![\"Wael-Sawan-and-Shell\"](\"https:\/\/dailybusinessgroup.co.uk\/wp-content\/uploads\/2022\/09\/Wael-Sawan-and-Shell.png\")
Shell\u2019s decision to buy a Canadian rival is being seen as a broader shift back to fossil fuels amid escalating geopolitical tensions and rising oil prices.<\/p>\n
The \u00a312 billion acquisition of Arc Resources is the British company\u2019s biggest deal for more than a decade and will shore up its oil and gas reserves. <\/p>\n
The cash and shares deal will add 370,000 barrels of oil and gas a day to its output, in addition to expanding its reserves by about two million barrels a day.<\/p>\n
It follows a controversial refocus on oil and gas by BP and a more pragmatic approach to fossil fuels signalled by Canadian prime minister Mark Carney.<\/p>\n
The shift in sentiment comes ahead of a protest at NatWest\u2019s AGM in Edinburgh over the banks\u2019s decision to soften its policies on fossil fuel investments.<\/p>\n
NatWest, parent of Royal Bank of Scotland, disclosed in February that it had loosened some of the restrictions it had imposed on financing of clients\u2019 fossil fuel activities. <\/p>\n
This includes lifting a ban on working with oil and gas majors that do not have climate transition plans aligned with the 2015 Paris agreement to limit global warming.<\/p>\n
The bank said at the time that its changes were a response to the \u201cevolving policy environment\u201d, but investor campaign group Share Action has warned that \u201cthis kind of backtracking has real consequences\u201d.<\/p>\n Investors are being urged to vote against the re-election of the bank\u2019s chairman Rick Haythornthwaite.<\/p>\n Shell has been carrying out a new growth strategy centred on extracting more oil and gas, moving from a focus on green energy and reducing spending on renewables. It hopes the shift will support production targets and drive greater returns for investors.<\/p>\n Chief executive Wael Sawan said the Arc Resources deal \u201ccomplements our existing footprint in Canada and strengthens our resource base for decades to come.\u201d Shell shares slid 1.7% despite a rise in the oil price.<\/p>\n The company has a significant holding in both the Jackdaw gas field and Rosebank oil project in the British North Sea and is in a stand-off with UK Energy Secretary Ed Miliband who has refused to grant drilling licences for the sites.<\/p>\n Danni Hewson, head of financial analysis at broker AJ Bell, said: \u201cLaying out huge sums of cash never goes down well with investors, even if it will help future-proof Shell\u2019s oil and gas output for years to come and further diversifies its interests away from the Middle East.\u00a0<\/p>\n \u201cSo, it\u2019s understandable that Shell\u2019s shares have come under pressure.<\/p>\n \u201cShell buying Arc\u00a0puts to bed any hopes it will also buy BP any time soon. Shell was rumoured to be interested in BP last year, but nothing came of it.\u00a0<\/p>\n \u201cThe current obsession with the price of oil has catapulted these two heavyweights back into the headlines and many investors may be looking at oil stocks as a way of mitigating the potential impact of a global downturn. <\/p>\n \u201cBut the future is much less clear with long-term energy strategy and security creating tension.\u201d<\/p>\n \t <\/div>\n![\"Rick-Haythornthwaite\"](\"https:\/\/dailybusinessgroup.co.uk\/wp-content\/uploads\/2023\/09\/Rick-Haythornthwaite-and-RBS.png\")