The £47billion mega-merger between oil giants Shell and BG Group faces regulatory delay after authorities in Australia deferred a decision to let the deal go ahead.
Shell said it was “working closely” with the Australian competition regulator after the watchdog delayed a critical decision on clearance for the deal, signalling it has reservations about the potential impact on gas supply.
The deferral of the decision until September 17 leaves the clearance from the Australian Competition and Consumer Commission as one of three key approvals still outstanding, alongside China and the UK.
The Australian and Chinese approvals are seen as raising the most vexing competition issues.
The proposed mega-merger, which got the green light from the European Commission on Wednesday, has raised worries among industrial energy users along the east coast of Australia that the availability and choice of gas supplies will be further restricted.
Prices for local consumers are already increasing sharply, partly because so much gas is set to be shipped from Queensland to Asia as LNG.
UK-based BG owns the massive Queensland Curtis LNG project, which started exports early this year, while Shell owns 50% of the Arrow Energy venture, the holder of the largest chunk of known, undeveloped gas reserves on the east coast.
In a letter to interested parties in June, the ACCC focused on the potential impact of the takeover on the wholesale supply of gas in eastern Australia.
It asked how closely Arrow and BG competed with each other and others on gas supply and whether buyers believed a combined Shell-BG would change incentives to supply gas to domestic rather than export customers.
A Shell spokesman said the group was informed late on Wednesday by the delay in the decision from September 3 to September 17.
“The company will continue to work closely with the ACCC to complete the regulatory review and anticipate completion of the transaction to take place in early 2016,” the spokesman said.
The ACCC said the two-week deferral was needed “to allow additional time to consider the proposed acquisition”. It has been scrutinising the deal since June 11.