September 28, 2015 / 10:04 AM / 3 years ago

BG buys deepwater exploration stakes off Canada

LONDON (Reuters) - BG Group BG.L said on Monday it had acquired stakes in three exploration blocks off the coast of Canada’s Newfoundland months before its planned merger with Royal Dutch Shell (RDSa.L).

The British oil and gas company bought from Spain’s Repsol (REP.MC) the non-operated positions in the Atlantic basin, located around 200 kilometers from St. John’s, Newfoundland, it said.

“This provides the company with access to early stage exploration in a proven prospective basin ahead of the first well being drilled later this year,” it said in a statement.

The value of the deal was not disclosed.

The three blocks are operated by Norwegian energy company Statoil STL.OL.

Shell is on track to complete its proposed $70 billion acquisition of BG group in early 2016, but BG said it was “in line” with its strategic exploration focus to enter new basins.

Oil companies have sharply slashed exploration budgets over the past year in response to the halving of oil prices to below $50 a barrel since June 2014.

Shell said on Monday it is pulling out of exploration in Arctic waters off Alaska for the foreseeable future and could take a hit of up to $4.1 billion after failing to find enough oil.

Reporting by Ron Bousso; Editing by Tom Heneghan

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