition of gas pipelines and production group BG, which announced a demerger of its pipelines unit Transco from international operations in March. Shell shied away from making fresh acquisitions during the height of the merger mania in the global oil industry, opting instead for major internal cost-cutting and divestment measures. Moody-Stuart said Shell may now be ready to embark on the takeover trail. ``I don't exclude in the coming future making selective acquisitions where we need to acquire skills or precision in the market,'' he said, ahead of a regional oil and gas conference in the capital. ``But they will be driven by trying to acquire precisions rather than by simple cost reduction and synergy extraction.'' Moody-Stuart declined to name possible takeover targets. ``I'm afraid you'll have to wait and see,'' he said. Asked if Shell was likely to make an acquisition this year or in 2001, he said: ``It could be anytime.'' Moody Stuart said Shell's move to reduce capacity at its refineries, amid falling margins across the industry due to high crude oil prices, have put its refinery business in a stronger position to compete. ``We've got ongoing work to do but competitively I think we're in good shape,'' he said. Demand for refined products were also improving, he said. ``After a dip, demand is now coming back,'' he said. ``Although there is an overhang in capacity, this will gradually be eroded and that should in due course improve margins.'' Moody-Stuart said he expects OPEC to raise oil output sometime this year in a bid to keep prices within the group's $22-$28 band for the rest of the year. ``At some point during this year production will need to be raised if we were to stay in this band,'' he said. Declines in production costs will eventually drive oil prices to the ``low teens,'' he said. Moody-Stuart said he was confident the new head of its U.S. joint venture with Texaco Inc (NYSE:TX - news), would be able to turn around the struggling alliance. ``We've seen a number of different new appointments made and I'm confident that they will achieve their targets,'' he said, without elaborating. Profits from its joint ventures in the U.S. with Texaco and Saudi Refining Inc have so far been disappointing, falling short of the firm's expectations. Shares of Royal Dutch closed up 0.3 percent at 66.00 euros on Friday while Shell Transport and Trading was down 0.6 percent at 539 pence.